Reading your insurance policy doesn’t have to be like taking an advanced course in Egyptian Hieroglyphics. While the language is purposefully precise and definitely created by lawyers, underwriters, actuaries, etc., with a little bit of Insurance Terms 101, you can gain a good understanding of what the document says.

Of course, it is important to have a good grasp of all your coverages, your auto policy is perhaps the one you are most likely to utilize. Here are a few terms you should be familiar with that will help you understand your policy:

Adjuster – A person who investigates and settles insurance claims.

Binder – A temporary insurance contract that provides proof of coverage until you receive a permanent policy.

Collision coverage – Pays for damage to your car without regard to who caused an accident. The company must pay for the repair or up to the actual cash value of your vehicle, minus your deductible.

Comprehensive coverage (physical damage other than collision) – Pays for damage to or loss of your automobile from causes other than accidents. These include hail, vandalism, flood, fire, and theft.

Liability insurance – Pays for injuries to the other party and damages to the other vehicle resulting from an accident you caused. It also pays if the accident was caused by someone covered by your policy, including a driver operating your car with your permission.

Liability limits – The maximum amount your liability policy will pay. Your policy must pay at least $15,000 for each injured person, up to a total of $30,000 per accident, and $5,000 for property damage per accident (unless you have a Low Cost Auto Policy). This basic coverage is called “15/30/5” coverage.

Medical payments and personal injury protection (PIP) – Both pay limited medical and funeral expenses if you, a family member, or a passenger in your car is injured or killed in a motor vehicle accident. PIP also pays lost-income benefits.

Uninsured/underinsured motorist (UM/UIM) coverage – Pays for your injuries and property damage caused by a hit-and-run driver or a motorist without liability insurance. It will also pay when your medical and car repair bills are higher than the other driver´s liability coverage.

Without question, the easiest and most efficient way to understand your coverages is by talking with your insurance professional. They will guide you through what you can count on should you need to file a claim, and what you cannot. Take the time to review all your policies and determine whether or not your current coverage is adequate and whether you may want to increase your protection.