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What coverages do I have to buy?
What does "full coverage" mean?
What happens after I file a claim?
Why do I have to pay my deductible when the other party is at fault?
Why did my adjuster deduct for betterment?
What is comparative negligence?
Why is my vehicle a total loss?
How will the insurance company settle my total loss?
What is insurance?
Insurance allows you to transfer risks to an insurer for a stated period of time. When you drive a vehicle, you could damage someone else's vehicle or property, damage your own vehicle, and inflict bodily injuries to others and yourself. You may transfer all or some of these risks to an auto insurance company. This occurs when you pay your premium.
Some people believe insurance is similar to gambling or opening a savings account. Neither is true. When you place a bet, you create a risk and you have the chance of losing all or making more than your wager. Insurance companies write policies for pure not speculative risks and indemnify you when you have a covered loss. In the insurance industry, the word "indemnify" means you cannot be put in a better position than you were before the loss.
Your premium buys nothing more than a contract, which is the policy. While you can cancel your policy before the expiration date, you will only receive the unused portion of your premium. At the end of the policy period, whether you had a covered loss or not, all premium dollars belong to the insurance company. If you want to continue your coverage, you must pay another premium.
© 2008 By Higgins Body & Paint, Inc. All rights reserved.
