FAQ

Automobile Insurance

What is Auto Insurance and why do I need to have it?

Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium.

Auto insurance provides financial protection in case you are involved in an auto accident. If an accident occurs, an auto insurance policy provides financial coverage to pay any resulting vehicle damages, property damages, and/or medical costs. The amount of money the policy provides versus the amount of money you pay out of pocket, if any, will depend on the type of coverage purchased, the financial limits of each coverage, and your deductible.

You are liable for any damages you cause to another party even if accidental, your auto liability insurance pays for those damages and/or medical expenses so that the lump sum does not come out of your own pocket. Liability is mandated in the state of California as in many other states to guarantee that if you cause property damages or medical expenses to another party they will be compensated and returned to their original status before the accident occured.

The following brief descriptions of coverage are provided to assist you in understanding the various coverage’s available to you through your insurance carrier.

A. Bodily Injury Liability - Mandatory Coverage

This coverage protects you against possible loss of your home, income and life savings (financial loss) should your vehicle injure or kill anyone and you are legally liable. It also pays for related legal defense, court and investigative costs. This coverage pays up to the first limit for any one person and up to the second limit for two or more persons injured or killed.

B. Property Damage Liability - Mandatory Coverage

This coverage protects you against financial loss when your vehicle damages another person's property, such as their vehicle, if you are legally liable.

C. Automobile Medical Payments - Optional Coverage

This coverage pays, up to your selected limit, for each person injured in your vehicle, including yourself. It pays expenses for medical, dental, hospitalization and funeral expenses.

D. Comprehensive - Including Fire & Theft - Optional Coverage

This coverage pays for loss or damage caused to your vehicle by other than a collision. This includes fire, theft, earthquake, explosion, glass breakage, riot, vandalism and wind storm protection. It pays the lesser amount of either the actual value of your vehicle or the amount of each loss, in excess of your selected deductible.

E. Collision - Optional Coverage

This coverage provides protection for loss or damage to your vehicle caused by upset or collision with another vehicle or object. It pays the lesser amount of either the actual value of your vehicle or the amount of each loss, in excess of your selected deductible.

F1. Towing and Labor Costs - Optional Coverage (Available on vehicles insured for Comprehensive & Collision Coverage)

This coverage reimburses you up to your selected limit for each disablement of your vehicle and includes towing and labor costs, at the place of disablement, excluding the costs of parts and repairs.

F2. Rental Reimbursement - Optional Coverage (Available on vehicles insured for Comprehensive & Collision Coverage)
This coverage provides for reimbursement, up to your selected limit, for a rental vehicle while your vehicle is being repaired and the cause of damage to your vehicle is covered under either Comprehensive or Collision.

G. Uninsured/Underinsured Protection - Optional Coverage

This coverage provides protection against the hazard of bodily injury caused by someone who has no auto liability insurance or whose bodily injury limits are lower than the cost of injuries caused to you, your family members and others in your auto. It must be proven that the party who was at fault is uninsured at the time of loss. This coverage may provide some protection for injuries caused by the legally responsible party who strikes your vehicle and leaves the scene of the accident without providing you any information.

H. Uninsured Motorist - Property Damage - Optional Coverage

This coverage is available on all vehicles not insured for Coverage E. - Collision. It provides up to $3,500 towards the lesser of either repairs to or the actual value of your vehicle for damages caused by direct physical contact with an uninsured vehicle where the driver or vehicle is identified and legally liable. It must be proven that the party who was at fault is uninsured at the time of loss. This coverage may provide some protection for damages caused by the legally responsible party who strikes your vehicle and leaves the scene of the accident without providing you any information.

I. Uninsured Motorist - Collision Waiver - Optional Coverage

This coverage pays your collision deductible for damages to your vehicle caused by direct physical contact with an uninsured vehicle where the driver or vehicle is identified and legally liable.

Residential Coverage

Homeowners Coverage, HO3

Dwelling Coverage, DP3 (Coverage’s A, B, D Only)

Coverage A – Dwelling

This affords insurance coverage for your home on a limited replacement cost basis. Your home is protected against risks of direct physical loss, except as otherwise excluded.

Coverage B - Other Structures

This provides coverage against risks of direct physical loss to your detached buildings on a limited replacement cost basis up to an amount equal to a percentage of the coverage limit on your dwelling, except as otherwise excluded.

Coverage C - Personal Property

The contents of your home are protected up to a limit equal to a percentage of the coverage carried on your dwelling.

Coverage D - Loss of Use

This provides coverage for additional living expenses should a covered loss cause your home to be uninhabitable. We cover necessary additional expenses, up to an amount equal to a percentage of the coverage limit on your dwelling, so that you can maintain your household at its normal standard of living.

Coverage E - Personal Liability

If a claim is made or a suit is brought against you for damage because of bodily injury or property damage (to which this coverage applies), we will pay, up to our limit of liability for the damage.

Coverage F - Medical Payments to Others

We will pay the necessary medical expenses, (to which this coverage applies), up to our limit of liability, for which you are liable as a result of an accidental injury to others.

Glossary of Insurance Terms

The following descriptions are intended to assist you in understanding insurance terms, primarily geared towards automobile insurance broad in nature and are not intended to create any kind of contractual obligation or any binding of coverage. In the event of a claim, all coverage questions will be resolved by the insurance carrier’s claims department.

Cancellation

The termination of an insurance policy, requested by the insured or the insurer during the insurance policy period.

Claim

The request for payment/compensation according to the details or an insurance contract.

Deductible

The portion of the cost of a loss that the insured must pay, this amount is chosen by the insured under comprehensive & collision coverage’s.

Endorsement

An attachment to the original insurance contract that makes some type of change or amendment.

Insured

The party involved in an insurance contract who pays a premium to an insurer in return for insurance coverage.

Lapse

A time period when an insurance policy is not in force, usually because payment and/or information was not received in a timely manner.

Named Insured

The main insured(s) whose name appears on the Policy Declarations.

Non-Renewal

An insurance company’s decision not to renew an insurance contract at the end of a policy period.

Peril

A specific cause of loss (collision, theft, fire, etc.)

Premium

The money paid to the insurance company by the insured for insurance coverage.