| Frequently Asked
Questions
- 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).
- 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).
- What is collision insurance?
Coverage for the loss resulting from
the striking of another object by a moving vehicle.
- 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has been replaced by personal injury protection (PIP); in other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.
- 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.
- 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.
- Does my homeowner policy cover my boat?
No, a separate policy needs to be written
to cover your boat, motor and miscellaneous equipment.
- Does my insurance policy cover flood?
No, flood coverage is a separate policy.
- 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.
- 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.)
[top] |
