Insurance World

Most states require that a vehicle be insured before it can be driven on public streets and highways. It is important to understand the terminology of your auto insurance policy so that you know that you have the necessary insurance coverages for your area. Take time to review your car insurance to make sure you have what you need.

Deductibles:

The deductible is the portion of a covered loss that is your responsibility. The deductible applies to each covered loss. Deductibles vary by state but are typically in the amounts of $100, $250, $500 or $1,000. Usually, the higher the deductible the lower your premiums. Of course, the amount you must pay out of your pocket increase with the higher deductible.

Coverage:

There can be many types of coverage included within one single auto insurance policy. Insurance coverage requirements vary by state and usually include the following types of coverage:

Liability: Liability coverage pays for accidental bodily injury and property damages to others when the insured person is legally responsible for an accident. Bodily injury damages include medical expenses, pain and suffering, lost wages and other special damages. Property damage includes damaged property and may include loss of use. Liability coverage also pays defense and court costs.

Personal Injury Protection: Personal Injury Protection is required in some states. It pays medical expenses for covered persons, regardless of fault, for medical treatment due to an auto accident.

Medical Payments: Medical Payments Coverage is available in most states. It pays medical and funeral expenses for covered persons, regardless of fault, when those expenses are related to an auto accident.

Collision: Collision coverage pays for damage to a covered vehicle caused by collision with another object or automobile.

Comprehensive: Comprehensive coverage pays for loss of or damage to a covered vehicles, not caused by a collision or accident. Examples include loss caused by fire, wind, hail, flood, vandalism, theft or hitting an animal.

Uninsured Motorist: Uninsured Motorist coverage pays damages when a covered person is injured by an auto accident caused by a driver who does not have liability insurance.

Rental Reimbursement: Rental Reimbursement pays car rentall expenses when your auto is disabled due to an accident.

Emergency Road Service: Emergency Road Service pays expenses incurred for having your auto towed as a result of a breakdown.

Who is covered under an auto policy?

Your policy usually covers you, your spouse and other relatives who live in your household and others who have permission to drive one of your covered vehicles.

If you manage a small business you’ll dread the possibility of a member of your team being be taken seriously ill or dieing. Apart from the personal upset, your business would be hit hard. Sales or production could take a dive, key skills could be lost and the general pace of the business could fall. All this costs the business money.

Insurance is available to offset those financial risks, risks that can be especially serious for smaller businesses. After all in smaller businesses other employees can’t be moved across to fill the gap - there’s simply no one spare. So the problem remains until the person either returns to work or is replaced.

If the person is off sick with a serious illness such as a stroke or a heart attack you simply don’t know when, or if, they’ll return to work. It could be a month, six months even a year or more. Management is then caught in a cleft stick. Do you take on a temporary employee, contract out or recruit a permanent employee? Or are you forced to tread water and wait for matters resolve themselves? That’s risky. And how much will all this cost the business in terms of extra overheads, lost sales and profit?

Keyman Insurance has traditionally absorbed these very real financial risks but nine out of ten small businesses still don’t carry that insurance. It’s either because they haven’t addressed the problem or they’ve found Keyman Insurance to be too costly.

A Simon Briault, a spokesperson for the Federation of Small Businesses said, “In an ideal world, small firms would be insured against everything, but reality demands the businesses prioritise threats and occasionally take risks”.

But there is a cheaper alternative. It’s called Group Critical Illness Insurance. And it’s about half the price of normal Keyman Insurance!

With Group Critical Illness Insurance, the management decides which employees to insure and how much to insure them for. The business then pays the premiums and receives any lump sum payout. A claim can be made as soon as any of the insured employees are diagnosed with any critical illness which is scheduled within the insurance policy. As you would expect heart attacks, strokes and cancer are the biggest three biggest reasons for a claim but the full list of insured critical illnesses is much longer. For example, kidney failure, meningitis, paralysis and even blindness.

The important point to realise is that to make a claim, the insured employee must survive at least 28 days after their critical illness is diagnosed. (Some insurance companies have now reduced this to 14 days so please check before you buy.) Therefore, if the employee were to die before the end of the survival period, any claim would be invalid. In that context, it’s not as comprehensive as full Keyman Insurance – but at around half the price of there has to be some compromise!

Simon Burgess, the MD of British Insurance says: “Group Critical Illness Insurance is a real alternative to full Keyman Insurance - and at around half the cost, it’s great value for money. If managers find Keyman Insurance too expensive there’s little excuse for not covering the biggest part of the risk with Group Critical Illness Insurance. Don’t pay the price for apathy”.