A Brief Glossary of Auto Insurance Terminology

Auto insurance continues to be one of the most significant outgoings in the majority of American households yet most motorists still fail to understand many of the important aspects that affect their annual coverage. This brief glossary serves to highlight some of the more commonly found items that can be seen in online auto insurance quotes.

Accident Forgiveness

There are very things that can send your auto insurance rates into orbit as much as being involved in an accident. However, accident forgiveness will actually protect a good driving history because it allows the policyholder to be involved in one at-fault incident without having to suffer any financial penalty.

Deductible Rewards

Although motorists in the UK are annually rewarded with a no-claims bonus if they manage to maintain a year of accident-free driving, US motorists have never enjoyed the same privilege. However, deductible rewards are a relatively recent concept which can see reductions applied to auto insurance premiums if an American policyholder can maintain a year of problem-free road use.

Safe Driver Bonus

Instead of rewarding good drivers with cheap auto insurance quotes, many carriers now offer a safe driver bonus to policyholders who maintain a full year of accident-free motoring and this is paid in the form of an annual check. The amount payable is usually equal to an applied discount on a policy.

New Car Replacement

The resale price on many new vehicles can often be quite low because of the current economic climate and other factors such as depreciation. If a vehicle is declared a total loss after an accident, an auto insurance policy may not cover enough value in it for the driver to afford a similar model afterwards. New car replacement is a coverage addition that offers a viable alternative to the perils of a low market value.

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