Insurance

Insurance is often seen as a savings account that we pay into as a way to save up for a time when we need to withdraw funds to pay for our losses. Rather, insurance is a concept where a group pools together funds to assist each other when one suffers a loss. These funds cover the cost of losses that otherwise could not be paid for individually. There is a sense of security knowing that there will be financial support to assist you in that time of need. Insurance offsets the risk of facing expenses whether it is a loss of something we own, medical expenses, or a loss of life.
 

How insurance works

Insurance carriers are companies that provide insurance and assume the risks covered by policies. You purchase policies for protection of those things that would be difficult to pay for or replace should there be damage or a loss. Policies can be purchased directly through the company or through an office that acts as an agent for those companies, such as Miller-Lewis Insurance Agency. Should there be damage or a loss, you would report a claim to the company or your agency. If there is an inspection needed to determine the extent of damage or loss, a representative from the insurance company known as an adjuster will be sent to personally inspect and assign a dollar estimate to the claim.
 

How your claim is paid for

Insurance companies invest the money they receive in premiums to build a portfolio of financial assets. This provides the funds needed to compensate policyholders for their losses. The funds grow through investments and when additional policy premiums are added. Everyone who is invested help those who are in a time of need. Should you have a need, everyone’s investment, including yours, will be there to support your claim.
 

Insurance cost

The total yearly cost for the policy is called a premium. Payment schedules (monthly, quarterly, etc.) can be set up so the total cost isn’t due all at one time. The cost of any premium is related to the risk taken to provide insurance and the highest amount that could be paid out should there be a claim. Factors used to calculate risk include age, value and condition of what is being insured. Other factors can include past claims, violations, on-time payment history, the number of times insurance coverage has been switched, and even your credit rating.

Your policy

The policy is the document that is agreed upon between you and the insurance carrier (insurance company). In the policy, the carrier states the length and conditions of the agreement, exactly which losses it will pay for, and the maximum amount (or insurance limit) that will be awarded. It is important that you read and understand all parts of your policy. If you are unsure of any statements your policy makes, discuss them with your agent. Policies also state when insurance coverage applies, when there are limitations, and describes any circumstances when it does not provide coverage. A summary of this agreement is found on a declaration page or “dec. page” and is commonly the top sheet of your policy. Explanation of your coverage as outlined on the declaration page is found within your policy.

Purchasing insurance

Independent Insurance agencies (such as Miller-Lewis Insurance Agency) sell insurance policies for various carriers. This allows you to compare policies and costs as provided in quotes from a variety of companies. Smart consumers “shop around” using the internet as well as receiving quotes through agents in person. It’s wise to actually talk with an agent before you make a final decision. You will want to make sure that you compare the exact same coverages to get an accurate cost comparison. It’s like comparing “apples to apples”. But then, what if you need a peach? That is where the agents at Miller-Lewis can help. We can match your specific needs with the coverage that will provide the proper protection and we will see that it also fits into your budget. We can also start with your budget and find a policy that provides the best coverage within your budget range. It’s all about the value for your insurance dollar, not just the price.

Reducing the cost of insurance

The amount you pay as a premium can be reduced by changing the amount of your policy’s deductible and through the application of discounts you may qualify for. The deductible is what you agree to pay up front before the insurance company pays the remainder of the claim. The higher the deductible, the less your premium will be. You may also qualify for discounts offered by the insurance company. Make sure you ask your agent for all discounts applicable to your policy. Common discounts include (not provided by all companies):

Common types of coverage

Property-casualty insurance: protects against loss or damage to property resulting from hazards such as fire, theft, and natural disasters.

Liability insurance: shields policyholders from financial responsibility for injuries to others or for damage to other people’s property.

(Policies such as automobile and homeowner’s insurance combine both property-casualty and liability coverage.)

Commercial/Business Insurance: provides a variety of policy coverages to protect business owners, their facilities, business equipment and liability overage.

Life insurance provides financial protection to beneficiaries—usually spouses and dependent children—upon the death of the insured.

Health insurance: pays the expenses resulting from accidents and illness. This can include those who are leaving their employers group plan, for dependents not covered by their guardian(s) plan, those who have retired early, college students, self-employed, those eligible for COBRA coverage, senior citizens, and Health Saving Account (H.S.A.) plans.

Group insurance: Policies can also be written for groups of people, ranging from a few to thousands of individuals. These policies usually are issued to employers for the benefit of their employees or to unions, professional associations, or other membership organizations for the benefit of their members. Among the most common policies of this nature are group life and health plans.

Disability insurance: supplies a preset income to an insured person who is unable to work due to injury or illness