Auto & Home Insurance

The ABC’s of Auto Insurance 

The questions around auto insurance center not so much on whether to have it—it’s mandated by state law, required by your lender, and serves to protect your assets—but what kind of coverage you should purchase.

Types of Coverage
There are several forms of coverage that a car owner may purchase, some of which are required, others of which may be optional.

The coverage requirements in most states include:

• Bodily injury liability (pays for the cost of injuries you cause to another individual), and
  
• Property damage liability (pays for the damage you cause to another’s car or to objects or structures you hit).

Some, but not all, states will require that you have coverage for:

• Uninsured and underinsured motorists (covers the costs associated with being hit by an uninsured or underinsured driver, or in the case of a hit-and-run accident), and
  
• Medical payments or personal injury protection (PIP) (pays for medical treatment for you and your passengers). PIP coverage is available in “no-fault” states and may also cover lost wages and funeral costs.

If you borrowed to purchase your car, the lender may require collision and comprehensive coverage.

Collision coverage reimburses you for damage to your car resulting from a collision with another car, object, or structure; a pothole; or from flipping over.

Comprehensive coverage is designed to pay for car damage not arising from a collision, e.g., theft, hail, windstorm, flood, fire, and hitting animals. This coverage may also pay for windshield repairs.

If you own your car outright, you may want to consider purchasing collision and comprehensive coverage if your car has a significant market value. You may find that the potential economic loss is sufficient to warrant the cost of collision and comprehensive protection.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Understanding Homeowners Insurance

Purchasing homeowners insurance is not only critical for protecting your home, your personal property and against any potential liability, but if you have a mortgage, your lender will require it.

What’s Covered
A homeowners insurance policy is a package of coverages, including:

• Dwelling: Covers damages to your house and any attached structures, including fixtures such as plumbing, electrical and HVAC systems.
  
• Other Structures: Pays for damage to unattached structures, including a detached garage, tool shed, fence, etc.
  
• Personal Property: Covers personal possessions such as appliances, furniture, electronics, clothes, etc.
  
• Loss of Use: Reimburses for additional living expenses while you are unable to live in your home.
  
• Personal Liability: Pays claims if you are found liable for injuries or damages to another party.
  
• Medical Payments: Pays the medical bills incurred by people who are hurt on your property or by your pets.
  

Remember, these coverages pertain only to losses caused by a peril covered by your policy. For instance, if your policy doesn’t cover earthquake damage, then losses will not be reimbursed.

Types of Homeowners Policies
The types of covered perils will depend on the type of policy you buy.

The Special Form is the most popular policy since it insures against all perils, except those specifically named in the policy. Common exclusions include earthquake and floods. Typically, flood insurance is obtained through the National Flood Insurance Program, while earthquake coverage may be obtained through an endorsement or a separate policy.

Limits of Coverage
Your policy will impose limits on the amount of covered losses.

If you have a valuable art collection or jewelry, you may want to secure additional insurance on those items.

Be aware of whether your policy insures for replacement cost (pays the cost to rebuild your home or repair damages using materials of similar kind and quality) or actual cash value (home value based on age and wear and tear), which may not cover all your losses.

Coordinating Umbrella Liability Coverage
Individuals with significant assets may want to consider attaching an umbrella policy to their homeowners policy, which provides liability coverage in excess of the liability limits of your current policy.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.