Car Insurance Policy Terms to Know

For your reference, below are definitions to some Auto Insurance Policy terms you may encounter through the insurance process:

Automobile Liability

Coverage if the insured is legally liable for bodily injury or property damage caused by an automobile.

Collision

The portion on an auto policy that covers damage to an insured vehicle from the perils of collision.

Comprehensive

The portion of an auto policy that covers damages caused by perils other than collision.

EFT

Electronic Funds Transfer is a convenient way to pay your insurance premiums through electronic withdrawals from your bank account, whether you pay in full or on a payment plan. This saves you money by eliminating or reducing service fees.

Lease/Loan Gap Coverage

Coverage protecting you from out-of-pocket expenses incurred after a loss when there is a “gap” in the actual cash value of your vehicle and the amount remaining (or owed) on your lease or loan.

Medical payments

Coverage in an auto insurance policy that pays for medical expenses resulting from an accident, regardless of fault, for you and others riding in your car. It also pays for injuries you or your family members suffer while riding in someone else’s car or while walking.

Uninsured/Underinsured Motorists

Coverage portion of an auto policy that protects the insured from claims/losses that are caused by others, including the uninsured, underinsured or victims of unidentified violators (such as a hit and run).

Uninsured Motorists Property Damage (UMPD)

This is an endorsement option often purchased for vehicles with only liability coverage. If your car suffers damages from being hit by an uninsured motorist, you will be paid up to the amount purchased by you, as shown on your policy, to cover physical damage caused to your vehicle (e.g. $7,500). In most cases, you must also carry uninsured motorist bodily injury.