Sep 02, 2015
Insurance policies are designed to provide protection, financial security, and peace of mind, but they can also be confusing. To understand your insurance policy, you need to understand the policy limits. Here’s what you need to know:
A policy limit is simply the maximum amount of coverage an insurance policy will provide if you file a claim. It is important to remember that if you are liable for damage that exceeds the limits of your insurance policy, you’ll have to cover the additional costs on your own.
Homeowners policy limits set a maximum amount of coverage, but they also exclude specific types of coverage. For example, most homeowners insurance policies do not cover flood damage or earthquake damage. If you want protection from these events, you will need additional policies.
Be sure you choose a policy with limits that are high enough to cover the cost of replacing your property and defending you in the event of a lawsuit. You’ll also need to consider the requirements set by your lender. Many banks will require a specific amount of coverage in order to protect their investment, but you always want to insure up to 100% of the replacement value
There are many different types of auto insurance coverage. For example, someone with a new car will likely want more coverage than someone with a very old car that rarely uses it.
When choosing an auto insurance policy, make sure you comply with the requirements of your lender and be sure to look up state and federal laws. Most states have laws that require insurance policies with specific limits.
Regardless of state minimum limits you should always consider and purchase the highest limits you can afford. For example, 100/300/100 means your policy has:
Selecting the right amount of insurance coverage will protect you and your assets. Be sure you know what your policy limits are and choose insurance polices that provide adequate coverage. To learn more about insurance policy limits, visit Bradenton Insurance.