Liability: If you are deemed at fault in a car accident, liability coverage will pay for repairs, medical costs for injuries suffered by others in the vehicle, plus other expenses related to the accident such as legal fees. Your liability limits are set at the time you purchase your policy. There are two parts to liability coverage: Bodily injury liability and property damage liability. The limits are the maximum amount the policy will pay out; anything above that would come out of your pocket unless you have other insurance.
Collision: If you hit another vehicle or an object (like a guardrail), your collision coverage will pay for damages or repairs to your vehicle after you pay a deductible (up-front amount). In other words, if you have collision coverage with a $500 deductible and you suffer damage that costs $1,500, your collision coverage will pay $1000 after you pay the first $500.
Comprehensive: Comprehensive coverage pays for losses to your vehicle if it suffers damage from something other than an accident. For example, if a tree falls on your car or you hit a deer while driving, some portion of that loss will be covered if you have comprehensive coverage. Like collision, comprehensive has a deductible attached to it.
Medical Expenses: This coverage pays for injuries that you, a family member or anyone else riding your vehicle may suffer in an auto accident, regardless of who is at fault. It also pays for injuries you or your family members may incur while riding in other vehicles.
Uninsured/Underinsured Motorist: This coverage pays for injuries and property damage you suffer in an accident when the driver at fault either is uninsured or does not have enough insurance to cover your injuries and damage. It will also cover you in the event that a hit-and-run driver flees the scene and you cannot file a claim against that driver’s insurance company.
Rental Reimbursement: If your car is in the shop for several days and you need a vehicle, this coverage will provide that for you for a nominal premium.
Your vehicle just might be the most expensive possession you have other than your home. However, your auto insurance won't necessarily be costly. While rates vary from state to state and take into account a variety of factors, car insurance is usually fairly affordable. The factors that affect your costs include whether your car is new or used, the overall safety rating of the car, your driving record, your age and gender, and even your ZIP code, as certain areas tend to have a higher occurrence of accidents and claims than others.
The discounts you may qualify for include:
Good student discount: May apply if the young driver in your family has good grades.
Good driver discount: May apply if you’ve been accident-free for a period of time.
Multi-car discount: May apply if you insure more than one of your vehicles with the same company.
Multi-policy discount: May apply when you insure both your home and car with the same company.
Business insurance coverage for a commercial operation can include the following and more:
General liability insurance: Covers third party liability claims for injuries to other people.
Professional liability and malpractice insurance: Covers professionals against loss due to negligent professional duty, wrongful acts, and advice and services that lead to another person’s loss or injury.
Product liability insurance: Covers against faulty products and damage, illness, injury or death that may occur from using a faulty product.
Property insurance: Covers loss and damage to your commercial business property due to fires, storms and other causes.
Commercial vehicle insurance: Covers commercial vehicles and drivers for collision, liability, property damage, personal injury and "comprehensive" (now known as "other than collision").
Workers compensation: Covers your employees if they become ill or injured while working on the job.
Loss of income: Covers your business expenses such as rent and employee wages if you can’t operate your business.
Specialty coverage: Insurance that covers various specific business risks, such as those of andlords, farmers, and commercial operations that put on one-day events, such as seminars or concerts.
Broadly speaking, insurance covers you for potential loss resulting from risks such as burglary or theft, severe storms, fire and also your personal liability. The specific risks you may face as a home owner could include floods and earthquakes, which you must cover with separate policies, as these disasters are not included in home insurance.
Your home liability coverage protects you in the event that someone is injured on your premises or you are responsible for damage to someone else’s property. You homeowners insurance can even protect you against injury you cause to another person off-premises under certain circumstances. Note that liability insurance will not cover acts of violence or intentional damage.
Your liability insurance would also typically provide coverage if:
Your child throws a baseball through the neighbor’s window.
Your dog bites a visitor to your home.
A visitor is injured on your backyard swing set or trampoline, or by falling on your icy sidewalk.
A dinner guest gets food poisoning and is hospitalized.
If someone files a liability claim against you, your insurance can pay for property repairs, medical or funeral costs or even a lawsuit if the injured party chooses to launch a legal process.
When evaluating the amount of liability coverage that makes the most sense for you, be sure to fully discuss your limits and deductibles with your agent. Take time to understand your risks, and determine whether you will be well covered in various circumstances. In the event of a disaster, the costs of recovering can devastate household finances. Quality home insurance can make a difficult situation bearable and help you get your life back on track.
A personal umbrella insurance policy provides additional protection by increasing coverage for liability in two ways:
Increases the dollar limit of liability coverage for primary policies.
Example: Assume the coverage limit on the liability portion of your auto insurance totals $300,000. If you purchase an umbrella policy of $1 million, and you cause an accident that exceeds your the $300,000 limit on your auto policy, your umbrella insurance can cover the remainder, up to $1 million dollars (a total of $1.3 million total liability coverage, in this case)
Covers claims excluded by primary policies.
Example: Typical liability policies may not cover damage claims resulting from false arrest, libel, slander, or defamation of character. If you are held liable for damages caused by these types of claims, the umbrella policy can help you cover costs.
The $300,000 liability limit in the prior examples may seem like a lot of coverage in the abstract, but can easily be exceeded in serious accidents.