Knowing car insurance terms can save you money

ATLANTA - Car insurance is something most of us have, but we tend to skim over the details of our policies. 

Vehicle insurance can cover a lot, or a little. It depends on what you have. And knowing all the terms can actually help save you money. So let's go over a few.

Liability Coverage

The kind of coverage you want on your vehicle depends on your budget, the car or truck's age, the vehicle pay-off amount. It's not one size fits all. In Georgia, it is required by law to have liability insurance that meets certain criteria. Liability coverage means it pays others if they are injured or their vehicle is damaged, and you're ruled at-fault. This is the law. 
It's the cheapest coverage. This level of insurance is not going to cover any damage to your car from collision or an accident from outside factors like hail, or a falling tree. 
But, if you have an old car that's no longer worth much, this is likely the way to go.

Comprehensive and Collision

If your vehicle is new, or you still owe a lot on it, you will want one of two types of physical damage insurance; these are comprehensive and collision. They are not required by law in Georgia, but if you finance or lease it might be required. 

• Comprehensive: It covers theft, vandalism, and fire-related losses. 
• Collision: This covers losses associated with damage from collisions.

Accident Forgiveness 

This is extra coverage with your policy. If you have a car accident, this assures your insurance won't go up. Two things of note: This covers your first at-fault accident. If you are constantly getting into fender benders, this is not going to help you. But, you may simply qualify for it if you have five, accident-free years. It's worth looking into. 

Actual Cash Value and Gap Insurance

Actual Cash Value means the amount it will cost to replace that vehicle if it's been in an accident, minus the vehicle's depreciation. Remember, your vehicle is worth less the second it rolls off that lot. So you might want gap insurance here. This covers that difference between what you owe and what the vehicle is worth. This is something you might be interested in if you have a brand-new car. 

Deductible

This is probably the most familiar term. This is what you pay out of pocket before your insurance kicks in. The higher the deductible, the less that comes out of your pocket each month.

It's not unusual to forget what you're paying for, so go to your policy's declarations page where you will find a full summary.