Auto Insurance Terms You Need to Know

Whether your vehicle is for your business or your home, your auto insurance policy is sure to be riddled with confusing jargon. That’s why Michigan First Insurance Agency is here to help you understand your insurance policy every step of the way.

Learn the basics of auto insurance with this glossary:
  • At Fault: The party that is found at fault is the one that is legally liable for the damages in an accident.
  • Bodily Injury Liability Coverage: If you are at fault, this helps pay the medical costs, loss of income, and even funeral expenses of other people involved in the accident.
  • Claim: Any request for payment under the terms of the policy.
  • Collision Coverage: This coverage is what pays the damage when the vehicle collides with another car or object.
  • Comprehensive Coverage: If your car is damaged from anything other than a collision, the comprehensive coverage will pay the damage. If your car is stolen, vandalized, or hit with a natural disaster, you’re covered.
  • Deductible: The portion of a claim that you pay out of pocket.
  • Driver Status: People can be added to your policy with one of the following driver status options:
    • Rated – A person that actively drives the vehicles on the policy
    • Excluded – This person is not allowed to drive the vehicles and will not be covered in an accident
    • Listed – A member of your household who doesn’t frequently drive the vehicles on the policy.
  • Premium: The price of the policy that you pay in exchange for coverage.
  • Property Damage Liability: Helps pay the repairs or even replacement of another driver’s car.

If you’re unsure about any terms or what you should be looking for in a policy, ask your insurance agent for help. Looking for a quote on auto or commercial vehicle insurance? Call Michigan First Insurance Agency at 844.788.0818 or learn more online here.

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  1. Braden Bills

    I want to make sure that I get the right insurance. It makes sense that I would want to have one that offers comprehensive coverage! That way I can be covered even if my car is damaged by something that isn’t another car.

    Reply
  2. Tim Yaotome

    I find it awesome when you said that a car owner can get coverage to cover incidents such as when it gets stolen, vandalized, or hit by a natural disaster. Learning about this convinced me to find an auto insurance agency for my son as early as now. That way, I can keep his car in good shape and get back his return on investment from his sports car faster.

    Reply
  3. Tyler Johnson

    That’s interesting that you can add a person as not allowed to drive the vehicle and won’t have any insurance on that car in the case of a crash. That would be good if you can save some money on your insurance and as an incentive for people to not drive your car. I might have to take a look into that.

    Reply
  4. Tim Yaotome

    I find it cool that you made a list of terms that a person should take note of getting bodily injury liability insurance so that they can pay for a person’s medical costs and loss of income while they get involved in a car accident. Aside from these, one should also ask for a local insurance agency to find the right policy to invest in for the car. Doing this will help extend its lifespan in the process.

    Reply