Frequently Asked Questions

1. What does a homeowner's policy cover?
   A package policy for dwelling and contents risks combines fire and allied line coverage with comprehensive personal liability and theft insurance for homeowners and tenants. This policy carries an indivisible premium in that the premium is not separately stated or broken down for the various hazards insured against. There are different homeowners forms, varying in extent of coverage and cost from the broad cause of loss policy (HO2), to the special cause of loss policy (HO3), to the renter's policy (HO4).
   
   
2. What is comprehensive insurance?
   A type of physical damage protection for automobiles including theft but excluding loss by collision or upset (which may be added).
   
   
3. What is collision insurance?
   Coverage for the loss resulting from the striking of another object by a moving vehicle.
   
   
4. What is auto medical payments coverage?
   An optional coverage under an automobile liability policy which pays the medical expenses of the policyholder and any of the passengers injured by the insured automobile, irrespective of who was responsible for the accident. This was originally called "basic medical payments." In addition, it pays the medical expenses of the policyholder and members of the immediate family injured while passengers in any other automobile or when struck by an automobile. In some no-fault states, medical payments insurance has been replaced by personal injury protection (PIP); in other states, it may supplement no-fault insurance.
   
   
5. What is uninsured/underinsured motorists coverage?
   Under an auto policy, this is protection for the insured against bodily injury or property damage (in some states) caused by the negligence of an uninsured or underinsured motorist.
   
   
6. What does an umbrella liability policy cover?
   A form of liability insurance protecting policyholders for claims in excess of the limits of their primary automobile, general liability and workers compensation policies, and for some (few) claims excluded by their primary policies which are subject to a deductible, which may range from $250 for a personal umbrella to a minimum of $10,000 for a commercial umbrella.
   
   
7. Does my homeowner policy cover my boat?
   No, a separate policy needs to be written to cover your boat, motor and miscellaneous equipment.
   
   
8. Does my insurance policy cover flood?
   No, flood coverage is a separate policy.
   
   
9. What is bodily injury and property damage?
   Bodily injury:
   Injury, sickness or disease sustained by a person, including death at any time resulting therefrom.
   
   Property damage liability insurance:
   A form of "third-party" protection covering the insured's legal liability for damage to property of others caused by the insured's negligence.
   
   
10. How does my deductible work?
    In a policy providing a deductible clause, the deductible is the amount which must first be subtracted from the total damage incurred before determining the insurance company's liability. Of several types used, the straight deductible establishes the insurer's liability above the deductible but not below it; the franchise deductible establishes the insurer's liability for the entire amount of damage once the deductible amount is exceeded in a loss; and the disappearing deductible establishes the insurer's liability for an increasing proportion of the loss, as the total damage rises above the deductible, until the deductible finally "disappears." Then the insurer is liable for the entire amount. The deductible may be in the form of an amount of dollars, a percent of the loss, a percent of the value of the insured property, or a period of time, as in health insurance .
    (See Franchise Clause.)

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