The world of car and collision insurance can be confusing for the uninitiated. There are many terms and acronyms whose meaning is not immediately obvious, but it’s important too understand them to get a clear picture of the coverage your policy provides.
Below you will find some essential terms to understand all the nuances of collision insurance.
Adjuster
This is an employee of your insurance company whose job is to review claims made by policyholders. They recommend the amount to pay based on the conditions on the vehicle and the coverage provided by each specific policy.
Aftermarket Parts
This are replacement parts that were not made by the Original Equipment Manufacturer (OEM) of your car. Keep in mind that only original parts are backed by the vehicle manufacturer’s guarantee; aftermarket parts may not offer performance equivalent to original parts. Aftermarket parts are also referred to as A/M, Automotive Replacement Parts, Quality Replacement Parts (QRP), Competitive parts (CP) or Like Kind and Quality (LKQ).
Agreed Value
Unlike most vehicles, collectible or antique cars don’t depreciate over time. In fact, the opposite is true: they tend to become more valuable. In this case you and your insurance company decide to use an agreed-upon value instead of Actual Cash Value (see above) in the event of a total loss.
Bodily Injury Liability
If you cause an accident, this type of coverage helps pay for the medical expenses of the other person, according to the limits of your policy. Additionally, you may also get help paying for your legal fees.
Business/Commercial Use
This means that you use your car exclusively for work purposes such as delivery and sales. Commuting to and from work does not fall qualify as business use.
Collision Insurance
This optional coverage helps to replace or repair your car in case of a collision with another vehicle or object such as a tree or a fence. Note that collision insurance doesn’t cover damage to your vehicle not related to driving or damage to another person’s vehicle.
Deductible
This is the amount of money you pay upfront should you suffer a covered incident. Once you have paid your deductible, the insurance company pays the rest, up to the limits stipulated in your policy. As a general rule, choosing a higher deductible when you purchase insurance translates into lower premiums. However, it’s important to make sure that you choose a deductible you know you would be able to pay.
Salvage Parts
These are parts salvaged from other vehicles. Salvage parts usually include large body assembles such as complete front ends.Your insurance company may use different terms to refer to these parts, including “Salvage”, “Used”, “Recycled” and “L.K.Q” (Like Kind and Quality).
At Delgado’s Insurance we have made it our mission to help you find Insurance Policies customized to fit your individual coverage needs.
We have locations in Riverside, California, and Bloomington, California. Contact us today by telephone (951-361-0084, 909-421-9003), email or through our social media accounts to get a free quote and learn more about our Life Insurance options. Our agents will be more than happy to assist you so you can find the coverage that makes the most sense to you.
