Associate Level Material
Appendix E

Insurance Matrix

Type of Insurance Functions Example of Company Coverage Characteristics
Auto The primary function of auto insurance is to make sure every driver on the road is financially responsible for their actions. In some states you may use other means to meet financially responsible guidelines, such as putting up a cash deposit with the Department of Motor Vehicles (DMV) or using a surety bond. With the small amount of cash needed auto insurance is the most common way to meet financial responsibility requirements to drive on the road. A clearer definition of the function of auto insurance can be viewed by looking at the regulations in place in the state you live. This is due to car insurance being regulated not at the federal level but at the state level. The ultimate function of insurance is to make the situation as right as possible. To restore things back to the way they were prior to the accident. If you were injured, you have to be healed. If your car got damaged, it would be repaired. If your car died on the road, towing insurance would be used to bring it to a repair shop. Your car is one of the most expensive things you own and insurance protects that investment. It provides you with a way of dealing with accident expense and trauma, theft and securing a loan on the car. Your car is a bold, heavy, machine which moves at fast speeds. As the owner, you have an obligation for the safety of passengers, other drivers, pedestrians and property. It’s a powerful responsibility. Finally, you are required to show the financial responsibility inherent in owning a car. This is best complied with via car insurance. In fact, in most states, showing proof of insurance is necessary prior to registering a car 21st Century Insurance, Geico, State Farm, All State Insurance, Esurance, Nationwide Insurance, Progressive Insurance, Liberty Mutual Insurance, AAA, USAA, etc. . Liability helps shield you from the financial burden of compensating others involved in a collision for their bodily injury or property damages. In tort law states, if you're found to be at fault, all of these expenses -- including medical expenses, funeral costs, pain and suffering, lost wages, repair costs and legal costs -- could otherwise come out of your pocket. Most states require a specific level of liability insurance. Collision coverage, as the name implies, pays for repairs to your vehicle caused by collision with another vehicle or object. If the damage is severe enough, it may also shell out for a replacement vehicle. Although not legally required, a lender will usually oblige you to carry collision insurance for the duration of your car loan. Underinsured/Uninsured Motorist coverage helps pay your medical and repair/replacement costs when another party is at fault for the accident but lacks adequate insurance coverage. It's generally cheaper than other types of coverage with the same payout value. Medical helps cover medical treatment for accident-related injuries, regardless of fault. In some cases, it also covers other family members when they drive the insured car. Personal Injury Protection (PIP) pays you back for a certain amount of lost income, child care expenses and medical expenses if you're hurt in an accident. PIP provides coverage for items that you might not generally budget for and that might not be covered by medical insurance. In no-fault states, people often buy PIP to pay for medical bills. Unfortunately, dishonest doctors and clinics sometimes abuse and defraud PIP systems, billing for unnecessary and expensive procedures, which drives up coverage costs.
Home The basic homeowner’s insurance policy pays you in case of any damage due to fire, severe storms, tornados and hurricanes. Damage to your property, possessions and home are primary elements to be covered. Coverage provided by the policy is not the most important aspect; the most important aspect is the amount they provide in case of any disaster. Loss of possessions like furniture, electrical appliances, jewelry, and clothing are also generally covered by some of homeowner’s insurance policies, up to a specific percentage of the policy. Amica Mutual,State Farm, USAA, Farmers’ Insurance, Liberty Mutual, Nationwide Insurance, Progressive Insurance, Liability coverage protects you in case you are responsible for someone else’s injury or property damage. In such cases home owners insurance will soon provide you minimum 18,000 USD as coverage. Policyholder can buy an extra premium of $1.5 million. Liability coverage also covers certain injuries that happen within the premises of your home such as your dog biting someone. A sum of $700 is paid to the insurer with basic homeowner’s policy; this can increase up to $5,000 after paying extra. Dwelling coverage will pay you in case of damage to your outstanding building (garage, storage, shed, fencing, and boundary) and your home. Loss of use coverage will help you in case if your home is damaged due to fire, storm or any other man made or natural calamity. Loss of use coverage will pay your expenses when your home is not suitable to live.
Health The functions of insurance related to medicine are to offset the cost of well visits, sicknesses, and major health occurrences. Health insurance pays the bulk of your medical expenses when you need treatment. Most policies limit your potential expenses to relatively minor deductibles and participation costs called co-pays.
Disability
Life