Insurance has its own language. Deductibles, limits, exclusions, liability, comprehensive, collision, replacement cost. You hear these terms all the time, but that does not always mean you know exactly how they affect you.
You do not need to know insurance inside and out. That is our job. But you should understand the basics of what your policy covers, what it does not cover, and what you may be responsible for if something happens.
So, what does your insurance actually cover? A good place to start is with four things: deductibles, limits, exclusions, and the different types of coverage on your policy.
What Is Your Deductible?
Your deductible is the amount you are responsible for paying toward a covered claim before your insurance pays its share. For example, if you have a $1,000 deductible and a covered loss causes $5,000 in damage, you would generally be responsible for the first $1,000. Your insurance would then respond to the remaining covered amount, based on the terms and limits of your policy.
The part we want you to know is simple: what is your deductible? You may have different deductibles depending on the policy or type of loss. Knowing those numbers ahead of time can help you understand what you may need to pay out of pocket if you have a claim. That is something you want to know before the storm, accident, or other loss happens.
Do You Know Your Coverage Limits?
Having insurance does not necessarily mean there is unlimited coverage. Every policy has limits. Those limits tell you how much the policy may pay for certain covered losses. For example, you could own $50,000 worth of property but only have $25,000 of coverage available for a certain type of property or loss. That is a pretty important difference to understand.
There are often several limits within one policy, which is why simply knowing that you are "insured" does not tell the whole story. When we review coverage with a customer, we want to make sure the numbers make sense for what they actually own and what they are trying to protect.
What Is Not Covered?
This is the part people do not always think to ask about. An exclusion is something your policy does not cover. And every insurance policy has them. That does not mean there is something wrong with your policy. It means insurance is designed to cover certain risks under certain conditions, not every possible thing that could happen.
The important question is whether you understand the exclusions that matter to you. If there is something you are especially concerned about, bring it up. It is much better to ask, "Would my policy cover this?" now than find out after a loss.
Different Coverages Do Different Jobs
Your insurance policy is usually made up of several different types of coverage.
- Take auto insurance. One part may help with damage to your own vehicle, while another deals with injuries or property damage you cause to someone else.
- Home insurance can include coverage for your house, your belongings, liability, and other areas.
- Farm and business insurance can have even more pieces because we need to know how your buildings, equipment, vehicles, and property are being used.
That is why we spend time asking questions. We are not just looking at a policy. We are trying to understand what you have and how you use it.
You Should Know What You Are Buying
You do not need to sit down and memorize your insurance policy. But you should know your deductible. You should have an idea of your limits. You should understand the exclusions that could affect you. You should know what the main parts of your coverage are there to do. If you do not know, ask.
At Harmoning Agency, we believe you should understand what you are buying. We will sit down with you, walk through your coverage, and explain it in a way that makes sense. Because the time to understand your insurance is before you need it.