Insurance Toolkit

A premium is what you pay regularly (usually monthly) to keep a policy in force. Carriers pool everyone’s premiums to pay claims, run the company, and earn a margin. If they expect you to generate bigger or more frequent claims—based on vehicle, territory, age, record, coverage limits, deductibles, and credit where allowed—they charge more.

Liability coverage pays others when you’re at fault: their medical bills (bodily injury) and their car or fence (property damage). Collision pays for repairs to your car after a crash regardless of fault (minus deductible). Comprehensive covers theft, hail, animal strikes, glass, etc. You can owe thousands out of pocket if you skip physical damage coverage on a car you still owe money on.

You’ll see limits like 100/300. The first is the most the insurer pays for any one injured person; the second is the most for everyone hurt in the crash, combined. If a hospital bill exceeds your per-person cap, you can be personally responsible for the rest. Higher limits cost more premium but buy more protection against lawsuits and giant bills.

One number: the maximum the carrier pays to fix or replace other people’s property in a crash you cause. A single luxury SUV or structural damage can blow past low limits fast—meaning you’d pay the difference.

A deductible is your share of a covered claim. If you pick a $1,000 collision deductible, you pay the first $1,000 of repair cost; insurance pays the rest (up to actual cash value). Higher deductible → lower premium, but you need cash ready if you crash.

Works like collision but for non-collision events: theft, fire, flood, vandalism, deer. Same tradeoff: higher deductible, lower premium, more out of pocket per incident.

Pays you and your passengers when the at-fault driver has no insurance or tiny limits. Many students skip UM to save money—then get hit by someone with state-minimum coverage and learn why UM exists.