Insurance Break Down

How Insurance Works

We all know that we need to have some type of insurance policy, but knowing what the best policy and agency to go with can be tricky. That is the first step to being insured is purchasing insurance; you need to find an agency and agent you can trust. This agent should have your best interest in mind; they should help you find a policy to match your individual needs. After working with a trusted agent, you will have a regular payment to an insurance carrier referred to as your “premium”. Premiums can be paid monthly, semiannually, or annually. In exchange for your premium, the insurance carrier agrees to pay for any loss if a covered event occurs, referred to as a “claim”. Insurance works by spreading the risk of loss across many months to make the financial burden of the risk lower for all.

That is the big picture; let us dive into some of these specific parts.

What is an insurance agent?

Insurance agents that work for either a specific carrier or independent agency. These are also known as captive and independent agents. For example, Price & Ramey is an independent agency, working with over 150 different insurance carriers and brokers to match you with a policy that best fits your needs. Policies often vary based on what is covered in the event of a claim, for how much it is covered, your premium amount, and more. Your insurance agent’s job is to sell and negotiate different types of insurance policies that match their client’s needs, including life, health, home, auto, business,  or any other type of insurance you may need. Your insurance agent will assist in settling claims, customizing programs to suit your needs, ensuring the fulfillment of policy requirements, and so much more. If you are interested in how to find the right insurance agent, check out these tips.

Insurance Policy Terms

1. Deductible – what you pay in a claim
2. Exclusions – what is not covered in your purchased policy
3. Type of Policy – insurance agencies offer a variety of coverages
4. Special Limits –  the section of your policy that lists the limits of the amounts payable
5. Endorsements –  any add-ons for your current policy

When should you buy insurance?

1. When it’s required by law, i.e. liability insurance for your car or workers’ compensation insurance for your business
2. When it is required by a lender, i.e. homeowners insurance to receive a home loan
3. When a financial loss would be too great for what you could afford to pay or recover from, i.e. you own expensive music equipment in your rental space, therefore you would want to purchase renters insurance.

Insurance is Essential

 Insurance ensures when taking a big risk there will be a manageable cost if something goes wrong. Think of insurance as a person who will always have your back when the going gets tough. If you have a car accident, then your insurance agency is there to help you get to work the next day. If your house is damaged in a fire, your insurance agency will ensure you can recover. Insurance may seem unnecessary, but it will be there when you need it most.

How to Buy Insurance

Purchasing insurance is a personal decision and one that should be guided by your comfort level. Make sure you understand what you are looking for, and find an agent you can trust. Explore a few options and find something that fits your needs. Often, working with an independent agent gives you the most coverage options and an agent in your town to assist you along the way. Our agents here at Price & Ramey would love to answer any questions you may have–give us a call!