Reader’s Question:

I’m a resident of New Orleans, Louisiana. I just recently learned how to drive, and now I need help getting auto insurance. Can you give me more information, so I could get the best auto insurance rates?

Dean

New Orleans, LA

Hi there! I can sense your excitement on being a new driver. I remember sweating profusely back then, when I had to maneuver and park in a tight space. One thing’s certain, though: you’ll get better at it as you go along. For starters, never drive without an auto insurance coverage because you will never know what might happen when you’re on the road. To know more fully about how auto insurance works, and to help in getting the best auto insurance rates, you might also want to familiarize yourself with common insurance terms like deductibles, exclusions, costs above policy limits and premium.

When buying auto insurance, you will often hear the word deductibles. It is the amount the policy holder initially pays or shells out following an accident, before his auto insurance company assumes its part of the bargain. It is sometimes referred to as participating fee. This is important if, say, you got hit by another motor vehicle and you need to make insurance claims to have your car fixed. Before you can make the claim, your insurer will require you to pay out the amount you (and the insurer) initially agreed on when you entered into a contract.

Another term you’d certainly come across when getting auto insurance is exclusions. Exclusions are situations that your auto insurance policy coverage automatically leave out, like intentional damages to property and personal injury. These are mainly drawn up to protect auto insurance companies – or any insurance company, for that matter – from fraudulent claims.

You would also encounter a phrase like costs above policy limits, which is really just another name for cap. And of course, we have premium. This is the amount the policy holder regularly pays (monthly or annually) to get insurance coverage.

Tags: auto insurance coverage, auto insurance policy, auto insurance premium, car insurance rate, deductible