Auto Insurance Terms

My wife and I have separate auto insurance policies from two different companies. We finally had some time to consolidate and hoped to take advantage of some group discounts. I went through a few companies and learned some basic terms needed to shop for auto insurance.

Bodily Injury Liability (BI)

Your coverage begins here and is normally given with two amounts. When I leased my car, I was required to get the maximum coverage of $100,000/$300,000. Here is another reason to buy, but I digress. In the event of an accident, your insurance company will pay up to $100,000 per person and up to $300,000 per accident.

Property Damage Liability (PD)

In the event of an accident, your insurance company will pay up to this amount to cover any property damaged in the accident. This could be the other person’s car and any objects in the area that was impacted.

Uninsured & Underinsured Motorist

This is the same as the first item and would kick in if you get into an accident with someone who is uninsured or underinsured. With the economy the way it is, more people are neglecting auto insurance.


There are two types of deductibles you need to be aware of. Comprehensive (COMP) covers your car against damage and theft. Collision (COLL) is self-explanatory comes into play if your car hits something. The deductible that you choose is your out of pocket expense if you wish to file a claim. The amount ranges from $100 to $1000.


Finally, you need to decide if you want your insurance to cover towing, a rental car, and emergency services. Like everything above, if you want it, you pay for it through a higher premium.

Final Thoughts

I had a list of items you need to know before you shop around. But my fellow blogger Crystal from Budgeting In The Fun Stuff laid it out so nicely, why re-invent the wheel? Check out her post, Comparing Auto Insurance Rates. Tune in next time when I shop around, consolidate, make a switch, and save some money. Auto insurance isn’t the most fun topic around, but the following video takes a hilarious look at it and asks some insightful questions.

Stay Inspired!

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12 Responses

  1. Great post on saving money on insurance. You can usually get great discounts by keeping all your coverages at one place.

  2. The video was hilarious!!!! I was laughing the entire time. Too, too funny. I do have to say that insurance is the one time that it’s okay to be a woman…unless you have a tenant with a 100 pound pitbull in which case you can’t home home insurance unless you neglect to tell the insurance company about the dog…or so I’ve heard.

  3. Moneycone says:

    Excellent coverage of insurance terms Buck! Additional tip: When renting, your credit card covers some of the above but not all. You should add only coverage that is not covered by your credit card.

  4. krantcents says:

    Nearly 10 years ago, I had an accident with an uninsured motorist. I recommend $100K for uninsured motorist coverage. It is inexpensive and definitely worthwhile.

  5. Buck, that video is hilarious, great find! I’d run it on my site too, but I don’t want to be a copy-cat. And it’s true…..people with big feet are…..better drivers!

  6. Nana Snode says:

    Hi there! I know this is kinda off topic nevertheless I’d figured I’d ask. Would you be interested in exchanging links or maybe guest authoring a blog post or vice-versa? My blog addresses a lot of the same subjects as yours and I feel we could greatly benefit from each other. If you might be interested feel free to send me an e-mail. I look forward to hearing from you! Fantastic blog by the way! <

  1. June 14, 2011

    […] Auto Insurance Terms […]

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