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Insurance 102: Policy Specifics

You’ve graduated from our Introduction to Insurance course and are now ready to take a closer look at your policy. Here are some of the terms used to outline what your coverage actually means.

Home, condo or tenant
Sublimit: Your homeowners or condo insurance policy will have limits to how much reimbursement you will receive from the insurance company if you have a claim. There are different limits depending on the type of claim. For instance, the maximum payout you would receive for sewer backup damage will differ from the amount received for a damaged roof due to a hail storm. Your specific sublimits will be detailed in your policy documents. To confirm how much coverage is available, contact your BrokerLink broker.

Actual Cash Value: This is the cost of replacing damaged or destroyed property, factoring in depreciation and obsolescence. For example, a ten year old couch wouldn’t be replaced at current full value due to the decade of depreciation. Other items, such as antiques or artwork, may actually appreciate in value over time. To receive full coverage for these items, they must be listed specifically in a policy.

Replacement Cost: Refers to the cost to replace damaged or destroyed property with an item of similar quality without considering depreciation. Using the example of the ten year old couch, a customer with replacement cost protection would be reimbursed the cost of purchasing a brand new couch.

Additional Living Expenses: This covers the cost of having to live away from your home if it becomes unliveable due to a loss. It may include compensation for a hotel room or short-term rental, as well as meals and other costs associated with living away from home. Depending on your policy, there may be limits on how much compensation is received. If you aren’t sure how much coverage is in place, get in touch with your BrokerLink broker.

Auto
Accident Benefits & Liability Coverage: Mandatory for all vehicle owners, accident and liability insurance provides coverage for any incident involving your vehicle while it is being driven. This includes coverage for medical treatment, income replacement and other benefits to help if you are injured in an accident, as well as if someone takes legal action against you as a result of an accident.

Comprehensive Coverage: Comprehensive auto insurance coverage provides additional protection for your vehicle against damage including break-ins, flood and water damage, fire, and falling objects. Although it is not required by law, comprehensive coverage may be a good idea depending on what kind of vehicle you drive. If you are driving a leased or financed car, you may be required to purchase this coverage to protect the car owner or lender’s investment.

Collision Coverage: This optional coverage pays for damage to your vehicle caused by a collision with another vehicle, an object (such as a tree, guard rail or debris) or by an upset (roll overs).

If you’re reviewing your policy and have questions, don’t hesitate to contact your BrokerLink broker. We’re happy to help guide you through the insurance process and will work to make sure you have the coverage you need to protect the things you love.