Personal Insurance

Liability Coverage

There are two types of liability coverage - coverage for Bodily Injury and coverage for Personal Property. Most states require you to carry a minimum amount of liability coverage, or post a bond, to register your vehicle or obtain a driver's license.If you’re legally responsible, or “liable” for damages, Liability coverage helps pay for them.
Legally required for drivers in almost every state, Liability coverage includes Bodily Injury and Property Damage coverage, which pay for someone’s medical expenses, personal injuries, and property damage if you’re at-fault.

Uninsured/Underinsured Motorist Coverage

These days, about 1 in 8 driversfooter notefooter note* are completely uninsured…and about 30% of drivers don’t have enough insurance. That’s why it’s important to consider Uninsured/Underinsured Motorist Coverage. It provides Liability (Bodily Injury and Property Damage) coverage for you, if an uninsured or underinsured motorist is at fault in an accident.

Medical Payments

If you or anyone in your car is ever hurt in an accident, Medical Coverage can pay for their medical expenses.

Collision Coverage

If you hit something like another vehicle or a fixed object like a guard rail, lamp post, or telephone pole, Collision Coverage helps pay for the damages to your car.

Comprehensive Coverage

If your car is broken into, or dented in a hail storm, Comprehensive Coverage would help cover the losses to your car. Sometimes called “Other Than Collision” or “Fire and Theft,” Comprehensive covers losses from things other than an accident, like vandalism, riots, floods, hail, fire, animal collisions, and theft.

Whether you’re buying your first homeowners insurance policy or wanting to update your current policy, knowing the basics of home insurance coverage is key. Before you can make an informed decision, you should be familiar with the different types of home insurance available to you.

A standard homeowners insurance policy includes the following coverages:

• Dwelling coverage is the basis for all homeowners insurance policies. It provides protection for the structure of your home including the floors, walls, built-in appliances and ceilings, as well as any attached structures. It also covers a variety of perils including fire, hail, theft and vandalism – and can help you rebuild your home in the event of a total loss (up to your policy limit).
• Contents coverage protects items including furniture and clothing in your home. If a covered incident were to occur, you would receive funds for the value of these items, as defined by your policy. Personal liability pays for damages that occur from certain accidents.
• Personal liability consists of bodily injury damage coverage, which covers costs if a guest sustains an injury in your home or elsewhere, and property damage coverage, which kicks in if your property is damaged as a result of a covered accident.

Umbrella insurance is meant to help protect you from large and potentially devastating liability claims or judgments. Personal umbrella coverage comes into play when your underlying liability limits (such as from a homeowners or auto insurance policy) have been reached.

PERSONAL UMBRELLA INSURANCE POLICY IN ACTION

To better understand how a personal umbrella policy works, here's an example: If you're at fault in a car accident that injures another driver, your regular automobile insurance may cover the other driver up to the limit you selected, say $250,000. But what happens if that limit is not enough to cover the other driver's resulting medical bills?

If the other driver's injuries are severe, you may be legally responsible for damages beyond the $250,000 your car insurance policy covers. And, if he sues you, your personal assets could be at stake. Imagine if that injured driver were a surgeon or another highly paid professional. What if the accident you caused resulted in an injury that kept him from doing his job for six months? Suddenly, he's suing you for $1 million to cover the six months he's away from work.

Your automobile policy's liability coverage may pay for up to $250,000, but where would you come up with the remaining $750,000? A personal umbrella policy can help cover the additional costs when your standard insurance policy isn't enough. An umbrella policy could provide the additional coverage you need so that you don't get stuck trying to pay the remaining balance yourself. This extra policy could help protect your bank account, home and other personal property.

In most cases, personal umbrella policies are available in million-dollar increments, from $1 to $5 million. While an umbrella policy is not required, it may offer increased protection in the unfortunate event of an accident.

HO-6 is home insurance for owners of co-ops or condominiums. It provides personal property coverage, liability coverage and specific coverage of improvements to the owner's unit. Typically the owner's condo or co-op association provides insurance that covers the outside of the dwelling (structure).

Condo insurance is important to have though since your association's policy will not cover your belongings or provide you with personal liability coverage if someone is harmed inside of your residence.

An HO-6 policy will cover interior damage to your unit, improvements, additions and alterations you've made and your personal property. Additional living expenses, if your residence is not able to be lived in due to a covered peril, is usually also included. The condo association's policy typically covers the outside building structure and commons areas, such as hallways.

HO-6 insurance is designed to coordinate coverage with your condominium or cooperative's master policy.

Consider extra coverage, for valuables, such as jewelry, fine art or fancy computer equipment. Depending on where you live, you might also need additional coverage for earthquakes, flooding or windstorms. Discuss with your insurance agent or insurance company your needs to make sure you purchase the right amount of coverage.

Standard coverage doesn't vary much from one company to the next for an HO-6 policy, but rates and customer service do, so it's important to shop around for home insurance quotes from at least three different companies.

To understand what flood insurance covers, you need to know three things first:

1. Standard homeowners insurance doesn’t cover flood damage at all. It’ll cover some damage from rain, but if your home is filled with water as a result of rising bodies of lakes, rivers, streams, and oceans, it won’t cover you.
2. The most common flood insurance is offered through the federally regulated program known as the National Flood Insurance Program (NFIP). It has two policies:
• One that covers your actual home (building property) up to $250,000
• One that covers your personal property up to $100,000

You can buy one or both.

Related: What happens if you need more than $250,000 worth of coverage? You need to get excess flood insurance, which is only offered by private companies, not the Feds.

3. You might have to buy it. If you’re taking out a mortgage on a property that’s in a high-risk zone (also called a Special Hazard Flood Area), your lender will require you to buy a policy in order to get the loan. If you just want to buy policy, you have to make sure your community participates in the national flood program. Flooding affects every state, so you’re probably eligible.

Earthquake insurance covers damages caused by an earthquake, a sudden and violent shaking of the ground resulting from movement of the earth’s crust. More specifically, earthquake insurance covers damages to your house, personal belongings inside your home, and Additional Living Expenses (ALE) or loss of use, which are the costs to live somewhere else while a policyholder’s area is evacuated or their home is repaired. Insurance coverage for earthquakes is generally not included in standard homeowners or renters insurance policies. It can be added to an existing homeowners insurance policy as an endorsement or purchased as a separate policy.

Roughly 200,000 earthquakes occur each year, the vast majority happening in 42 states considered at risk of earthquakes, according to the U.S. Geological Survey. Most earthquakes are small and unnoticeable, and cause little or no damage, but others can be catastrophic. Some states and areas within them are at a higher risk than others, so earthquake insurance rates and need can vary greatly.

What Earthquake Insurance Covers

Earthquake Insurance pays for reasonable costs that you sustain from the loss of your residence in the event of quake damage. There are three major components: your home (referred to as a dwelling in policies), personal property, and additional living expenses (ALE).

For example, if your home is subject to an earthquake and sustains cracks in the walls, ceiling, foundation or other damages, those would be covered under the dwelling portion of the coverage. There is a deductible and limit to this portion of the coverage. Another portion of earthquake insurance covers your personal belongings inside the impacted home. Personal property claims usually include protection for furniture, electronics, and other belongings. Almost anything can fall within this category, although there is a deductible and limit to this portion of the coverage that is separate from the deductible and limit for the dwelling itself. ALE and loss of use can cover a variety of things while a home is repaired within a reasonable timeframe or until a policyholder finds a new home. You might able to have your insurance company reimburse you or pay for a temporary rental home, apartment, hotel room, restaurant meals, or a temporary telephone line. Moving, storage, furniture rental, and laundry can also be covered.

Earthquake Insurance does not cover a number of things consumers might assume it does. For example, damages resulting from a fire caused by an earthquake would fall under a policyholder’s homeowners insurance, not their earthquake insurance. It also does not cover damage to vehicles, fences, pools and things like china and crystal. Damage to your land, such as landscaping or a sinkhole, are also are usually not covered but some policies include “engineering cost” options which these would fall under.

Comprehensive Liability Insurance

Comprehensive liability insurance, often referred to as comprehensive general liability insurance, is a form of business insurance that protects businesses against most types of liability claims. It has long been one of the most widely used business insurance products.

Basics

Comprehensive general liability is one of two common business liability insurance products. The other is professional liability, which covers professional service providers. According to Business Insurance Now, it "protects you in the event of claims of bodily injury or physical injury or damage to property".

Coverage

Property damage, including loss of use, damage or destruction, or economic hindrance are part of most comprehensive liability plans. Details on damage benefits vary by jurisdiction and insurance policy. Physical or bodily injury caused at your business location or while you are conducting business is the other major component of coverage.

Misconceptions

The phrase "bodily injury" is the most commonly misconstrued aspect of comprehensive general liability insurance. Though initially intended to cover a business for bodily damage, sickness, disease or death, precedence exists for extension into mental illness claims. Some policies specifically reference "mental anguish." When they do not, claimants have occasionally attempted to connect emotional or mental distress to associated physical effects.

Jewelry Insurance

Look up the definition of insurance and you'll find words like "reimbursement" and "compensation." That makes sense, since most insurance policies rectify losses by cutting you a check.

In the case of jewelry insurance, a cash payout isn't always your best option.

Read on for a comparison of how jewelry insurance works for a replacement policy versus a traditional reimbursement.

How Reimbursement Jewelry Insurance Works

Let's start with explaining the traditional insurance model. This structure is typical for jewelry coverage under most homeowners' insurance policies. At a high level, how jewelry insurance works is simple:

1. Purchase coverage.
2. File a claim.
3. Settle the claim.
4. Get your check.

Obviously there's a bit more detail involved than that, but the big question is how much that check will be written for.

Actual Cash Value vs. Replacement Cost

There are two main ways insurance companies can choose to value your compensation - actual cash value (ACV) and replacement cost.

According to the Insurance Information Institute, actual cash value "pays damages equal to the replacement value of damaged property minus depreciation." Alternatively, replacement cost "pays the dollar amount needed to replace damaged personal property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy."

Generally speaking, you'll receive a larger payout at the time of a claim if your insurance is based on replacement cost, since most things depreciate.

Jewelry is a unique case. It doesn't necessarily depreciate the same way a house or car does. That being said, normal wear and tear can affect the fair market value of jewelry, which is the baseline used to determine claims reimbursement in some cases.

The bottom line is this: With replacement cost coverage, there is no guesswork. You will get the amount required to replace what you insured, at the time you insured it. ACV has many more grey areas and may leave you with extra out-of-pocket expenses after a claim.

In either case, however, you're left to deal not only with the emotional toll of losing a sentimental symbol, but also the stress of trying to get an equal replacement for your original piece - which may or may not be easy depending on how well your provider understands the intricacies of jewelry.

Flood Insurance

What is 'Watercraft Insurance'

Insurance policies that provide coverage for boats and personal watercraft. Watercraft insurance, also known as boat and personal watercraft insurance, often include towing and wreckage removal, as well as fuel spill indemnification. This type of insurance may be purchased for sailboats, house boats, and pontoon boats, as well as other watercraft up to a certain size and value.

BREAKING DOWN 'Watercraft Insurance'

The coverage provided by watercraft insurance varies according to the type of watercraft being insured. This is because different types of watercrafts carry different risks. For example, a sailboat and a pontoon boat are characteristically different types of watercraft. Watercraft insurance does not provide liability coverage for injuries caused by the operation of the boat or watercraft.

In some cases, an individual’s homeowners’ policy may provide coverage for personal watercraft. If the watercraft is too expensive it may exceed the limits of the homeowners’ policy, but may fall under the limits of a watercraft insurance policy. These policies will still limit coverage to certain types of vehicles, often based on the length of the boat and the boat’s value.

Watercraft insurance policies may limit the areas that the boat or watercraft can be operated in while maintaining coverage. The geographic areas permitted are outlined in the policy language, but often include inland waterways, rivers, and lakes, as well as ocean waters within a certain number of miles from shore.

The amount of damage to a watercraft that is covered under the policy is also dependent on how the policy treats depreciation. In some cases, the boat or watercraft will have its value depreciated according to a set schedule, and the insurance policy will only pay up to the value that the boat is still worth. The policyholder may purchase additional coverage that provides for a replacement boat if the boat is within a certain number of years old.

Motorcycle Insurance

Standard motorcycle insurance coverages

Bodily injury & property damage liability (BI/PD)

Pays for damages to other vehicles, property (fences, signs, etc.) and injuries to other drivers/motorcyclists and their passengers. This will also pay for legal expenses if you’re sued.

Uninsured/underinsured motorist (UM/UIM)

It’s a common question: what happens if someone who doesn’t have insurance hits you? Sometimes, they’ll pay out of pocket for damages. But if they can’t afford it, you may have to pay. This coverage protects you from that and pays for damages to your motorcycle, your injuries/medical bills and any lost wages if you can’t work.

Comprehensive & collision

Pays to repair or replace your motorcycle if it’s stolen or damaged. Instead of choosing a dollar amount, you pick a deductible (the portion you pay). So, if you have a claim for $2,000 worth of damage and you have a $500 deductible, you pay $500 out of pocket (we’ll pay the rest).

Medical payments

Pays for your medical bills (or your passengers’) if you’re in an accident, regardless of who is at fault. You can pick a range of coverage limits.

Extra coverages you can add

Total loss coverage for a brand new bike

Available if your bike is no more than one model year old on a new policy, and two model years old during a renewal of a TLC policy. If your bike is totaled, we’ll give you the full manufacturer’s suggested retail price for a brand new bike, minus the deductible on your policy.

Let’s say that you bought a motorcycle for $15,000, and it’s now only worth $10,000. If it’s totaled, and the latest model costs $15,000+, we’ll give you $15,000+. That’s a real $5,000 difference. If your motorcycle is no longer eligible for total loss coverage at renewal, your policy will still cover the actual cash value for what it’s currently worth.

Roadside assistance

If you get stuck or your bike is disabled, we’ll tow it to the nearest repair shop for free. You just have to be within 100 feet of the road. You can also add trip interruption to pay for food and lodging expenses up to $500 if you’re away from home (you must have roadside assistance first then add trip interruption).