Auto Insurance Terms

There may be many questions about insurance terminology, particularly if this is the first time that you are purchasing auto insurance for your vehicle. The answer is yes; proof of automobile insurance is required in all 50 states; however each state has its own statutes regarding the requirements on minimum coverage required for liability insurance, as well as the requirements of insurance coverage on rental cars.

Many consumers believe that auto coverage is provided ONLY to cover the driver of the car, but that is not true, insurance protects property, other motorists, pedestrians, etc in case you damage property during an accident or hit a pedestrian, the other party can file a claim against your insurance company and receive compensation for damages.

Penalties for uninsured motorists varies from state to state, often times a fine, suspension or revocation of driver’s license privileges, but depending on the situation jail time could also be ordered for those driving without liability insurance.

There are two types of automobile coverage; one is Third Party insurance which covers theft and vandalism of your vehicle.  Comprehensive coverage is the most common type of coverage because it covers damages to your car (and other motorist’s vehicles) in case of an accident.  An insurance company has coverage limits that is set up ahead of time and written into the policy.

Premiums are the payments paid either annually, bi-annually, or otherwise agreed upon time span.  The premiums cover any damages or repairs your vehicle may need as a result of an accident (up to the coverage limits of course).  Premiums also entitle you to have coverage for any property that was damaged as a direct result of your car being involved in an accident.

Premium rates vary quite a bit from one insurance company to another so it is advised to shop around to try and get the best rate, then when you are ready to purchase a vehicle, be sure to stop in at St. Louis Auto Stop used car sales in Hazelwood.