Is a term used to describe any type of insurance that covers property damage caused by events outside the control of the insured.
Single-Ply Insurance – Is a policy that only covers a single claim at a time. If the property is damaged several times over a short period of time, each claim would be paid separately under a single-ply policy.
Multi-Policy Insurance – Is a type of insurance where separate policies are purchased to cover different hazards. For example, if the house were covered under homeowners’ insurance and the garage was covered under auto insurance, then both policies would be combined together to create a multi-policy policy.
Umbrella Policy – An umbrella policy is designed to replace (or add upon) the coverage provided by the underlying insurance policies listed on the declarations page of the umbrella policy. There are two types of umbrella policies: Excess of Loss and Deductible.
Excess of Loss – An excess of loss policy pays out even if the claims exceed the limits of the underlying insurance, but not to an amount greater than the total coverage provided by the underlying policies.
Excess of Loss Policies do not have deductibles.
Deductible – A deductible is a cost that is paid by an insured before the insurer starts paying claims. For example, say you have $100,000 of home owners insurance and $50,000 of auto insurance. Your deductible for home insurance is $500, while your auto insurance deductible is $1,000. You might pay those deductibles out of pocket, or you could choose to purchase an additional $200,000 of coverage called a Co-Insurance Clause. In this scenario, you would pay 20% of the costs associated with your home insurance policy, but the remaining 80% of the costs would be shared between you and your auto insurance company.
Replacement Cost Coverage – When replacing a structure or building with the same general use, the replacement cost should always be used for valuation purposes. This means that the value of the building being replaced should be determined by what it is worth today. As an example, let’s say you own a building that is valued at $150,000. However, if that building now stands empty, its true replacement cost would be $300,000 since it could easily sell for three times its original price.
Collateral Value – Collateral value refers to how much money the insurance company owes the owner for a destroyed or lost asset. For example, let’s say your car was totaled in a collision and your insurance company agrees to pay you $10,000 towards the repair costs of your vehicle. This means your collateral value would be $10,000.
Personal Accident Protection – Personal accident protection is commonly referred to as PAP. PAP provides reimbursement for medical expenses, funeral expenses, and legal fees incurred as a result of bodily injury. If you are involved in an automobile accident where you incur these expenses, you may be able to collect some monetary compensation.
Homeowners’ Insurance – A homeowner’s insurance plan covers damages to your property caused by certain risks, such as fire and lightning. It also includes liability coverage which provides financial protection for injuries that arise from property damage.
Auto Insurance – An auto insurance policy provides financial protection for individuals who may get injured while using their personal vehicles. An auto insurance policy generally covers losses resulting from accidents that happen on public roadways or private property.
Health Insurance – A health insurance plan covers many things, including emergency room visits, prescription drugs, hospital stays, doctors’ office visits, and dental work.
Life Insurance – A life insurance plan is designed to provide an income benefit to beneficiaries after the death of the insured. Typically, death benefits range from $50,000 to $250,000. Other types of life insurance plans include annuities, retirement accounts, and endowment contracts.