Insurance Terms and Frequently Asked Insurance Questions

Insurance salespeople say that the most difficult part of selling a policy is that the buyer needs to focus on the fact that bad things do happen!

Purchasing protection against the myriad of "might happens," is a decision that many of today's couple are making. The costs associated with wedding planning grow year by year, so such a purchase seems a more appropriate budget item addition.

What follows are terms which will help to familiarize you with the kinds of insurance which are available to you and answer some basic questions about insurance.
Agreed Value is the value you set with your insurance company on the item you want to insure. You and your insurance agent will agree on the price of individual items which you choose to insure, such as artwork, automobiles, pieces of jewelry, etc.

Coinsurance refers to a clause in your insurance policy which requires that you insure your property at a minimum level. This level is a minimum percentage of the property's real value (usually set at 80%). Your insurance company will not permit you to insure an item below its true value. If the insurance you carry is less than what is required by this clause, any claim payment you make may be reduced. Coinsurance ensures that the insurance company will not lose money should you make a claim.

Coverage refers to the level of protection provided you by your policy. Risk coverage varies substantially from company to company and from policy to policy.

Do your homework carefully when selecting an insurance company and/or an insurance agent.

Basic Coverage is coverage which protects your valuables against fire, lightning, explosion, windstorm, hail, (most forms of) smoke, and several other causes of loss.

Broad Coverage is what protects your covered property against direct loss arising from one of the specific "hazards" listed in the policy.

Special Coverage protects covered property against direct loss arising from any cause not specifically excluded by the insurance company.

The Deductible is that portion of the claim which you must pay before your insurance kicks in.

An endorsement is a change to an existing policy which amends (adds or deletes) previously coverage.

A Floater is used to extend coverages that are limited in your Homeowner's or Tenant's policy. Floaters are usually used to cover items like antiques, art objects, jewelry, silverware, furs, watches, firearms or cameras, which all have limited coverage under the policy without a floater.

Many prospective brides add a floater to their parents' Homeowner's insurance policy. If you and your fiancé still live at home, this is an excellent, cost-effective choice, because the floater will allow your parents to increase coverages that are limited in their original Homeowner's policy. A temporary floater added to your parents' insurance policy can also be used to insure wedding gifts you receive before your wedding.

There are a variety of plans available to cover a variety of possible mishaps. One type of policy, Cancellation or Postponement insurance, will cover non-refundable deposits, when the cancellation or postponement is beyond the buyer's control (e.g., serious illness in the bride, groom or immediate family). Travel cancellation coverage, offered by most travel agents, covers trip cancellation and postponement.

Special Event Coverage can be purchased to include and cover any number of options such as damage to rented property or mishaps with photography and videography. This kind of insurance can be tailored to the particulars of a wedding.

Bear in mind that it's, of course, not cost-effective to buy insurance which duplicates coverage that your wedding professionals carry. Ask the wedding service providers about the limits and extent of the insurance they carry before you make your own purchase. As always, read the fine print and ask questions. An intelligent purchase is your best insurance.

Homeowner's Policy is usually divided into two parts. The first section protects your home and the possessions it contains. The second part covers you when you are held liable for something you did or for something that happens on your property. This is the most basic policy and is one every young couple should have (see below).

Renters' or Tenant's Policy is the same as Homeowner's, but, instead of covering a house, it covers a rental.

A Homeowner's Policy covers the dwelling and protects your house and any structure attached to it, like a garage or deck. The Personal Property portion of the policy covers the things in your house, like your appliances, furniture, etc. if you take these things out of the house on vacation they would still be covered. There are limits to the amount of coverage available for certain valuables without specific floaters or other coverages. Loss of Use covers additional living expenses you may incur if your house is damaged under certain, specific circumstances and you are forced to temporarily live elsewhere. Medical Payment covers the medical expenses of someone who becomes injured on your property, or injured by you or a family member. Personal Liability refers to the provision of payments for bodily injury or property damage for which you or a family member is responsible.

Replacement Cost refers to the actual cost to repair or replace damaged items with items of like kind and quality. Replacement cost does not account for depreciation (i.e., wear, tear, decline in price). Keep this in mind because you may take a serious loss if you need to replace property at today's prices, but get yesterday's value.

Educating yourself about insurance, selecting a reputable insurance company, listening and learning are all positive steps toward purchasing insurance that will protect you, in the event of unfortunate, unexpected mishaps and events.

With the price tag of weddings so high, couples are opting to pay for wedding insurance. Coverage varies with different companies. Popularized in England, wedding insurance is now available in all 50 states. Some of the accepted reasons for cancellation, or postponement are severe weather conditions where bride and/or groom, or most of the guests cannot reach the premise, death in the family, illness, a natural disaster (fire, flood, etc.), inaccessibility to the ceremony, or reception site, wedding professional no-shows, or going out of business, a lost, or damaged gown, or the bride, or groom, or other "key" participants getting sick. Insurance may also extend to damaged property and/or gifts, military deployment, a last-minute corporate relocation, acts of terrorism, and, in some cases, cancellation due to job loss.

Photographs and video are all that "remain" after the wedding is over and are, therefore, a crucial element. If the photographer and/or videographer fail to show, wedding insurance can also include payment, where necessary to reshoot. It can also cover the fee for shooting again, in the event that negatives are lost, damaged, stolen, or not properly developed. Some policies will even pay to have the wedding staged and principal participants brought together so that "authentic" photos can be retaken. If the professionally produced video is damaged, a policy will usually pay to have either a video montage created, a video compilation made of the photographs and other wedding memorabilia, or, if possible, a retaking of the official video at a restaging.

Wedding gifts will either be shipped in advance, or given to you on your wedding day. Often the gift table is not "secured," and, it is possible for gifts to "walk away." Your wedding insurance can cover gifts, or anything else of value that is being utilized during the event. If non-monetary gifts are lost, stolen, or damaged, it is likely that a police report will need to be filed. In order to be covered, any claim for damage, or theft needs to take place within a limited time.

Should someone be injured, or property damage because of an accident during the course of your wedding, the policy may cover reasonable medical expenses. Some policies even cover professional counseling for emotional distress resulting from wedding cancellation.

Most honeymoons today are very expensive. That's why the industry set up travelers' insurance. Before buying travel insurance, it'‘s best to see if your credit card and/or homeowner's policy cover you if your luggage is damaged, or stolen, your trip is delayed, or you have to cancel. Your insurer, or travel agent can help you make the best choices.

"Changes of heart" are almost always excluded from the policy. Jewelry is usually not covered and needs to be on a separate "floater" policy. Keep in mind that your insurance could be invalidated if you cancel because of something you knew about when you bought the policy, you cancel because you can't afford the wedding, or you cancel because of injury due to hazardous activities.

As with any contractual agreement, it's important to read the fine print. There is usually a specified maximum amount, which can be claimed under each section of the policy. Couples should make sure they know what they are buying and they should choose wisely. The price also varies, but runs in the vicinity of 1% of the total cost for the wedding. Policies start at around $150. Average policies cost between $200 and $400. Wedding insurance can protect you against disasters, and give you peace of mind. With the right wedding insurance policy, you can reschedule your wedding and still recoup your expenditures, less the policy's deductible.

The sooner you take out a policy, the better, but certainly before you start spending any monies on your wedding. It's best to contact the insurance company you are already working with for renters, or car insurance. Because not all insurance companies offer wedding insurance, if your company doesn't write such policies, they will, hopefully, know who does and where to send you. Your insurance dealer should also be able to tell you if any of your existing insurance policies cover any part of wedding issues.
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