Insurance is a vital part of our lives as drivers–not to mention a requirement in 48 out of 50 states (Virginia and New Hampshire are the holdouts, for those curious.)

Because Texas is one of the states that require auto insurance, the urgency to fulfill the requirement is high! That being said, navigating the world of auto insurance can be confusing. Read on for some terms you should know.

Premium

A premium is a word to describe how much you’ll be paying to be covered by your insurance. A premium can be a one-time payment, a monthly, or even a yearly payment, depending on the insurer.

Deductible / Excess

This means the primary amount you will pay before the insurance pays the rest. For example, if your insurance claims to have a $500 deductible, you will have to pay $500 before the insurance takes care of any outstanding payment.

Be sure to examine the terms of your deductible, as to see the limits, type, and how much it will be.

Coinsurance

This is the set percentage of every claim you pay after the deductible has been applied. If you have used up your full deductible, you will then be asked to pay a certain percentage of every claim until your contract renews.

Conditions Precedent to Liability

This refers to everything you’re supposed to do prior to making a claim through your insurance. Be sure to completely analyze this part of your insurance as to not miss out on important steps you should take before filing a claim.

Underwriting

This term is used by insurance companies to evaluate how risky you are based on different factors like location, age, accident history, credit, etc. This is then used to calculate your rates.

Payne Auto Group

Payne Auto Group want you to stay safe out on the road no matter where you are! That is why Payne Auto Group offers Payne Insurance! Get your FREE quote today!