All Of Your Questions Answered

Wednesday, October 25, 2017

Everything You Need To Know About Insurance


You probably have a lot of questions about insurance products .

There are thousands of insurance companies in the United States.

There millions of people every year who need insurance.

You can attain insurance for almost anything these days.

You can purchase insurance for the clothes you wear and the records in your closet.

But let’s talk about the bigger insurance policies such as home, life, car, and motorcycle.

You can purchase the highest quality insurance for thousands of dollars.

You can buy the minimum required insurance and stay within a tight budget.

Either way, when you travel through life there is one thing you can’t live without: insurance.

What is insurance? How does insurance work? Who sells insurance?

These are some of the questions you may have.

Let’s take a look at simplifying it for you.


Frequently Asked Questions


Below are a few frequently asked questions regarding insurance.

These are basic insurance topics that every consumer should know.

Why do you need to attain cheap car insurance? How much is the average cheap homeowners insurance policy?

It’s hard to ask about life insurance.  No one wants to think about that part of our lives.

A quality cheap life insurance policy is worth discussing.

This type of insurance will save your family money. You don’t realize how much you need life insurance until after it is too late.



What is insurance?

Insurance is a product that is sold to a consumer protecting them and their assets. Insurance is sold all over the world and millions of people use it.

In the United States it is the law to carry car insurance when driving.

There are laws pertaining to homeowners insurance and cheap motorcycle insurance as well.

Every state is different and laws can change from year to year. It is important to keep up to date on the laws regarding insurance.


The dictionary definition of insurance:

  1. A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
  2. A thing providing protection against a possible eventuality.

What is an Agent?

A person who sells insurance policies and is licensed to do so is called an agent.  An agent can help you find the right type of insurance.

They can help you attain discounts which could save you money.

Unlike an agent, an adjuster is a person who evaluates claims for the insurance company and determines the amount of loss on those claims.

This person works for the insurance company and not the consumer. An agent is not to be confused with an actuary. 

An actuary is a person who assess risk ratios for the insurance company.

Another name for an insurance agency is a carrier.

The carrier provides the service that the consumer needs in order to protect an asset.



What is Liability Coverage and why do I need it?


 Liability Coverage is coverage that pays the other party involved in an accident.

This is only the case if you are considered at fault of any injuries or damages caused by an accident.

You need this coverage when you drive a car so that the other person involved in an accident is covered for any damages as well as medical.

Liability coverage is needed in a homeowners policy to protect the homeowner from the same liability they face if someone is injured inside the home.

Most of the time liability is the only type of insurance a consumer will purchase. They may not know that liability does not cover their own car, motorcycle or property.

If you want to properly cover your own vehicle and assets when involved in an accident, you will need to purchase Collision Coverage.

Collision Coverage will cover your own cars damages. Depending on what insurance you have, you could cover your own medical expenses as well.

Sometimes you need to have separate medical coverage for car accidents. Liability will not cover any of your medical bills, but will cover the other party.


What are the types of car insurance policies available?


Here are a list of car insurance policies you can purchase through an agent:

  • Collision Coverage will cover your own damages in an accident
  • Liability Coverage will cover the other parties damages in an accident.
  • Comprehensive Coverage will cover theft of your vehicle and other damages not incurred in an accident.
  • Uninsured Motorist coverage will keep you covered even when the other party is not. When you are in an accident with someone who is not carrying the proper coverage, you could get stuck footing the bills. You can keep this from happening by purchasing Uninsured Motorist coverage.
  • Towing coverage will cover or reimburse you for a tow if you get stranded.
  • Roadside Assistance is a great insurance coverage that usually covers 24 hour assistance.
  • Medical Payments coverage will help pay for any added medical bills incurred in an accident.


What are the types of homeowners insurance policies available?


Homeowners insurance policies usually covers the following:

  • Damage to your home, including permanent structures on your property. Unless your policy specifically excludes the cause of the damage
  • Damage to personal property. The items in your home that are not attached to the dwelling, due to causes outlined in your policy
  • Liability coverage for legal matters or accidents that occur on your property
  • Loss of use allows you to maintain your lifestyle at another residence while your home is being repaired without incurring additional costs
  • Limited coverage for items such as stolen jewelry. The amount of coverage varies depending upon state of residence. You always have the option to increase this coverage.
  • Additional coverage is available for more valuable items (jewelry, fur, silverware, etc.).

What are the laws regarding having a homeowners policy?


Laws regarding this policy varies by state.  Most of the time a bank will require you to attain homeowners insurance.

If you are taking out a loan for a home, you will need to carry at least the minimum amount of homeowners insurance.

Homeowners insurance covers four basic types of insurance: structure, personal belongings, liability, and additional living expenses.

The location of your home, the construction type, roof slope and many other features contribute to how much your homeowners insurance will be.

You can add more to your policy such as flood insurance and fire insurance.  It is better to be over insured when it comes to the value of your home.

After all, owning a home is part of the American dream!


How much insurance should I purchase for my motorcycle?


Most of the time a state will require you to have just as much motorcycle insurance as you do car insurance. In California the state minimum is:

  • Bodily Injury Liability limits: $30,000 per occurrence / $15,000 per person
  • Property Damage Liability Limits: $5,000 per occurrence

This is the case in most states.

You can buy the same types of insurance for your bike as you can for your car. You may want to consider Collision and Comprehensive coverage.

Purchasing extra insurance for your gear may be a good idea because helmets and protective wear can be expensive.

Terms On Insurance

You can never have too much information about a large purchase such as insurance.

If you are purchasing car, life, home, or motorcycle insurance and you want to bundle these together, you could end up saving quite a bit of money.

Here are some terms and facts that will help you when purchasing insurance.

  • Anti Theft Device: Any deterrent that prevents theft of property such as a car alarm. An Anti-theft device could save you money on your insurance. If you have an alarm on your car or your home, you could save. The insurance company looks at an anti theft device as one more reason your property will not get stolen.
  • Auto Death and Dismemberment Coverage: An additional coverage that pays for death or loss of limbs due to an auto accident. This is an added insurance that will cover funeral expenses and medical coverage for someone severely injured. If you own a motorcycle, you may want to consider the serious risks involved and attain this type of insurance.
  • Broker: A person who compares and finds insurance policies for a consumer. They do not represent a particular insurance company but rather the consumer. This is the person that works for you! They can help you save with discounts and can change your policy at any time. The broker is someone who gets paid by matching up the consumer with a policy.
  • Bundling: Coverage that includes multiple policies such as home and auto which when combined can save the consumer premium costs. Bundling is a great idea and is encouraged. Insurance companies reward loyalty. Bundling with one company could save you hundreds each year.
  • Citation: A violation of either moving or non-moving laws in which an official serves a ticket to the person at fault. Having tickets and citations on your driving record will hurt your bank account when you are looking to purchase insurance. If you have had a DUI you are considered a “high-risk” driver. Make sure you attain the proper SR-22 forms so you can get back on track.

More Terms…


  • Compulsory Auto Insurance: The state required basic minimum liability coverage which is legally required in most states. Severe penalties can be given if you are caught driving without insurance. You must have car insurance when driving. However there are still thousands of people who do not carry the proper coverage. When you are hit by one of these drivers, you will want to have Uninsured Motorist coverage in your back pocket.
  • Credit Risk: A person or entity which has a higher chance of default on policy premiums. Some insurance companies compare credit risk to overall responsibility of the driver and those with higher risk are generally charged higher premiums. Checking credit is just one way insurance companies find our what type of a risk you are as a driver or owner. Having good credit will save you money on your premium.

More Facts…


  • Death Benefit: Payments made to a beneficiary due to the death of a person in a covered accident. You also have a death beneficiary when you purchase life insurance.  A death beneficiary could receive thousands or even millions of dollars to help pay for funeral expenses, debt and much more.
  • Deductible: A portion of a claim that is paid by the insured which is a set amount agreed upon during the purchase of the policy. Usually the higher the deductible, the lower the premium. If you are looking to save money month to month, raise your deductible. This will lower your premium. Having a higher deductible could cause a higher payment if a claim is filed.
  • Full Coverage: Covers liability, collision and comprehensive on a specific vehicle. Most financed vehicles are required to carry full coverage. It is always a good idea to be fully covered. Whether it is a motorcycle or your very first home, you deserve to have quality insurance.  You may be surprised at how affordable full coverage can be.


Wrap Up

Let’s break down the essence of insurance and how it could benefit you.

Car Insurance:

  • Attain at leas the minimum state requirement.
  • Make sure you have a clean driving record.
  • Ask your agent about discounts you could receive.
  • Always carry the proper registration and insurance in your vehicle.

Motorcycle Insurance:

  • Attain the state minimum insurance required. You may want more insurance. Try Collision and Comprehensive Coverage.
  • Do not drink and ride. You put yourself at risk when you ride a motorcycle. Adding alcohol will just make things worse.
  • You can cover your gear.
  • Take a motorcycle safety course to save money on your insurance.

Life Insurance:

  • Talk to an agent to figure out how much life insurance you may need.
  • Have a plan of action and a beneficiary that you trust.
  • There are two types of life insurance: term and whole life.

Homeowners Insurance:

  • A bank will require you to attain the proper amount of homeowners insurance.
  • Liability coverage and Property Damage coverage make up the bulk of a homeowners policy.
  • You can purchase fire and flood insurance as add-ons.

There are a few ways to contact an insurance agency.

You can go through a broker who can help match you up with the right policy and agency that fits your budget. You can do a little shopping online and compare prices.

Here are tools to help you search for insurance:

  1. You have rights as a consumer
  2. Ask for discounts
  3. Know the laws of your state in regards to how much insurance you may need
  4. Do not sign anything you are not 100% comfortable with
  5. Higher prices does not mean better insurance
  6. Make sure that you attain more than just the minimum amount of insurance
  7. Making yearly payments will cut your bill
  8. A broker is working for the consumer
  9. Insurance agencies do their business based on statistics
  10. When you call a broker, have your paperwork handy and a list of questions



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