The Ultimate Car Insurance Jargon Buster

When you are looking for your car insurance, you will see that it has full of complicated terms and language. To help you cut through the jargon, here we will explain all the major points which you should know while taking car insurance.

Today, protecting your car does not only mean being cautious while you are behind the wheel, some events do not depend on you such as natural disasters or accidents. Protecting yourself with insurance is optimal, as long as you know the terms related to it. If you are looking to insure yourself or if you are already protected by this type of insurance, know its elements, to eliminate the gap between what you hire and what you expect to receive.

General Conditions

Clauses that regulate the insurance and include the risks covered (coverage), cases not covered (exclusions), as well as the rights and obligations of the insured and insurance institution. It is usually the little book they give you along with the cover of the policy.

Some cases not covered (exclusions) are:

  • Partial theft of part or things you leave in the car such as bags, backpacks, boxes, etc.
  • If the driver does not have a license or permission to drive or if he drives drunk or under the influence of drugs.
  • The delivery of the car for purchase or sale transactions.


A document that allows modifications, additions, or clarifications to the policy and generally has an additional cost to the premium. For example, if you are looking to protect the sound equipment of your car, you can request the addition of those protected using an endorsement.

After hiring:

Having insurance allows you to protect your vehicle from an unfavorable situation, while it is covered. In case of theft or total loss, the car insurance company will compensate you by paying the car at commercial value, including its depreciation according to the books managed by the institution, unless you make the contract under other conditions.

What are the most common coverages to protect a car?

  • Material damage: Covers the cost of losses caused by an accident such as shocks, falling trees, overturns, among others.
  • Total theft: If your car is stolen, it will provide you with the corresponding amount.
  • Civil Liability: Protects from material damage, bodily injury, or death that you could cause to third parties.
  • Medical expenses: It covers the payment of medical assistance for bodily injuries of the insured and/or the other occupants of the vehicle due to traffic accidents.

About insured amount:

The insured amount is the maximum amount that they will pay you in case of theft or total loss of the car. To determine it, it is considered:

  • Invoice value: Corresponds to the value of the sale to the public and indicated in the invoice issued by the automotive distributor.
  • Commercial value: It is the highest value for the type and model of the vehicle established in the books at the date of the incident
  • Agreed value: It is the value assigned to the vehicle based on an appraisal made by a specialized agency, institution authorized for this purpose, or qualified expert
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