Car Insurance Terms Explained

Filing an insurance claim after a car accident can be an intimidating process. Whether you’ve done it before or it’s your first time, you may encounter terms and phrases that confuse you. Insurance claims representatives aren’t worried about protecting your best interests, but rather the company’s. They might not be much help when you need guidance for what’s best for you. Here are car insurance terms explained, so you can enter into your next claim informed and confident.

Adjuster

After a car accident, an insurance claims “adjuster” may contact you from the other driver’s insurance company. The adjuster may work for the insurer or be someone the insurer hired from a third party. This is the person who will investigate and settle your claim.

Bodily Injury Liability

With bodily injury liability insurance, your policy contains coverage for others’ bodily injuries after an accident that you cause. This type of insurance will not cover your own bodily injuries, but those of an innocent third party. Texas has a current minimum of $30,000 in bodily injury liability for each injured person, up to a total of $60,000 per accident.

Collision Coverage

Collision coverage will compensate for damage to your vehicle, regardless of who was at fault for the crash. Your company will pay to make repairs or to replace your vehicle after you pay a deductible. Your deductible is the amount you must pay in a loss before the company will cover the rest of the damages.

Comprehensive Coverage

If your insurance policy contains comprehensive coverage, it means your policy will pay for damages to your automobile from car accidents, but also from other causes. This may include fallen trees, vandals, floods, and fires. This type of coverage is not always all-encompassing. It may not pay for damages to other vehicles or properties, or personal injuries.

Medical Payments Coverage

This type of insurance will cover medical bills for you, your family members, passengers in your car during the accident, and other injured parties regardless of who caused the accident. It will also pay for funeral and burial costs.

Personal Injury Protection (PIP)

Personal injury protection (PIP) insurance is the type that will cover your personal bodily harms in a collision. PIP may also cover losses such as 80% of lost wages, funeral expenses, and the cost of a caregiver for injured parties.

Property Damage Liability

Property damage liability coverage will pay for damage to another person’s vehicle if you caused the accident. It will pay to repair damage or replace the actual cash value of the vehicle. Texas’ minimum for property damage insurance is $25,000 per accident.

Settlement

A car insurance claims adjuster may offer you a settlement, or try to get you to settle if the other party caused your crash. A settlement is an official legal agreement to resolve your claim. In a car insurance settlement, the company will offer you an amount of money it deems adequate to cover your losses. You can decide to accept the offer, deny it, or enter into settlement negotiations. An attorney can help you with these processes.

Uninsured/Underinsured Motorist (UM/UIM)

This is additional insurance you can purchase to cover your bodily injuries and/or property damage in the event that the at-fault party does not carry insurance, does not have enough to cover your damages, or you were the victim of a hit-and-run.

For more information about car insurance terms or your specific claim, contact a Houston car accident lawyer.