| What is Liability Insurance? |
| What is Uninsured or Underinsured Motorist Coverage? |
| What is Collision and Comprehensive Coverage? |
| What is Personal Injury Protection? |
| What is Term Life Insurance? |
| What is Permanent Life Insurance? |
| What is Whole Life Insurance? |
| What is Property and Casualty Insurance? |
What is Liability Insurance? |
Liability insurance is usually considered a necessity, and many states have a minimum legal requirement for liability coverage. This type of insurance helps protect, up to the policy limits, against injury claims and property-damage suits brought by other drivers, pedestrians, or property owners if you are at fault in an accident. Your liability policy pays for injuries suffered by others and the costs of damage to other people’s property, as well as legal costs, if necessary, up to a dollar limit. You can choose a policy with an overall limit for all liabilities, or you can select one with separate limits for (1) individuals injured in an accident, (2) all injuries in the same accident, and (3) property damage. |
| What is Uninsured or Underinsured Motorist Coverage? |
| A policy with an uninsured motorist provision will pay damages if an uninsured motorist or a hit-and-run driver injures you and/or your passenger(s). You cannot buy more coverage against an uninsured driver than you carry yourself in liability. For example, if you carry $25,000 coverage per person and $50,000 per accident, you can buy only up to those amounts of coverage against an uninsured driver. For a nominal additional amount, you can also carry protection against inadequate insurance coverage by another driver who injures you or damages your property in an automobile accident. This provision means that your policy will pay for injuries or damage that his or her policy does not. |
| What is Collision and Comprehensive Coverage? |
| Collision insurance reimburses you for repair costs resulting from a collision that has been deemed to be your fault. Collision insurance is usually the most expensive part of your policy. Comprehensive coverage is for damage due to fire, storm, vandalism, or theft. If a lender holds a lien on your car, the lender will probably require you to pay for both collision and comprehensive insurance. To lower the cost of this kind of insurance, you may choose a $500 to $1,000 deductible, instead of the usual $100 to $250. Although this increases your out-of-pocket expenses in the event of an accident, it may cut the cost of your premiums substantially. |
| What is Personal Injury Protection? |
| Personal injury insurance will pay your medical expenses in the event of an automobile accident, regardless of who was at fault. By purchasing this protection, you agree not to sue for any suffering or injury you may sustain. Whether or not your state requires certain types of auto insurance, it may be a good idea to purchase multiple types to ensure that you are covered for many possible situations. In the event of a traffic collision, you don’t want to be left with bills that you cannot pay. |
| What is Term Life Insurance? |
| Term life insurance is the most basic and usually the most affordable. Policies can be purchased for a specified period of time. If you die within the time period defined in your policy, the insurance company will pay your beneficiaries the face value of your policy. Policies can usually be bought for one- to 30-year time spans. Annual renewable term insurance usually can be renewed every year without proof of insurability, but the premium may increase with each renewal. Term insurance is useful if you can afford only a low-cost option or you need life insurance only for a certain amount of time (such as until your children graduate from college). |
| What is Whole life insurance. ? |
| This type of permanent life insurance has a premium that stays the same throughout the life of the policy. Although the premiums may seem higher than the risk of death in the early years, these “overpayments” can accumulate cash value and are invested in the company’s general investment portfolio. You may be able to borrow funds from the cash value or surrender your policy for its face value if necessary. Access to cash values through borrowing or partial surrenders can reduce the policy's cash value and death benefit, increase the chance that the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured. Additional out-of-pocket payments may be needed if actual dividends or investment returns decrease, if you withdraw policy values, if you take out a loan, or if current charges increase. Guarantees are based on the claims-paying ability of the issuing company. |
| What is Property and Casualty Insurance? |
| Property-casualty insurance is specifically designed to help protect your possessions from theft or destruction and your assets from being depleted through disaster or litigation claims brought against you. The property side of a policy insures physical items, such as homes, commercial buildings, motor vehicles, and personal possessions or business inventory. Types of property insurance include homeowners insurance, fire insurance, flood or earthquake insurance, and automobile insurance. These insurance contracts may have an “open perils” or a “named perils” clause. The open perils clause covers losses for reasons that are not specifically excluded in the policy. Typical exclusions are earthquakes, floods, and acts of terrorism or war. A named perils clause requires the actual cause of loss to be listed in the policy, such as fire, lightning, explosion, and theft. Casualty insurance, or liability insurance, covers you for losses that you may cause to another individual or business. This is called “third-party” coverage. For example, if you have liability insurance on your car and another party is injured in a collision caused by you, your liability insurance will take care of the other person’s medical and repair costs. In addition, if someone sues you because of harm you may have caused to him or to his possessions, your casualty insurance may cover the cost. Both individuals and businesses can purchase property-casualty insurance. Personal policies include homeowners insurance, renters insurance, and automobile insurance, whereas commercial polices are written specifically for businesses and other organizations and may include commercial general liability, workers’ compensation, and commercial property insurance. If you are worried about protecting your possessions from damage and your assets from being diminished due to liability costs, then you may want to consider the types of property-casualty insurance that are appropriate for you. When selecting an insurance policy, make sure to examine all your options, as well as the positives and negatives of each type. |
Don Renstrom:
706-868-1298
don@rhodesfs.com
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