Car insurance can help you avoid paying for the damages out of your pocket if you’re involved in an accident. But unfortunately, most people don’t know what all of the terms on their car insurance policy mean. This can lead to chaos when it comes to filing a claim. Here, we will explain some of the most misunderstood terms in car insurance policies.

Deductibles
This is the amount you are responsible for paying if you’re involved in an accident. The higher your deductible amount, the lower your premiums will be. However, this also means that you will be responsible for a larger portion of the repair costs if you are involved in an accident. Therefore, you need to choose a deductible that you can afford to pay.

Personal Injury Protection
Personal Injury Protection (PIP) is a type of coverage that helps to pay for lost wages and medical expenses if you’re injured in a car accident, regardless of who is at fault. However, it’s important to note that PIP coverage limits the amount it will pay. As a result, it’s essential to consider your needs and buy a policy that will provide adequate coverage.

Property Damage Liability Insurance
Another misunderstood term in car insurance is “property damage liability.” This coverage pays for repairs if you damage someone else’s property, like car, with your own vehicle. However, property damage liability does not cover repairs to your own vehicle. To be fully protected, you must buy additional coverage, such as comprehensive or collision insurance.

The SR-22
An SR-22 is a certificate that proves you have the state minimum amount of liability coverage. If you are instructed to have an SR-22, it means you have been involved in an accident or have multiple traffic violations. In most cases, you need to maintain an SR-22 for three years.

Understanding these terms in your policy can help you make informed decisions about your coverage and protect you from unexpected events on the road.