What You Should Know About Your Insurance
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Automobile Insurance - Important Facts
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- When a vehicle suffers damage by a hit-and-run driver, the only way to cover that type of loss is by purchasing Collision coverage, which carries a deductible. Damage done by a hit-and-run driver is not considered an uninsured motorist claim.
- The State Legal Minimum limits of automobile liability in California are $15,000 bodily injury per person, $30,000 per accident, and $5,000 for property damage. These limits are so low, it is common that they are not sufficient to cover the damages that occur in an at-fault accident. The cost difference to purchase ten times these coverage limits is very reasonable. Still, many vehicle owners choose to carry these low limits. It is advisable to carry higher limits of liability to not only protect your assets, but to cover all the damages done in an at-fault accident. And drivers beware, many of the claims handled at Aslan Insurance Agency, Inc. involve uninsured and underinsured motorists.
If your car is worth more than $3,500, it is advisable that you purchase collision coverage, with uninsured/underinsured motorist deductible buy-back coverage, which reimburses you the amount of your deductible if you suffer property damage done by an uninsurered/underinsured motorist.
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Automobile Insurance - Definitions
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- Bodily Injury Liability (BI) - Pays when you are legally liable for injury or death caused by your vehicle. Legal fees, appeal bonds and court costs may also be included. Pays up to the first limit for each person and up to the second limit, maximum, for all persons injured or killed in any accident when you are legally liable. Some Auto policies can have a "Single" limit meaning Bodily Injury and Property Damage is combined in one "Single" limit.
- Property Damage Liability (PD) - Pays when you are legally liable for property damage to others caused by your vehicle. In a "Single Limit" policy, this would be included in a combined limited with any Bodily Injury that you are also legally liable to pay.
- Medical Payments - Pays medical, dental, hospital, and funeral expenses for you and resident relatives injured in a motor vehicle accident. Also protects you and resident relatives in other vehicles or if struck as pedestrians.
- Uninsured or Underinsured Motorist (UM or UIM) - UM/UIM pays for loss of wages, pain and suffering and other related medical expenses that you or a resident relative are legally entitled to recover because of Bodily Injury or death caused by a uninsured or underinsured motorist. This can also apply in a hit-and-run situation as long as you are able to get a license plate number and report it within 10 days. UM pays up to the first limit for any one person and, subject to the first limit for any one person, up to the second limit for all persons injured or killed in an accident. UIM pays you and resident relatives in your vehicle against damages arising out of accidents with motorist who have motor vehicle insurance with lower limits of liability coverage than those damages suffered by you. UIM Pays the difference up to the first limit for one person and, subject to the first limit for any one person, up to the second limit for all persons injured or killed in one accident.
- Collision - Pays for losses to your vehicle caused by collision with another object or by upset of the vehicle. Payments are made on an "actual cash value" basis for the amount of each loss. The collision deductible applies.
- Comprehensive - Pays other than collision losses to your vehicle caused by fire, theft, vandalism, hail, windstorm, riot, falling objects, flood, etc. The comprehensive deductible applies.
- Rental Reimbursement - Pays rental car expenses for any covered comprehensive or collision loss. Pays a dollar amount limit per day for a specified number of days (Ex. $30 a day for up to 30 days).
- Towing and Labor (labor performed at the scene of the breakdown only such as changing in a tire) - Pays up to the policy limit for each disablement for towing your vehicle or labor costs at the place of disablement. Does NOT pay for parts or subsequent repair costs.
- Loan or Lease Gap Coverage - Covers the difference between the "actual cash value" of a vehicle and the loan/lease payoff when the vehicle is totaled in a covered accident. (Does not apply to any amounts that negatively affect the value of the vehicle purchased. i.e. upside down trade-ins).
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Homeowner Insurance - Important Facts
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- When purchasing a homeowner’s policy, it is important to note that there are limitations for certain types of property, such as jewelry. Valuable items that are typically subject to appraisal are best covered by scheduling them by name to the policy. When doing this, the covered perils can be broadened and the policy deductible is typically waived.
- An Important coverage addition to consider including in your homeowner's policy is Ordinance and Law coverage. Ordinance and Law coverage pays toward increased costs of construction due to changes in the building code or the implementation of a law or ordinance. For example, if your single-pane windows were damaged due to a covered loss, you would be required to replace them with double-pane windows. The cost between what you had, and what you have to have would be an out of pocket expense without Building and Ordinance coverage.
- It is important to insure your home with the correct type of liability. Be sure your agent knows if your home will be owner or tenant occupied. An owner occupied home policy needs to have Comprehensive Personal Liability included on the Homeowner’s policy. A tenant occupied home needs to have Owners, Landlord, and Tenant Liability included on the Dwelling Fire Policy. Be sure to contact your agent if the occupancy of your home ever changes from Owner to Tenant, or vice versa.
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Homeowner Insurance - Definitions
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