What you see is what you get is a general principle applied to all official estimated prices of a job or service. But, what happens when what you see doesn’t make any sense? Besides being expensive, car insurance policies usually issue quotes that are simply difficult to read.
Unless, of course, you’re fluid in car coverage.
To help you understand all the tiny details and fine print on your auto insurance quote, we’ve compiled a list of terms frequently used by carriers in Michigan and beyond. Take notes, as knowing how to read these price estimates can save you some serious money down the road.
ACV & RCV
Actual cash value (ACV) is equal to the current market value of your car. If your car gets totaled in an accident, your Michigan auto insurance carrier will compensate you with an ACV. RCV, on the other hand, or replacement cost value will reimburse you for the entire cost of your car when bought new.
At Fault & No-Fault
If you are responsible for causing an accident, an at-fault policy will cover for medical bills and property damages of other people who were hurt, while a no-fault car coverage means that both you and the damaged party will have to pay out of your own pockets, no matter what party was responsible for it.
In the event of an incident, a car policyholder files a claim to an auto insurance company, therefore claiming their coverage money. A carrier dispatches a claims adjuster to investigate the policyholder’s claim and finally covers all expenses related to damages that qualify under that policy.
Deductible, Limit & Premium
The amount of money you’re required to pay before your insurance takes over is called deductible. The limit is the maximum amount your carrier is willing to pay after you’ve reached your deductible, while premium is the amount of money you pay every month or year to the carrier for the insurance.
No matter the type of auto coverage you eventually choose – liability, collision, comprehensive, full, GAP, personal injury protection, or uninsured motorist – these terms will still show up on your quote.
Knowing what they actually mean can help you determine your car insurance rate, which will, in turn, save you from getting overcharged. Also, pay attention to a series of three numbers on top of the policy declarations page, as they summarize, quite vaguely, the total dollar amounts of your coverage.
For simplified quotes and expert customer service, contact your partner in auto insurance in Michigan, Melton McFadden.