Coverage

These are the benefits and protection provided by the insurance company to a policyholder, from an insurance contract. These benefits may differ from one insurance company to the other, but may have similar underlying principles. A good example of an auto insurance coverage is the collision coverage.

Sometimes, the protection provided by the insurance company may depend on the terms of policy of the insurance company and state law and custom, as well as the regular payment of premiums and deductible by the insured.

Benefits and/or protection may be lost or reduced if the insured is no longer an active policyholder or fail to pay the required deductible on the event of an incurred loss, or if he discontinue with the policy e.g. if he sells the car or vehicle to an individual who may not continue with the policy, leaving him having no car that he makes use of, or under his control.

Conversely, if the car or vehicle is sold to someone who continues with the policy then the insurance coverage may likely continue. But this may fully depend on the insurance company under which the car is insured. If that is the case, collision coverage or the comprehensive coverage of the car may be directed to the new car owner.

Posted in: Glossary of Auto Insurance (C)