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Important Car Insurance Terms You Should Know About

There are a number of car insurance terms and lingo used that you will have to decipher and understand well. Sadly if you do not understand many of these terms, it will be impossible for you to understand the terms and conditions of your car insurance.

For example bodily injury liability is what covers the medical expenses for injuries the holder of the car insurance may cause to somebody else. Actual cash value refers to the cost to replace property when the amount it has depreciated since the purchase has been deducted. When folks talk about the benefit, in insurance terms it means the amount an insurance company will pay to you or your beneficiary when you file a claim.

There is a term that confuses many when it is used in insurance and this is "endorsement". Endorsements are the changes to the original insurance contract made. Such as a different deductible or adding a car or driver to the package.

Extraordinary Medical coverage is sometimes included in personal injury protection and this is the coverage that protects the insurer if they suffer accident-related injuries. To go a little further in the same direction, income loss coverage is also a part of personal injury protection sometimes and this takes care of you if you are unable to work due to accident-related injuries.

You will notice that the word indemnity is used a lot in car insurance policies and you may have always wondered what it means. Indemnity refers to a predetermined sum paid for a loss covered by insurance.

Personal injury protection (PIP) is the component in car insurance that covers the treatment of injuries to the driver and passengers of the policyholder's car. Major PIP coverage can include both medical payments and lost wages of those injured in an accident.

Property damage liability as the name suggests pays for the damage that the holder of the car insurance policy causes to someone else's property.

Understanding these terms will go a long way in helping you to fully understand all the small print in a car insurance policy.

Read more on potential car insurance trouble .

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