If you drive a car, having auto insurance, as it is mandatory by law. But do you really completely understand insurance coverage Here are some must-know car insurance terms to ensure you avail of adequate coverage, and nothing more and nothing less.

Additional Insured
These may include other family members holding a valid license.

At-fault Accident
An accident in which your are at fault, the insurance will pay for damage to other people or property up to the defined limit.

Bodily Injury Liability
This covers third-party treatment costs and liability arising due to death resulting from an at-fault accident. This does not cover your medical expenses.

Collision Coverage
It will pay for damages caused by a crash or a one-vehicle accident, like banging into a tree. It is often needed if you need to avail a car loan.

Comprehensive Coverage
This pays for repairs caused due to animal collision damages and other issues such as theft, fire, and falling objects.

Declarations Page
This page comprises important information, such as the car’s VIN, your address, insured names, included coverage, and liability limits.

Deductible
It is the pre-defined amount that will be deducted from collision and comprehensive claims. The deductible does not apply to liability claims.

Full Coverage Car Insurance
This type of policy covers liability insurance as well as comprehensive and collision coverage.

Gap Coverage
In case of theft or complete damage of your car in an accident, the insurer will pay the difference between the balance loan and salvage amount, where the outstanding loan is higher.

Liability Insurance
This covers any liability arising due to third-party bodily injury or property damage as well as pays legal fees if you are sued.

Limit
This represents the maximum amount paid by the insurer and every cover has a different limit.

Medical Payments Cover (MedPay)
This will pay medical expenses to treat injuries to you or co-passengers up to the policy limit irrespective of who causes the accident.

Personal Injury Protection (PIP)
PIP covers additional costs such as loss of income or physical therapy treatments. Simply put, the costs that are not covered under MedPay.

Premium
This is the amount you pay for availing the car insurance and it is maybe paid monthly, half-yearly, or annually.

SR-22 Form
It is an official document required by certain states proving you have adequate insurance coverage; this document allows you to retain or reinstate driving privileges after repeated or serious offenses.

State-required Minimum : This is the minimum coverage and limit required by the state, which is often low and inadequate to cover liabilities in case of an accident.

Underwriting
This refers to the insurers’ procedure to determine your risk level on the basis of factors like age, driving history, location, and type of vehicle.

Under- or Uninsured Coverage
This coverage pays for repair expenses of your car in case the driver at fault is underinsured or uninsured.

These must-know car insurance terms and provisions included in the policy document will be now easily understood for being able to get a good auto insurance plan.