Auto Insurance Definition:
A policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Instead of paying out of pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage.
Auto coverage explanations:
- Bodily Injury Liability
This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savings.
- Medical Payments or Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.
- Property Damage Liability
This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you’ll also be reimbursed for the deductible.
This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium.Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.
- Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.Stacking Uninsured/Underinsured CoverageIf you have uninsured/underinsured coverage on multiple cars, you may have the option of stacking these policies. This would increase your coverage per accident bymultiplying your uninsured/underinsured limits by the number of cars you have under your insurance plan.While this option will increase the price of your premium, it does greatly increase your coverage limits.
- Limited or Full Tort
If you are purchasing auto insurance in the state of Pennsylvania you should know that PA is a no fault state. This means your insurance company will help pay for medical expenses, for you and your passengers, regardless of who is at fault for the accident. The main goal of no-fault insurance is to reduce the number of civil suits resulting from car accidents. When you purchase your insurance, you have two tort options:- Option 1: Limited right to sue.
– Option 2: Full tort right to sue.The limited tort option allows you to sue for all medical costs resulting from a car accident. This option comes with a cheaper premium, but will limit your right to sue for pain and suffering. Essentially, you can only sue for your medical costs unless the injury is very severe.The full tort option gives you an unrestricted right to sue for BOTH:- Medical costs.
– Pain and suffering.
This option will raise the price of your premium.
Pennsylvania Liability Requirements
While Pennsylvania is a no-fault state, you are still required to purchase liability insurance.
Liability coverage helps cover the costs of any victims’ injuries and damages that result from a car accident that you caused.
The following minimums apply:
- Bodily Injury Liability:
- $15,000 per person, per accident.
- $30,000 total per accident.
- Property Damage: $5,000 per accident.
Some car insurance carriers offer a single limit of $35,000; this covers the entire liability requirement.
PA Proof of Insurance Requirements:
PA requires you to have proof of insurance with you while driving.
Proofs of insurance must be shown during traffic stops and may be requested when you register your vehicle.
Without insurance you may be subjected to a fine, suspension of your license, or impoundment of your car.
If your car’s registration is suspended, NOBODY can legally drive it.
Homeowners Insurance Policy
Home insurance, also commonly called hazard insurance or homeowner’s insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.
Types of Homeowners Policies
- Basic homeowners policy.
- Covers your house and possessions against 10 different perils.
- HO-1 policies have been discontinued in most states.
- Broad homeowners policy.
- Covers house and contents against 16 perils, which are named in the policy.
- Special form homeowners policy.
- Covers the structure for all perils except those specifically excluded by the policy.
- Contents are covered against perils named in the policy.
- Renters insurance policy.
- Covers contents for 16 named perils and includes liability coverage. It does not insure the dwelling itself.
- Also includes liability coverage for the renter.
- Premier homeowners policy, generally offered to newer, high-end homes that are well-maintained.
- Much like the HO-3 policy but contents are covered against all perils except those specifically excluded.
- According to the Insurance Information Institute, in some cases, depending the year of construction, the area where you live, your claims history, and other rating factors, you can buy an HO-5 for about the same cost as a traditional HO-3.
- Insurance for owners of co-ops or condominiums.
- Provides personal property coverage, liability coverage and specific coverage of improvements to the owner’s unit. Insurance provided by the owner’s association normally covers most of the actual structure
What is Covered in a Homeowners Policy?
- The structure of your house
This part of your policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home.Most standard policies also cover structures that are detached from your home such as a garage, tool shed or gazebo. Generally, these structures are covered for about 10% of the amount of insurance you have on the structure of your home. If you need more coverage, talk to your insurance agent about purchasing more insurance.
- Your personal belongings
Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50% to 70% of the amount of insurance you have on the structure of your home. So if you have $100,000 worth of insurance on the structure of your home, you would have between $50,000 to $70,000 worth of coverage for your belongings. The best way to determine if this is enough coverage is to conduct a home inventory.This part of your policy includes off-premises coverage. This means that your belongings are covered anywhere in the world, unless you have decided against off-premises coverage. Some companies limit the amount to 10% of the amount of insurance you have for your possessions. You have up to $500 of coverage for unauthorized use of your credit cards.Expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. Generally, you are covered for between $1,000 to $2,000 for all of your jewelry and furs. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for it’s appraised value. Coverage includes “accidental disappearance,” meaning coverage if you simply lose that item. And there is no deductible.Trees, plants and shrubs are also covered under standard homeowners insurance. Generally you are covered for 5% of the insurance on the house—up to about $500 per item. Perils covered are theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. They are not covered for damage by wind or disease.
- Liability protection
Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter or dog accidentally ruins your neighbor’s expensive rug, you are covered. However, if they destroy your rug, you are not covered.The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy. You are also covered not just in your home, but anywhere in the world.Liability limits generally start at about $100,000. However, experts recommend that you purchase at least $300,000 worth of protection. Some people feel more comfortable with even more coverage. You can purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits. Generally, umbrella policies cost between $200 to $350 for $1 million of additional liability protection.Your policy also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage. It does not, however, pay the medical bills for your family or your pet.
- Additional living expenses
This pays the additional costs of living away from home if you cannot live there due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other expenses, over and above your customary living expenses, incurred while your home is being rebuilt.Keep in mind that the ALE coverage in your homeowners policy has limits, usually a percentage of the amount of coverage you have on your home, and some policies include a time limitation. But the amount of ALE coverage is separate from the amount available to rebuild or repair your home. For example, suppose you have a policy that provides up to $150,000 in rebuilding costs and up to $15,000 (10 percent) for ALE and you use up the entire $15,000, your insurance company will still pay what it costs to rebuild your home up to the policy limit of $150,000.Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20 percent of the insurance on your house. You can increase this coverage, however, for an additional premium. Some companies sell a policy that provides an unlimited amount of loss-of-use coverage, but for a limited amount of time.If you rent out part of your house, ALE coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.
Personal Umbrella/Excess Liability Insurance:
This is a policy to help increase your liability exposure that sits, like an umbrella, over your home, auto and some of your rental or seasonal property’s liability insurances. These umbrella policies, allow you to increase the amount of liability, in excess, of those stated in your home, dwelling or auto policies. The policy can increase your liability in the amounts of one to three million dollars and has underlining limit requirements for your liability coverage in your home, auto or fire dwelling policies. Experts recommend protecting your personal assets by purchasing an umbrella policy.
Valuable Items Coverage:
Most standard insurance policies have limits on covering your personal valuable items that you may be fortunate enough to own. Buying additional coverage to protect the valuable items that you have from being damaged, stolen or lost is a good idea. These policies, or policy riders, cover things like wedding and engagement rings, coins, family heirlooms, papers, documents and artwork. Going through your personal assets with your insurance advisor is always a good idea.