Basics About Insurance Policies Antioch Residents Should Know
Insurance can be a very complicated thing for most people. There is so many different premiums and different types of insurance that it can make your head spin. This article will help clarify for you.
First, let’s start off by understanding what insurance is.
Insurance is a contract between the insurer and the insured. Now when your insurer, that refers to the company that’s selling you the insurance policy. That could be Farmer’s, Geico, Allstate or any of several large insurance companies.
Now, the insured is you and I when we take up the policy we are called as the insured. Now, why would anyone go about taking up an insurance policy?
You take taking up an insurance policy because you want to protect yourself and your family in case any accidents were to occur. What eventualities? Not something to discuss right this second, but in case something were to happen, an insurance company can compensate if these eventualities were to occur.
Now you have an offer and a consideration that goes about happening here. The offer is that the insurance company will take care of you and your family if the eventualities were to occur. However, the consideration that you need to pay here is the premium.
Each insurance policy has an associated premium. Depending upon the type of coverage you have, the price or the value of the premium will vary. Keeping that in mind, there are lots of different categories of insurance that you need to be wary and aware of moving forward. Don’t worry I will go into each one with you.
Getting yourself or your loved ones some car insurance seems simple enough, but in reality, once you begin to search; it can indeed start to feel overwhelming.
Let’s break down the four basic coverages of the standard personal auto policy:
General Liability coverage
Liability Coverage provides you with the coverage you need if you’re at-fault in an automobile accident. This coverage offers two types of protection:
- Coverage for injuries to other people
- Coverage for damage to someone else’s property while you or a family member are operating an automobile
So, if you accidentally hit someone else’s car and injure the other driver, your liability coverage would pay for not only the covered damages to their vehicle but also for the medical expenses related to their injuries. . .
And yes, I said “their” injuries, not your own, which leads us to our second coverage. . .
Medical Payments Coverage
Because Liability Coverage only provides coverage for injuries caused to the other people involved you’ll need Medical Payments Coverage to help pay medical expenses related to injuries sustained by you or your passengers in an accident. This coverage comes into play no matter who is at fault. The third part of personal auto insurance is:
Uninsured Motorists Coverage
Uninsured Motorist Coverage is an extended section of car insurance protects you if you’re involved in an accident with someone who breaks the law by not carrying their own auto liability insurance. It does this by helping pay for any medical expenses you incur as a result of getting hit by an uninsured driver. And although it may not sound fair, these types of accidents do happen. According to statistics, nearly one in seven drivers on the road is uninsured, which makes protecting yourself an absolute necessity!
In many states, you can also purchase additional protection called Underinsured Motorists Coverage.
Underinsured Motorist Coverage provides you with additional protection, for when the other driver has insurance coverage, but just not enough to comprehensively cover all of your medical expenses.
By now, you may be wondering how you’re going to pay for damages to your own car. That’s where the fourth and final part of your auto policy comes into play. . .
Coverage for Damage to your Car, also known as Physical Damage coverage. It pays for direct and accidental loss to your vehicle.
There are two parts to Physical Damage coverage:
- Collision – for when your car impacts another vehicle or object or is upset
- Other Than Collision, which covers almost any other type of direct, accidental loss not excluded by your policy
Your home is your most valuable investment, so it only makes sense to protect that investment with insurance. The standard homeowner’s policy is divided into two sections:
- Property Coverages
- Liability Coverages
Let’s start by taking a closer look at the first category:
1st Coverage: – “Dwelling” provides protection for your home and the structures attached to your home.
2nd Coverage: – “Other Structures” takes care of all the building and structures apart from your house that is located somewhere on your land. An example of this could be a detached garage or shed.
3rd Coverage: – “Personal Property” covers the contents of your home, such as furniture, appliances, clothing, and toys.
4th Coverage: – “Loss of Use” provides coverage for your additional living expenses when you have “lost” use of your home. For example, if you have to vacate your home due to damage from a covered loss – Such as a fire or a tornado – this coverage will pay for the additional cost of a hotel or other temporary living expenses you would not typically have until the damage to your home can be repaired.
One important note about Homeowners insurance. . . Not all causes of loss are covered, such as floods. Homeowner policies are designed to provide coverage for exposures that most homeowners are at risk to incur. This helps to keep the cost of insurance affordable. Not everyone lives in an area where flooding is a risk. If you do, you might be able to purchase a separate policy to provide coverage, and your independent insurance agent can help with that.
While the landlord or owner of the building you live in likely carries insurance, that insurance only provides coverage for the building itself, not your personal property inside that building.
Where would you get coverage for your furnishings, clothing, and electronics? The answer is Renter’s insurance!
A renters policy offers protection for your personal property at your place of residence, or anywhere in the world, against covered losses. Examples of some covered losses include lightning, wind or hail, along with theft or fire.
Renter’s insurance, like a homeowners policy, has two sections:
- Property coverage
- Liability coverage
The main difference between the two policies is the property coverage section under a renters policy does not cover the building you live in or other structures on the property – only your personal belongings inside that building.
This section of the policy also includes coverage for small alterations or additions you may have made to your rental your own expense.
A renter’s policy also provides Loss of Use coverage for any additional living expenses you incur when you have lost the use of your home.
For example, should you have to vacate your apartment due to a fire in the building, this coverage would pay for the additional cost of a hotel or other temporary living expenses you would normally have to cover until the damage to your apartment can be repaired.
The second part of a renter’s policy provides liability and medical payments coverages. Liability coverage protects you and your guests for unintended damage to your rental, or for an accident that occurs in your home.
For example, if you were to leave the water running and flood your apartment (and maybe the one below), your liability coverage would pay for the damages (up to the policy’s limit, of course). And should the tenant of that apartment below you choose to sue you for their losses, this coverage could also defend you against a lawsuit and help pay for the expenses associated with that lawsuit.
Medical Payments Coverage pays for medical bills incurred by guests injured on your property. It also covers injury you cause to someone else while you’re away from home.
So should a guest in your home fall and injure themselves, or if you poke someone in the eye with your umbrella while getting on the bus, your renter’s policy will cover their medical expenses, as well as any legal fees incurred because of the incident.
This coverage does not, however, cover your medical bills if you are injured. Your health insurance would take effect in this situation.
That covers insurance in general terms and also some other essential coverage that you should consider looking into. For more detailed information, give us a call.
For more information make sure to contact us today! (925)757-1000
or visit us at:
Hernandez-Steele Insurance Agency
5167 Lone Tree Way, Antioch, CA 94531
We welcome the opportunity to address your auto, home or life insurance needs
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