Dothan, Alabama
1455 Westgate Pkwy
Dothan, AL 36303
(334) 712-0777

7 Insurance Terms Every Policyholder Should Know September 5, 2017

Dothan, Houston
7 Insurance Terms Every Policyholder Should Know, Dothan, Alabama

Whether you’re new to insurance or have extensive coverage, you will understand your policies better if you know the correct terminology. This vocabulary is of particular importance if you must file a claim to pay for car damage or injuries suffered in a crash. Aaron Insurance Agency in Dothan, AL, is committed to providing customers with comprehensive and affordable policies and says an informed client is the best prepared. They explain a few of their industry’s key terms to boost your awareness.

7 Essential Insurance Terms Defined


A claim is a formal request made by a policyholder to their insurance provider seeking payment for a repair or treatment. The request often can be submitted through the carrier’s website.

Bodily Injury Liability

This plan provides coverage if the policyholder is at fault for an accident that led to another person’s physical injuries. It can include lost wages, medical expenses, and legal costs.

Collision Insurance

This insurance plan pays to repair or replace a person’s car when it’s damaged in a crash with another vehicle or by making contact with an object like a building or tree.

Comprehensive Insurance

Insurance Dothan ALA comprehensive plan reimburses the policyholder for a variety of damage not due to an accident with another vehicle. It includes incidents like theft of items from a car and harm from vandalism, fire, and weather conditions.


A premium is a monthly or annual payment a policyholder makes to their insurance provider to continue coverage. Some carriers offer discounts to people who pay the annual cost in full instead of making installment payments.


The deductible is the dollar amount a policyholder pays for damage after an accident before their provider covers the rest of the expense. The amount varies depending on your plan, but a lower monthly premium typically means you will have a higher deductible.

Effective Date

This is the date an insurance policy goes into effect. Most plans are annual and typically have a renewal date for policyholders who want to maintain their coverage.

Knowing common terms used in the insurance industry will help new and existing policyholders make informed decisions. An experienced insurance agent also will help you select plans to accommodate your budget and needs. If you’re in the market for auto insurance in Dothan, AL, call Aaron Insurance Agency at (334) 712-0777. In addition to a free, no-obligation insurance quote, you’ll receive a personalized review of your existing policies. Visit their website for details about their plans and check their Facebook page for more tips from their team.

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