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Breaking Down Premiums, Deductibles and Liabilities

When you are looking for insurance, it can be difficult to understand all of the terminology that is used. One of the most important concepts to understand is premiums, deductibles and liabilities. In this blog post, we will break these terms down and explain what they mean for you as a consumer. As an independent insurance agency, we want to ensure that our customers have all the information they need to make informed decisions about their coverage.  

Premiums 

Insurance premiums are the amount of money that an insurance policyholder pays to an insurance company for their coverage. The premium is usually paid on a monthly basis, and the amount will depend on a variety of factors, including the type of coverage, the amount of coverage, and the insurer’s rating. In most cases, the higher the premium, the more comprehensive the coverage will be. However, it is important to remember that the premium is not always indicative of the quality of the coverage. Some insurance companies charge high premiums but provide poor-quality coverage, while others charge lower premiums but provide excellent coverage. It is important to research an insurance company before purchasing a policy to ensure that you are getting the best possible value for your money. However, the everyday person does not necessarily have hours of time to dedicate to researching insurance companies. That’s where your independent insurance agent steps in. We have the knowledge and experience to shop around for you and make the insurance process much easier on your end.  

Deductibles 

Insurance deductibles are the amount of money you have to pay out of pocket before your insurance company starts paying for a covered service. For example, if you have a $500 deductible and need to go to the hospital for an appendix operation that costs $1,500, you will pay the first $500 and your insurance company will pay the remaining $1,000. Insurance deductibles can vary greatly in amount, so it’s important to choose one that you’re comfortable with. Keep in mind that the higher your deductible is, the lower your monthly premium payments will be. And vice versa: the lower your deductible, the higher your monthly payments will be. So, when choosing an insurance plan, be sure to consider both the monthly premium and the size of the deductible. It’s also important to remember that some services (like preventive care) may be exempt from your deductible, so be sure to read your policy carefully. If you have any questions about what is and isn’t covered by your insurance plan, don’t hesitate to contact your insurance company or agent. We’ll be happy to help you navigate your policy and make sure you’re getting the coverage you need. 

Liability  

Insurance liability is a type of coverage that provides protection in the event that you are sued for damages. There are two types of liability insurance: personal and professional. Personal liability insurance covers you in the event that you are sued for damages arising from your personal activities, such as hosting a party or driving a car. Professional liability insurance covers you in the event that you are sued for damages arising from your professional activities, such as giving advice or providing services. In both cases, liability insurance can help to cover the costs of legal defense and any damages that may be awarded. Liability coverage is an important part of any insurance policy, and it is important to understand the types of coverage available and the limits of each type. By understanding your coverage, you can help to protect yourself from financial ruin in the event that you are sued for damages. 

Why It Matters  

When it comes time to renew your policy, or if you’re shopping around for a new one, it’s important to have a clear understanding of what all these terms mean. Your agent should be able to help explain things in more detail, but this is a great starting point. Have questions? Give us a call or stop by our office – we’re always happy to help! 


Written by titan-cra

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