There’s a lot of things out in life that can be very confusing at first.  From buying a house, to signing up for an insurance policy.  What the heck does all of this jargon mean?  I wanted to put it in simple terms, so that you know exactly what each term means, and hopefully you will feel like a pro, when you purchase your insurance policy.

You will see the following on your quotes…

• Liability: This is required by most states out there.  If you’re are found to be at fault during the accident, this will cover for any bodily injury, as well as property damage you cause to anyone’s property.  This would also include potential lawsuits as well.  You’ll want to make sure you know what your coverage limits are, because you don’t want to be too cheap.
• Collision: The auto industry generally refers to this one as Collision / Comprehensive.  Collision is when the driver is, or even isn’t at fault.  It will pay for any damage done to the vehicle.  You will most likely set  a deductible, and the deductible will be what you pay out of pocket.  For example, if you have a $1,000 deductible,  and the damages were $2,000, you would only have to pay $1,000.
• Comprehensive: This is on the other side of the collision.  This will cover things such as theft, vandalism, arson, or something such as hitting a deer.  To make it easier, just picture something that you really can’t control, such as someone hitting you in the parking lot.
• Uninsured / Underinsured: This will pay for you if you were hit by a hit, and run driver, or someone that may not carry car insurance.  As for the underinsured, this will pay the other motorist what their liability doesn’t cover.
• Medical: This will cover anything that’s related to Medical.
• Personal Injury: Covers things that are outside of the hospital such as lost wages at work, funeral costs, and more.  It’s only required in a handful of states at the moment.

You will find more terms here and there on your policy, but the main majority are listed above.  If you ever get confused, ask your agent, and he/she should be more than happy to help you with your policy.  You also don’t want to be too cheap with some policies, as you will find that if you do get in accident, it can cost you a lot more money than expected.