Auto insurance basics include such topics as deductibles, premiums, liability and coverage terms. These are the main three components of any insurance policy. All three can be very confusing since insurance companies choose to use wording that is barely English in most cases. More times than not, the wording is in place to protect the insurance company from any possible litigation or liability in case of accident or fraud. Teams of lawyers draft these policies to make sure that the insurance company comes out ahead in any circumstance that may arise. Clauses and addendums abound through an insurance policy as they seek to maneuver all blame away from themselves.
In terms of deductibles, you need to be sure that you know how much yours is before signing anything. A low rate on insurance can mean that you have a very high deductible that must be paid before the insurance company will pick up any cost. This seeks to lighten the bank account of many premium payers as they stroll through life none the wiser. Then an accident occurs and they realize that they owe several thousand dollars before the insurance company will lift a finger. There is nothing that can be done at this point as the policy stipulations have the premium payer locked in with their signature on the dotted line.
Liability speaks directly to what the insurance company will cover and how much of it will be covered. There are several wording variations that the insurance company will use in this particular section. What it boils down to is this. The insurance company can be held liable only for the very specific occurrences listed in the policy and anything else is strictly up to the policyholder.
As for premiums, they are the life blood of the insurance company. No matter if you use the service offered in your policy or not, you will still be paying the premiums. This can go on for years and this is the exact reason why insurance companies offer breaks to those who do not have any accidents. Because if they never use the policy then the insurance company doesn't have to pay. So we are paying the insurance companies for a whole lot of nothing if we never use their service. This is not meant to tell you to go get into an accident or anything like that, but just a simple reminder of what it is like when you have insurance. At least you know that you are covered. Including your auto insurance basics.