The typical insurance policy will use terms of language that are not used in regular situations. These terms may actually be unique to the auto insurance industry and used exclusively. If you want to be in a knowlegable position where it comes to your insurance coverage, you should have, at least, some grasp of the auto insurance lingo you might encounter.

Understanding the purposes of auto insurance provide a good starting point for a discussion of policy terminology. To begin with, if you lack insurance coverage, you do not have the kind of protection you will need if there is an auto accident. Without insurance protection, you can be held legally libel and subject to lawsuits. If sued, you may have to pay for any damages sustained in the accident if it was your fault. On the other hand, if the accident isnt your fault, you may still have to pay for your medical bills, those of your passengers, as well as repairs or replacement of your automobile. These consequences underscore the need for auto insurance coverage. They may also explain why auto insurance is mandatory in most states.

You should now understand that there are five essential terms that will be important to know when you are discussing car insurance or looking at your policy. These terms include liability coverage, medical coverage, physical damage coverage, emergency assistance coverage, and unattached equipment coverage.

Of course, for many of you, the first three terms are familiar. They are are used more commonplace when talking about auto insurance in general. The latter two are less familiar. The first three, liability, physical damage, and medical coverage are used the most frequently in introductory conversations or general dialogues about car insurance. The other coverage types, emergency assistance and unattached equipment, are not featured in the average discussion about auto insurance policies. As a result, they are not readily understood by most policyholders. These last two types of coverage are also downplayed because they are not deemed essential components of a comprehensive insurance policy. Yet, they may be valuable additions nonetheless.

Perhaps the most common term that you will see and hear is liability coverage. Essentially, this is the part of an insurance policy that covers damages caused by you during an accident. If you have liability coverage, it is very important to have adequate coverage to handle the damage. If you fail to keep enough coverage, you might be required to pay expenses out of your own pocket to the victim in the accient. Physical damage coverage is pretty straightforward; it is used to pay for repairs or replacement of your vehicle. Medical coverage is used to pay for medical expenses for both you, the driver, and any passengers may have after an accident.

The last of these terms to be discussed are slightly different in focus. For example, emergency assistance coverage is meant to add some extra security by offering roadside assistance benefits. If it is added to your insurance policy you will get access tow services that will keep you from being stranded along the side of the road. The other, unattached equipment coverage, provides you with coverage that equipment that may not be permanent attachments for your automobile. Expensive attachments such as satellite radio or special lighting need some sort of coverage in case they are damaged.

If you are familiar with these terms, you can eliminate the confusion and approach auto insurance with more confidence. Also, if you know how it works, you know if what you have is adequate enough for your particular needs.