Auto Insurance
Chances are you're spending hundreds, maybe thousands of dollars on auto insurance every year. When you stop to consider what a sizable part of your budget is spent on auto insurance, it makes sense to spend some time learning the basics. While not a detailed explanation of your auto insurance coverages, this guide is designed to help you make informed coverage decisions. Please check your policy for details of the coverage you have.
What if, while driving your car, you caused an accident which resulted in extensive property damage and serious injuries to yourself and others: do you know for certain that your auto insurance coverage would pay for most medical expenses, repair bills, lawsuits and court costs? Having the right coverage and limits can eliminate or substantially reduce the risk of losing your life savings.
In the final analysis, you owe it to yourself and your loved ones to know enough about auto insurance to select the best company and coverage for you.
What if, while driving your car, you caused an accident which resulted in extensive property damage and serious injuries to yourself and others: do you know for certain that your auto insurance coverage would pay for most medical expenses, repair bills, lawsuits and court costs? Having the right coverage and limits can eliminate or substantially reduce the risk of losing your life savings.
In the final analysis, you owe it to yourself and your loved ones to know enough about auto insurance to select the best company and coverage for you.
Liability Coverage
Liability coverage are among the most important in relation to your financial security.
In the face of ever increasing medical costs, the possibility of a multiple car accident, or damage to expensive property, the minimum coverage limits required by law may not be enough. Choosing low liability limits could be an unwise way to save on insurance.
In the face of ever increasing medical costs, the possibility of a multiple car accident, or damage to expensive property, the minimum coverage limits required by law may not be enough. Choosing low liability limits could be an unwise way to save on insurance.
Bodily Injury Liability
This coverage, combined with property damage liability coverage, is the foundation of any auto insurance policy and is required in most states. If bodily injury claims or lawsuits are brought against you and if an investigation or a court finds you to be legally responsible for injuries to persons, your bodily injury liability insurance will pay, up to your policy limit, for injuries to other people - such as pedestrians, passengers in your car, or people in other vehicles. Also, bodily injury liability coverage provides for your legal defense against those bodily injury claims or lawsuits, should it become necessary.
Although it varies by state, bodily injury coverage does not generally pay for your own injuries or to your spouse or other family members, especially when they are not in your covered vehicle. Injuries to you, your spouse, and other family members in your vehicle can be protected more completely by medical payments coverage.
There are different limits of bodily injury liability coverage. Different limits of coverage are offered to accommodate various levels of protection. If you are found to be responsible for a serious accident with injuries to several people, in your car or in other cars, or if there is even one serious injury or death, your state's minimum insurance may not cover you adequately. An objective in selecting limits of any liability coverage should be to purchase coverage equal to the net asset value that you have available and could reasonably lose in the event of causing damages to others. It is a good idea to consider and purchase higher limits than what your state requires.
Although it varies by state, bodily injury coverage does not generally pay for your own injuries or to your spouse or other family members, especially when they are not in your covered vehicle. Injuries to you, your spouse, and other family members in your vehicle can be protected more completely by medical payments coverage.
There are different limits of bodily injury liability coverage. Different limits of coverage are offered to accommodate various levels of protection. If you are found to be responsible for a serious accident with injuries to several people, in your car or in other cars, or if there is even one serious injury or death, your state's minimum insurance may not cover you adequately. An objective in selecting limits of any liability coverage should be to purchase coverage equal to the net asset value that you have available and could reasonably lose in the event of causing damages to others. It is a good idea to consider and purchase higher limits than what your state requires.
Property Damage Liability
This coverage, combined with bodily injury liability coverage, is the foundation of any auto insurance policy and is required in most states. If property damage claims or lawsuits are brought against you and if an investigation or a court finds you to be legally responsible for damages to property, your property damage liability insurance will pay, up to your policy limit, for repair or replacement of things like someone else's car, light posts, or even buildings. Also, property damage liability coverage provides for your legal defense against those property damage claims or lawsuits, should it become necessary. Property damage coverage does not pay for the damage to your own property, damages to your property are covered under the optional collision and comprehensive coverage.
There are different limits of property damage liability insurance. Different limits of coverage are offered to accommodate various levels of protection. If you are found to be responsible for a serious accident with damages to several vehicles, or even one expensive vehicle, your state's minimum insurance may not cover you adequately. An objective in selecting limits of any liability coverage should be to purchase coverage equal to the net asset value that you have available and could reasonably lose in the event of causing damages to others. It is a good idea to consider and purchase higher limits than what your state requires.
Each state's Financial Responsibility Law requires minimum property damage liability limits.
There are different limits of property damage liability insurance. Different limits of coverage are offered to accommodate various levels of protection. If you are found to be responsible for a serious accident with damages to several vehicles, or even one expensive vehicle, your state's minimum insurance may not cover you adequately. An objective in selecting limits of any liability coverage should be to purchase coverage equal to the net asset value that you have available and could reasonably lose in the event of causing damages to others. It is a good idea to consider and purchase higher limits than what your state requires.
Each state's Financial Responsibility Law requires minimum property damage liability limits.
Medical Payments
This optional coverage pays, up to the policy limit per person, for medical expenses regardless of fault for you and the occupants of your covered vehicle who are injured in an automobile accident. It also protects you and the relatives living in your household if they are injured in someone else's car, or by a car as pedestrians. All reasonable and necessary medical expenses are covered within the period of time specified in your policy. This coverage is valuable if you do not have health insurance, because payment will be made while the liability is being determined.
Comprehensive Coverage
This optional coverage applies if your car is damaged by fire, theft, vandalism, glass breakage, windstorm or even contact with an animal. The coverage provides to repair your car, or pay the actual cash value if the car is deemed to be a total loss, less your deductible. Comprehensive coverage does not cover wear and tear, engine failure, or other mechanical difficulties. When you are financing your car, comprehensive coverage may be required by the lien holder.
Collision Coverage
This optional coverage provides the payment to fix your car, or pay the actual cash value if the car is deemed to be a total loss, if it is overturned or damaged in a collision with another car or object. This coverage would pay for damages to your covered vehicle regardless of who is at fault, but this coverage is subject to a deductible. As with comprehensive coverage, if you are financing your car the lienholder may require collision coverage.
Rental Reimbursement Coverage
This optional coverage is invaluable if you have a covered loss and you do not have another car to use while yours is being repaired. This coverage is available for purchase if you carry collision or comprehensive coverages on the vehicle. We will reimburse you, up to the policy limit, for rental car expenses incurred when the covered vehicle is not driveable or is in the shop for repairs during a reasonable period due to a covered loss. The policy limits are a per day dollar limit up to a total dollar limit per accident. Several limit combinations are available for many types of vehicles.
Uninsured Motorist Coverage
Suppose you are injured in an accident caused by an uninsured motorist? Or, what if you are injured by a hit-and-run driver?
This coverage is commonly referred to as UM coverage. This coverage is important and is required in many states because even in mandatory insurance states there are still vehicles without insurance coverage in force at some time during the year. This coverage pays for injuries, up to the coverage limit, caused by a driver who is uninsured, or an unidentified hit-and-run driver, who is legally liable for those injuries. This coverage also protects relatives who live with you, the occupants of your insured car, and while you are a pedestrian.Please note that uninsured motorist coverage does not pay for damage to your car which was caused by an uninsured motorist. Damage to your car would be covered under collision coverage or uninsured motorist property damage coverage if it is allowed in your state and you carry it on your vehicle.
The coverages and limits vary by state
This coverage is commonly referred to as UM coverage. This coverage is important and is required in many states because even in mandatory insurance states there are still vehicles without insurance coverage in force at some time during the year. This coverage pays for injuries, up to the coverage limit, caused by a driver who is uninsured, or an unidentified hit-and-run driver, who is legally liable for those injuries. This coverage also protects relatives who live with you, the occupants of your insured car, and while you are a pedestrian.Please note that uninsured motorist coverage does not pay for damage to your car which was caused by an uninsured motorist. Damage to your car would be covered under collision coverage or uninsured motorist property damage coverage if it is allowed in your state and you carry it on your vehicle.
The coverages and limits vary by state
Underinsured Motorist Coverage
What if you are injured and the coverage limits of the person at fault are not enough to pay your medical bills?This coverage is commonly referred to as UIM coverage. This coverage will apply if another driver, who is legally responsible for an accident which injures you, is required to pay more than their bodily injury liability coverage limits. This coverage will pay up to the coverage limit, but only after all of the liable person's coverage limits have been exhausted. This coverage also protects relatives who live with you, and as a pedestrian.
The coverages and limits vary by state
The coverages and limits vary by state
Frequently Asked Questions
1. How is my automotive insurance rate determined?
Insurance companies utilize statistical history to determine the rates needed to cover any potential claims and business expenses. Several factors are used to determine you’re your specific rate, including but not limited to:
Your age
The make and model of your car
Your driving record
The car’s purpose
Where you drive
Where the car is stored
Your credit rating
2. Why do rate quotes vary depending on the insurance company?
An insurance company’s claim experience, the types of people they insure, and cost for doing business vary from company to company and may cause rates to differ - even by hundreds of dollars.
3. What is a deductible?
A deductible is the amount of each claim that you agree to pay before the insurance company provides compensation for any loss. In other words, the insurance company will pick-up the cost for any damages sustained minus the deductible.
4. What is a premium?
A premium is the monthly amount the insured pays to the insurance company to keep their policy in force.
5. If my car is “totaled,” do I get a new one?
Most automotive insurance policies provide actual cash value settlements. Actual cash value is based on the cost to replacing a stolen, lost, or damaged item with a new comparable item minus its deprecation it incurred at the time of the incident.
6. Are other people who drive my car insured under my insurance policy?
To ensure coverage, you should list those individuals on your policy who regularly use your car. However, in general, those who are given permission to drive your car are covered.
7. Should family members be listed on my automotive insurance policy?
Any immediate or extended family member who is of driving age that resides with you, including parents, children, siblings, grandparents, and in-laws, should be listed on your automotive insurance policy. This protects both you and the insurance company particularly in the event of any unforeseen emergency situations.
8. Can the driving record of my family members impact my ability to secure an automotive insurance policy?
The driving or accident record of any licensed family member in your household can affect whether or not the insurance company decides to insure your vehicle and the premium rates they offer you.
9. Can the insurance company cancel my policy?
An insurance company can cancel an automotive policy if the insured fails to pay their monthly premium or if the insured’s license has been suspended or revoked during the term of the policy.
10. Can my automotive insurance company refuse to renew my policy?
An insurance company has the right not to renew your policy as long as they provide a 30 day notice to the insured and include a specific reason for their refusal to renew.
11. If I cancel my policy, am I entitled to a refund of my premium?
In the event that a premium is paid and the insured decides to cancel the policy shortly thereafter, the insured is entitled to the unearned portion of the premium. In general, insurance companies determine the refund by prorating the premium amount over the course of the month and deducting any cancellation fees.
12. What does uninsured motorist protection cover?
Uninsured motorist protection only covers bodily injuries sustained (while in your car or as a pedestrian) by a driver who does not have insurance or a hit-and-run.
13. What do I do if I get in an accident with an uninsured motorist?
If you should get into an accident with an uninsured motorist, contact you state’s Department of Revenue to enforce the financial responsibility laws of your state. Be sure to report any losses to your insurance company under the uninsured motorist portion of your policy.
14. If I contact my insurance company about a loss but never collected any benefits, do they still consider it a claim?
Any inquiry about coverage in the event of a loss is still considered a claim and part of the insured’s claim history.
15. Does my automotive policy cover car rentals?
In regards to car rentals, policies vary depending on the insurance company. In general, automotive policies cover the insured when they are renting a car on vacation or during business travel.
16. What is an extended warranty?
An automotive extended warranty is a service contract on your vehicle between the warranty company and you. You pay the warranty company on an annual or monthly basis and they pay for any car repairs covered by the contract. Auto warranties are NOT insurance policies.
Insurance companies utilize statistical history to determine the rates needed to cover any potential claims and business expenses. Several factors are used to determine you’re your specific rate, including but not limited to:
Your age
The make and model of your car
Your driving record
The car’s purpose
Where you drive
Where the car is stored
Your credit rating
2. Why do rate quotes vary depending on the insurance company?
An insurance company’s claim experience, the types of people they insure, and cost for doing business vary from company to company and may cause rates to differ - even by hundreds of dollars.
3. What is a deductible?
A deductible is the amount of each claim that you agree to pay before the insurance company provides compensation for any loss. In other words, the insurance company will pick-up the cost for any damages sustained minus the deductible.
4. What is a premium?
A premium is the monthly amount the insured pays to the insurance company to keep their policy in force.
5. If my car is “totaled,” do I get a new one?
Most automotive insurance policies provide actual cash value settlements. Actual cash value is based on the cost to replacing a stolen, lost, or damaged item with a new comparable item minus its deprecation it incurred at the time of the incident.
6. Are other people who drive my car insured under my insurance policy?
To ensure coverage, you should list those individuals on your policy who regularly use your car. However, in general, those who are given permission to drive your car are covered.
7. Should family members be listed on my automotive insurance policy?
Any immediate or extended family member who is of driving age that resides with you, including parents, children, siblings, grandparents, and in-laws, should be listed on your automotive insurance policy. This protects both you and the insurance company particularly in the event of any unforeseen emergency situations.
8. Can the driving record of my family members impact my ability to secure an automotive insurance policy?
The driving or accident record of any licensed family member in your household can affect whether or not the insurance company decides to insure your vehicle and the premium rates they offer you.
9. Can the insurance company cancel my policy?
An insurance company can cancel an automotive policy if the insured fails to pay their monthly premium or if the insured’s license has been suspended or revoked during the term of the policy.
10. Can my automotive insurance company refuse to renew my policy?
An insurance company has the right not to renew your policy as long as they provide a 30 day notice to the insured and include a specific reason for their refusal to renew.
11. If I cancel my policy, am I entitled to a refund of my premium?
In the event that a premium is paid and the insured decides to cancel the policy shortly thereafter, the insured is entitled to the unearned portion of the premium. In general, insurance companies determine the refund by prorating the premium amount over the course of the month and deducting any cancellation fees.
12. What does uninsured motorist protection cover?
Uninsured motorist protection only covers bodily injuries sustained (while in your car or as a pedestrian) by a driver who does not have insurance or a hit-and-run.
13. What do I do if I get in an accident with an uninsured motorist?
If you should get into an accident with an uninsured motorist, contact you state’s Department of Revenue to enforce the financial responsibility laws of your state. Be sure to report any losses to your insurance company under the uninsured motorist portion of your policy.
14. If I contact my insurance company about a loss but never collected any benefits, do they still consider it a claim?
Any inquiry about coverage in the event of a loss is still considered a claim and part of the insured’s claim history.
15. Does my automotive policy cover car rentals?
In regards to car rentals, policies vary depending on the insurance company. In general, automotive policies cover the insured when they are renting a car on vacation or during business travel.
16. What is an extended warranty?
An automotive extended warranty is a service contract on your vehicle between the warranty company and you. You pay the warranty company on an annual or monthly basis and they pay for any car repairs covered by the contract. Auto warranties are NOT insurance policies.
Home Insurance
If you own your own home, then you'll want to protect not only your physical building, but all the things that are in your home too. A standard home insurance policy will ensure that if something like fire, vandalism or theft occurs, then you will be properly looked after and your valuables will be replaced.
You also need to think about protecting any other structures that exist on your property, like a detached garage. And, in the event that your home is damaged, and you need to move out for a while, you may want to consider investing in insurance that will help pay for out-of-pocket expenses like hotel rooms and food.
As a homeowner, it is possible that you may be held liable for accidents that people have while on your property. What's more, you may accidentally damage other people's belongings either in your own home, or somewhere else. A well-structured home insurance plan will make sure that you're covered for any of these unforeseeable events.
You also need to think about protecting any other structures that exist on your property, like a detached garage. And, in the event that your home is damaged, and you need to move out for a while, you may want to consider investing in insurance that will help pay for out-of-pocket expenses like hotel rooms and food.
As a homeowner, it is possible that you may be held liable for accidents that people have while on your property. What's more, you may accidentally damage other people's belongings either in your own home, or somewhere else. A well-structured home insurance plan will make sure that you're covered for any of these unforeseeable events.
Condominium Insurance
When you purchase a condominium, you own your "unit" and own a share in the common areas of the condominium -- the roof, basement, elevator, heating room, lobby, swimming pool, parking garage, or garden. As a condominium owner, you may be held responsible for harm you might cause to any part of your building, or to others who live or visit the condominium complex. A condominium insurance policy can remove some of the financial worries of condominium ownership.
You'll need two separate policies to protect your investment.
Your own insurance policy.The insurance policy provides coverage for your personal property, structural improvements to your unit and additional living expenses if you are the victim of fire, theft or other disaster listed in your policy. You will get liability protection to protect you for harm you might cause to any part of the building you live in or to others who live in or visit the condominium complex.
An important feature of your own insurance policy is loss assessment. As a condominium owner, you share responsibility with others in your building for common property. Loss assessment protects you from damage to these common areas. See the Loss Assessment section for more details. A "master policy" purchased and provided by the condominium board. This covers the common areas you share with others in your building like the roof, basement, elevator, heating room, lobby, swimming pool, parking garage, or garden for both liability and physical damage.
Sometimes the condominium corporation is responsible for insuring the individual condominium as it was originally built, including standard fixtures. In this case, you'd only be responsible for insuring your personal property and any alterations you or a previous owner have made to the original structure of the condominium like remodelling the kitchen or bathtub. In other cases, the condominium corporation is responsible for insuring only the bare walls, floor and ceiling. You'd be responsible for insuring your personal property, plus things like the kitchen cabinets, built-in appliances, plumbing, wiring and bathroom fixtures. Take the time to find out what's included in the condominium corporation's policy. You can then decide what to include in your personal insurance policy.
Limitations in property policy coverage
Your standard property policy will have limitations in theft coverage for jewelry and furs, silverware, business property, bicycles, money, boat and motor. If you own any of these special items, it's a good idea to consider adding additional coverage to your policy.
Paying a property insurance deductible
When you make a claim, a small portion of the claim is always paid by you first, then your insurance company pays the rest. The portion you pay is called your deductible. The amount of your deductible affects the price of your insurance policy. The higher your deductible, the less the cost of your insurance premium.
You'll need two separate policies to protect your investment.
Your own insurance policy.The insurance policy provides coverage for your personal property, structural improvements to your unit and additional living expenses if you are the victim of fire, theft or other disaster listed in your policy. You will get liability protection to protect you for harm you might cause to any part of the building you live in or to others who live in or visit the condominium complex.
An important feature of your own insurance policy is loss assessment. As a condominium owner, you share responsibility with others in your building for common property. Loss assessment protects you from damage to these common areas. See the Loss Assessment section for more details. A "master policy" purchased and provided by the condominium board. This covers the common areas you share with others in your building like the roof, basement, elevator, heating room, lobby, swimming pool, parking garage, or garden for both liability and physical damage.
Sometimes the condominium corporation is responsible for insuring the individual condominium as it was originally built, including standard fixtures. In this case, you'd only be responsible for insuring your personal property and any alterations you or a previous owner have made to the original structure of the condominium like remodelling the kitchen or bathtub. In other cases, the condominium corporation is responsible for insuring only the bare walls, floor and ceiling. You'd be responsible for insuring your personal property, plus things like the kitchen cabinets, built-in appliances, plumbing, wiring and bathroom fixtures. Take the time to find out what's included in the condominium corporation's policy. You can then decide what to include in your personal insurance policy.
Limitations in property policy coverage
Your standard property policy will have limitations in theft coverage for jewelry and furs, silverware, business property, bicycles, money, boat and motor. If you own any of these special items, it's a good idea to consider adding additional coverage to your policy.
Paying a property insurance deductible
When you make a claim, a small portion of the claim is always paid by you first, then your insurance company pays the rest. The portion you pay is called your deductible. The amount of your deductible affects the price of your insurance policy. The higher your deductible, the less the cost of your insurance premium.
Standard Home Coverage
Building coverage
All risk coverage insures your building for the most common types of losses. When you have All Risk coverage , your building is insured for everything, unless it's specifically excluded from your policy (e.g. intentional damage to your own property would not be covered).
Named-Perils coverage includes a list of the most common types of things covered under your insurance. Named-Perils includes fire, theft and water damage. Everything is listed very clearly in your policy booklet so you have a complete and thorough understanding of what your insurance policy covers.
Named-Perils building coverage is very rare. After all, your home is probably the largest investment you will ever make - why would you not want it fully protected?
Contents
All-risk contents coverage insures your belongings inside your home for the most common types of losses. When you have All Risk coverage, your contents are insured for everything, unless it's specifically excluded from your policy. Named-Perils coverage includes a list of the most common types of things covered under your insurance. Named-Perils includes fire, theft and water damage. Everything is listed very clearly in your policy booklet so you have a complete and thorough understanding of what your insurance policy covers.
A standard home policy provides for the Actual Cash Value (ACV) replacement of your belongings. This means you only receive the value of the item, less depreciation. For example, if you purchased a TV 5 years ago for $500, you might only get $100 for it if it were destroyed in a fire. Even though it may cost you $600 to replace that same TV today, your insurance would still only give you $100. Many people choose to add the Replacement Value option to their contents coverage. Replacement value coverage means that the contents of your home are insured for the amount it costs to replace them. When you replace the item(s) with a similar kind and quality, within a specified time, the insurer will pay you what it cost you to replace the item(s) not what they were actually worth in their used state. This means if your 5 year-old TV was lost in a fire, you would get the full amount it would cost to replace it, even if that is more than you paid for the TV in the first place.
Detached private structure
This type of coverage applies to structures that exist on your property, but that are not connected to your primary residence. For instance, a detached garage could be included under this coverage. There is usually a certain limit assigned to this kind of coverage, but you can always increase that limit by purchasing additional coverage options.
Additional living expenses
If you are forced to leave your home because of a loss, this coverage pays for your reasonable and necessary expenses to temporarily live away from home. Hotel and food costs are the type of expenses that would be covered under such circumstances. There is usually a limit on this kind of coverage.
Personal liability
Liability is a legal responsibility. Liability insurance protects you from having to pay damages to people, if you've been found responsible for unintentionally injuring them or damaging their property.
Here are some examples:
If someone injures himself/herself on the property you occupy, you may be responsible for damages. For example, if someone slips on your front steps, breaks his/her leg, and can't go to work, you could be held responsible for the person's lost wages.
If you or a member of your family damages another person's property, you may be held liable. So if your son accidentally throws a baseball through the neighbor's window, and breaks an expensive antique, you may have to pay.
The beauty of liability insurance is that it protects you anywhere in the world. Say for example, if your golf club accidentally flies out of your grip on a Florida golf course, strikes and injures another player. Liability insurance would cover this accident.
All risk coverage insures your building for the most common types of losses. When you have All Risk coverage , your building is insured for everything, unless it's specifically excluded from your policy (e.g. intentional damage to your own property would not be covered).
Named-Perils coverage includes a list of the most common types of things covered under your insurance. Named-Perils includes fire, theft and water damage. Everything is listed very clearly in your policy booklet so you have a complete and thorough understanding of what your insurance policy covers.
Named-Perils building coverage is very rare. After all, your home is probably the largest investment you will ever make - why would you not want it fully protected?
Contents
All-risk contents coverage insures your belongings inside your home for the most common types of losses. When you have All Risk coverage, your contents are insured for everything, unless it's specifically excluded from your policy. Named-Perils coverage includes a list of the most common types of things covered under your insurance. Named-Perils includes fire, theft and water damage. Everything is listed very clearly in your policy booklet so you have a complete and thorough understanding of what your insurance policy covers.
A standard home policy provides for the Actual Cash Value (ACV) replacement of your belongings. This means you only receive the value of the item, less depreciation. For example, if you purchased a TV 5 years ago for $500, you might only get $100 for it if it were destroyed in a fire. Even though it may cost you $600 to replace that same TV today, your insurance would still only give you $100. Many people choose to add the Replacement Value option to their contents coverage. Replacement value coverage means that the contents of your home are insured for the amount it costs to replace them. When you replace the item(s) with a similar kind and quality, within a specified time, the insurer will pay you what it cost you to replace the item(s) not what they were actually worth in their used state. This means if your 5 year-old TV was lost in a fire, you would get the full amount it would cost to replace it, even if that is more than you paid for the TV in the first place.
Detached private structure
This type of coverage applies to structures that exist on your property, but that are not connected to your primary residence. For instance, a detached garage could be included under this coverage. There is usually a certain limit assigned to this kind of coverage, but you can always increase that limit by purchasing additional coverage options.
Additional living expenses
If you are forced to leave your home because of a loss, this coverage pays for your reasonable and necessary expenses to temporarily live away from home. Hotel and food costs are the type of expenses that would be covered under such circumstances. There is usually a limit on this kind of coverage.
Personal liability
Liability is a legal responsibility. Liability insurance protects you from having to pay damages to people, if you've been found responsible for unintentionally injuring them or damaging their property.
Here are some examples:
If someone injures himself/herself on the property you occupy, you may be responsible for damages. For example, if someone slips on your front steps, breaks his/her leg, and can't go to work, you could be held responsible for the person's lost wages.
If you or a member of your family damages another person's property, you may be held liable. So if your son accidentally throws a baseball through the neighbor's window, and breaks an expensive antique, you may have to pay.
The beauty of liability insurance is that it protects you anywhere in the world. Say for example, if your golf club accidentally flies out of your grip on a Florida golf course, strikes and injures another player. Liability insurance would cover this accident.
Frequently Asked Questions
1. What's the difference between the "actual cash value" and the "replacement cost"?
Actual cash value and replacement cost describe payment of covered losses through your homeowner's insurance policy. If you policy uses an actual cash value determination, you're entitled to the depreciated value of damaged property. If your policy uses the replacement cost determination, you'll receive the actual cost to replace damaged property at current prices.
2. Is my personal property covered if it's not at my home during the time of loss?
Your homeowner's insurance policy Coverage C, or the named perils coverage, describes personal property coverage anywhere in the world. For instance, if you make a household purchase abroad and ship this home, your policy will cover your purchase in transit even if the property has never been in your home.
3. What is a public adjuster?
Your insurance company provides an adjuster to you at no charge. You may also be contacted by adjusters with no relationship to your insurance provider, or a public adjuster. Public adjusters may help you settle a claim for as much as 15 percent of the total settlement value. This fee is not covered by your insurance policy. Your state's insurance department may set a percentage that public adjusters can charge. If you use a public adjuster, check their qualifications by calling your state insurance department. Always avoid individuals who solicit door-to-door after a major disaster.
4. Does my homeowner's policy protect against earthquake damage?
Earthquake damages are not covered under standard homeowner's insurance. If you are at risk, add an earthquake endorsement to your policy that covers damages caused by earthquake, landslide, volcano or other land movements.
5. What's the difference between all risk and named perils policies?
All risk and named perils policies cover different causes of loss. A named perils policy covers your losses resulting in the perils listed in your policy, typically including ire, hail, windstorm or other physical losses. While an all risk policy offers broader protection covering losses resulting from any peril except those specifically excluded in your policy.
6. If I'm sued, who covers legal defense expenses?
Your homeowners policy doesn't cover legal defense expenses, but may provide legal counsel.
7. How do I find out if an accident is covered under my homeowner's insurance policy?
Policy owners have responsibilities to adhere to before receiving compensation for a loss. If you feel a claim should be filed, notify the insurance company or agent as soon as possible after discovery. Follow the steps to file a claim as advised by your insurance company.
8. What are policies regarding mobile homes?
Mobile home policies can be covered under a replacement cost, actual cash value or stated amount. A stated amount policy covers an agreed upon amount at policy issue regardless of depreciation value. If you choose a stated amount policy, review and update terms annually to ensure replacement of your mobile home is a realistic amount.
9. What is an extended or guaranteed replacement cost policy?
If your home is destroyed beyond repair, your insurance policy typically covers the value of rebuilding your home. An extended or guaranteed replacement cost policy protects within a certain percentage above in the event building expenses have risen unexpectedly.
Actual cash value and replacement cost describe payment of covered losses through your homeowner's insurance policy. If you policy uses an actual cash value determination, you're entitled to the depreciated value of damaged property. If your policy uses the replacement cost determination, you'll receive the actual cost to replace damaged property at current prices.
2. Is my personal property covered if it's not at my home during the time of loss?
Your homeowner's insurance policy Coverage C, or the named perils coverage, describes personal property coverage anywhere in the world. For instance, if you make a household purchase abroad and ship this home, your policy will cover your purchase in transit even if the property has never been in your home.
3. What is a public adjuster?
Your insurance company provides an adjuster to you at no charge. You may also be contacted by adjusters with no relationship to your insurance provider, or a public adjuster. Public adjusters may help you settle a claim for as much as 15 percent of the total settlement value. This fee is not covered by your insurance policy. Your state's insurance department may set a percentage that public adjusters can charge. If you use a public adjuster, check their qualifications by calling your state insurance department. Always avoid individuals who solicit door-to-door after a major disaster.
4. Does my homeowner's policy protect against earthquake damage?
Earthquake damages are not covered under standard homeowner's insurance. If you are at risk, add an earthquake endorsement to your policy that covers damages caused by earthquake, landslide, volcano or other land movements.
5. What's the difference between all risk and named perils policies?
All risk and named perils policies cover different causes of loss. A named perils policy covers your losses resulting in the perils listed in your policy, typically including ire, hail, windstorm or other physical losses. While an all risk policy offers broader protection covering losses resulting from any peril except those specifically excluded in your policy.
6. If I'm sued, who covers legal defense expenses?
Your homeowners policy doesn't cover legal defense expenses, but may provide legal counsel.
7. How do I find out if an accident is covered under my homeowner's insurance policy?
Policy owners have responsibilities to adhere to before receiving compensation for a loss. If you feel a claim should be filed, notify the insurance company or agent as soon as possible after discovery. Follow the steps to file a claim as advised by your insurance company.
8. What are policies regarding mobile homes?
Mobile home policies can be covered under a replacement cost, actual cash value or stated amount. A stated amount policy covers an agreed upon amount at policy issue regardless of depreciation value. If you choose a stated amount policy, review and update terms annually to ensure replacement of your mobile home is a realistic amount.
9. What is an extended or guaranteed replacement cost policy?
If your home is destroyed beyond repair, your insurance policy typically covers the value of rebuilding your home. An extended or guaranteed replacement cost policy protects within a certain percentage above in the event building expenses have risen unexpectedly.
Umbrella Insurance
Umbrella insurance ins't just for the rich. Whether it's a serious at-fault auto accident or an incident on your property, you can quickly find yourself responsible for damages that exceed the limits on your auto, homeowners, renters or boat policy.
And an expensive judgment is the last thing you want to worry about. An umbrella policy can help protect your assets and provide additional insurance protection.
Will my primary insurance policies be enough?
Auto, Homeowners and other property insurance liability limits may not be adequate to cover a large court judgment, because most Auto Liability has a maximum limit of $500,000, which could deplete extremely fast if an accident involves major bodily injury.
Enjoy peace of mind
To make it easy for you to get the right level of coverage for your specific needs, we offer limits ranging from $1 million to $10 million for customers meeting eligibility criteria. And, when you require legal defense for a covered claim, the policy helps cover defense cost such as attorney's fees and other expenses.
And an expensive judgment is the last thing you want to worry about. An umbrella policy can help protect your assets and provide additional insurance protection.
Will my primary insurance policies be enough?
Auto, Homeowners and other property insurance liability limits may not be adequate to cover a large court judgment, because most Auto Liability has a maximum limit of $500,000, which could deplete extremely fast if an accident involves major bodily injury.
Enjoy peace of mind
To make it easy for you to get the right level of coverage for your specific needs, we offer limits ranging from $1 million to $10 million for customers meeting eligibility criteria. And, when you require legal defense for a covered claim, the policy helps cover defense cost such as attorney's fees and other expenses.
Renter's Insurance
If you're moving into your first apartment, you might think you don't have anything of real value. A CD player, computer and some clothes may not look as if it's worth much, but when you have to replace it with something new, it could break your budget. Say you've bought a computer on credit and it's destroyed by fire or stolen. You're still responsible for paying the balance to your creditor, even though you no longer have the item.
As a tenant or renter in someone else's building, it's a wise decision to take out a tenant insurance policy. It protects both your contents and your liability exposure. You see, as a tenant, you're responsible for harm you might cause to any part of the building you live in, or to others who live or visit there. If you forgot to turn off the water in the bathtub while you're talking to your friend, you could flood out your neighbours. You would be responsible to repair any resulting damages.
Other things to consider
Tenant's improvements coverage is also important. If you've made improvements to your rental unit -- like new broadloom, painting or sound systems -- they might not be covered in a standard tenant insurance policy. Improvements coverage would be a smart investment.
There are lots of other insurance options, too. As a tenant, your insurance policy coverage can be either All Risk or Named Perils. There's protection against Sewer Backup and Earthquake. And you may want to add extra coverage for specific contents in your home, such as jewellery, furs, cameras, and bicycles. You'll find more details on all of these options in this home insurance basics section.
As a tenant or renter in someone else's building, it's a wise decision to take out a tenant insurance policy. It protects both your contents and your liability exposure. You see, as a tenant, you're responsible for harm you might cause to any part of the building you live in, or to others who live or visit there. If you forgot to turn off the water in the bathtub while you're talking to your friend, you could flood out your neighbours. You would be responsible to repair any resulting damages.
Other things to consider
Tenant's improvements coverage is also important. If you've made improvements to your rental unit -- like new broadloom, painting or sound systems -- they might not be covered in a standard tenant insurance policy. Improvements coverage would be a smart investment.
There are lots of other insurance options, too. As a tenant, your insurance policy coverage can be either All Risk or Named Perils. There's protection against Sewer Backup and Earthquake. And you may want to add extra coverage for specific contents in your home, such as jewellery, furs, cameras, and bicycles. You'll find more details on all of these options in this home insurance basics section.
