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Chris O'Shea
Aug. 6, 2021
2 min read

Auto insurance terms you should know


When it comes to buying car insurance, a little extra knowledge goes a long way. Auto insurance policies can be jam-packed with odd terms and legal details that make them difficult to understand. Here are some car insurance terms you should know in order to get the best possible policy.

  • Collision coverage. This covers damage to your vehicle no matter who is at fault. The newer your car, the more likely you might want this type of coverage. As CNet notes, collision coverage is also usually required if you’re financing your car.

  • Comprehensive coverage. This covers damage to your car not caused by an accident. This also covers you should your car get stolen.

  • Deductible. The higher your deductible, the lower your monthly payments. However, a high deductible means you’ll pay more out of pocket for repairs should you get into an accident.

  • Liability insurance. This insurance is required by law in almost every state. It covers damage or injuries to the other person should you be at fault during an accident. There are two types of liability insurance: Bodily injury and property damage. The former covers a person’s medical expenses and the latter covers damage to their vehicle. Liability insurance is typically listed as two numbers — like $25,000/$50,000. The first number is the limit of pay per person, the second is the limit of pay per accident.

  • Full coverage. Don’t let this name fool you — it just means the policy has more than just liability coverage.

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    Chris O'Shea

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