There are two main components that form insurance coverage. These two components are the legal contract between you and the insurance company. Our goal is to help with your understanding.
The insurance policy is a contract and unlike your Facebook agreement, this is one you should understand as there may be obligations you need to meet.
You can also find southsides policy below if you would like to read what a policy contains.
Important definitions within your policy
There are two types of insurance policies that offer Actual Cash Value and Replacement Cost.
Replacement costs covers an item based on how much that item is worth today, after depreciation. For example, your 15- inch Mac Book pro which originally cost you $2,449.00 in 2016 and today due to deprecation is only worth $1900. The $1900 is the amount that you would receive in the case of a loss.
Actual Cash Value this policy covers your personal items to the value you could buy a similar item today. For example, if your dorm room flooded and flooded and your clothes were destroyed due to mold. Your Levi jeans would be replaced with this year’s similar jeans even if they are not the exact same value. This policy is often more expensive but will give you a higher payment.
Specified Perils: these are losses that are a result of a particular event and are defied in the text. These are usually Fire; Lightning; Explosion; Smoke; Falling Object; Impact from aircraft or land vehicle; Riot; Vandalism/ malicious acts; Freezing (usually for Plumbing; Pipe bursts;) windstorm or hail; transportation (damage caused by collision, derailment, etc. to your home from automobile or trailers)
Premium: This is the amount of money you must pay for an insurance policy. It is the purchasing price, once you have paid for it it becomes what is known as earned, meaning the insurance company must provide coverage to you in the event of a legitimate loss.
Deductible: The deductible is the amount that you must cover when you have a claim. In other words, it is your portion of a loss before your insurance company will cover the rest of the event.
Why do you have to pay for a claim when you already have a loss? The reason that deductibles exist is prevent fraudulent claims on your insurance, they also tell the insurer what kind of a client you are, a higher deductible means you will absorb or retain more of the loss, meaning you think you are less likely to have an event occur. It also means they do not have to deal with of smaller claims
Coverage limits: These limits are the maximum amounts your insurance company will pay on a claim. For example if your limit is $2,500 on a bicycle and your bike is worth $3000. If that bike is stolen they will only replace up to $2,500 minus the deductible. That would mean you would have to pay $500 out of pocket plus any deductible.
SouthSide Insurance
If you purchase your policy from southside you will see a similar policy to the one below.
Please note that any and all information is not legal advice, and may contain errors, This information and website is primarily for educational purposes and was designed to be used as an educational tool.