In the world we live in today, we need some form of risk management to protect us from everyday incidents and occurrences. And the risk management we have and need comes in the form of insurance coverage. There are many different types of insurance available, the most typical probably being automotive insurance. Vehicle insurance, in return for a monthly premium, will pay valid claims arising from an accident or crash. Premium, claim? What do these things mean? I know from first-hand experience that the world of insurance to a newcomer can be like an endless pit: dark and difficult.

Before you can fully grasp automotive insurance, you have to learn to speak insurance. Understanding the terminology of the insurance industry could eventually allow you to choose the policy best suited to your needs. Yes, you can employ a private broker to take care of your insurance business for you, however , you shouldn’t entrust them with every little thing. The best option would be for you to get to know the terminology associated with car insurance so you can be broker-independent and insurance-savvy! This way, you’ll be able to make your own insurance choices and probably be able to save some money too!

The company you decide to take your insurance policy with is called the insurer, and the person the policy belongs to is known as the insured. A policy can be described as the written paperwork or contract of insurance between the insurer and insured. In order to have a policy, you have to pay a monthly premium. A premium is the amount the policy holder must pay per month in order to keep the policy with the insurance company in place. These are just the basic principles of insurance industry terminology and it gets a lot more complicated from hereon.

An insurance broker is someone that acts as an intermediary between a client (you) and the insurance company. They have the ability to offer a person several different specials from different companies; whereas an insurance agent works for one specific insurance provider and may only give you options and deals from that company. When you suffer a great loss that’s covered by your automotive insurance company, like a car crash, you submit a request to your insurance company to pay or reimburse you for any damages or expenses occurred in the accident. This request is seen as an insurance claim.

Collision cover can be described as coverage that will pay for physical damage to your vehicle caused by a collision either with another vehicle or with a building, fence or post. Comprehensive coverage refers to the coverage that will pay for damages to your vehicle caused by something aside from a collision, for example falling items, animals, fires, hale storms, robbery and vandalism. Should you damage another person’s property or vehicle with your own, your liability coverage will take care of the expense of these damages.

There are a lot more terms that you’d need to learn before fully understanding automotive insurance, but this is a start. Other terms, descriptions and explanations can be found on an insurance company’s website or in articles or blog posts on the web. Good luck!

For more information on automotive insurance, go to http://www.youinsure.co.za