Understanding Insurance

Whether you are insuring your home, car, health, or evn your life, it is important to understand the different types of coverage's that apply and that are needed. Insurance policies are generally different from state to state and from company to company. To put it simply, it is not one size fits all! It is important to first have a general understanding of your state laws regarding insurance coverage ( Example: At Fault of Not At Fault States). The best resource for this is your states "Department of Insurance" (Example: Ohio, Ohio Department of Insurance). It is important to go straight to the source to get accurate information regarding state requirements. Also, most agents that have been in the industry long enough have a firm understanding of the requirements.

With Home Insurance and Auto Insurance there are a few types of coverages that are fairly standard.

1. Liability Insurance- Insures you if you are at-fault in a car accident. With homeowners it cover accidents that may occur on your property. If a tree falls on a friends vehicle while parked at your house, your liability coverage would cover that peril.

2. Replacement Costs and Actual Cash Value- Replacement Cost
Coverage covers your house if you should sustain a physical loss ( Example Wind, Hail, Fire etc.). Actual Cash Value (ACV) is usually used for auto insurance. It will provide coverage with depreciation taken into account if a physical loss should occur.

3. Medical Coverage- This coverage is somewhat self explanatory. It covers medical expenses in most situations, depending on the cause of loss (peril).

With Life, Cancer, Disability, Health Insurance there are a few basic types of coverages that are also fairly standard.

1. Catastrophic Coverage- Catastrophic coverage is generally found in health insurance policies. This covers up to $1,000,000/occurrence (generally) and is used if a named insured needs to go into the hospital for any length of time up to policy limits.

2. Face Amount/Coverage amount- This terminology is seen on Life Insurance policies. It indicates the benefit that would be paid out upon the name insured's death. This is one of the very few insurances where no deductible applies!

No Matter what type of insurance you are looking for, it is very important that you familiarize yourself with your states laws and also the terminology that is on your actual policy(s). Do not purchase a policy if you do not understand exactly what it does for you! Also, never be hesitant to call a local insurance agent to ASK QUESTIONS!!!