Has anyone ever asked you, “What are you talking about?” Insurance terms can bring this type of response. What about someone just nodding their head as though they understand. We have all done this before. However, Insurance is too important to NOT understand. The terms determine whether you are protected to the fullest … or NOT!
Serious loses will not be paid if your insurance policy does not allow it. As an insurance agent, we at the Insurance Place of Orange Park, Pickering Agency, want to answer your concerns. Here are examples that have recently come to our attention in explaining policy coverages.
When auto insurance policies are speaking on the subject of “property damage,” this is a term that should be explained by your agent. The main reason is that there are two ways that “property damage” is presented.
#1) In terms of liability coverage, property damage pays for damage to others property whether vehicles or other things. This is property that is damaged which does not belong to the insured but to someone else.
#2) Because people are not very often looking at their insurance policy unless it becomes necessary, it’s true that people do not know if their vehicle will get repaired in an accident. Some documents refer to your vehicle’s damage as “property damage.” Using the same term as in point #1 does confuse the situation. Remember that point #1 will have the term “liability” in it, thus distinguishing whether its someone else’s property or your vehicle. Your vehicle’s coverage will usually be described with the terms of comprehensive (other than collision) and collision coverage. In a covered loss your policy will pay for repairs (usually subtracting a deductible amount). This repair does not depend on the assigned fault in an accident. Some people think that if the other driver is at fault, then their insurance company will fix their vehicle. This may not be true for several reasons, two of which are, 1) the “at fault” driver is under insured, meaning not enough money in his policy to cover the high cost of repairs or for a totaled vehicle; 2) the other insurance company may refuse to take “fault” or only accept half of the cost because they “determine” you are 50% at fault.
Coverages define losses for reimbursement as being valued by Actual Cash Value(ACV) or Replacement Cost. Simply stated, replacement cost means that you can go and buy the item again, as similar in kind and value for replacement of a covered loss. Actual Cash Value means that depreciation and deterioration will be subtracted from the replacement cost value in terms of paying the amount of a covered loss.
Ordinance and Law Coverage briefly explained: This coverage is usually a percentage of your Coverage A limit. In a covered loss, this benefit is money available over and above the “Coverage A” limit for reason that building codes or laws have changed. Construction now is more costly to build again according to the original construction. In order to follow the new laws or codes more money is required. This section of your policy could allow you a choice of 10%, 25%, or 50% more money on a covered loss as a percent overage in terms of your “Coverage A” limit. Read you policy and ask your agent questions about this coverage feature.
Read, know, and understand your policy. Your policy is subject to its own specific language, terms, limits and exclusions.