Auto Insurance
Your auto insurance protects you from monetary loss in the event of a car accident. Your insurance policy acts as a contract between you and your insurance company which says that in exchange for paying the premiums, your insurer will compensate you for any losses you suffer—as outlined in your policy.
The North Carolina Financial Responsibility Law requires all motorists to carry liability coverage, including the following:
◦$30,000 in bodily injury coverage per person
◦$60,000 in bodily injury coverage for all persons involved in an accident
◦$25,000 in coverage for property damage
>> But these minimum requirements may not be enough to cover damages in the event of an accident.
Before purchasing insurance for your automobile, you will want to ask yourself:
◦How much property can I afford to lose if it is stolen or damaged?
◦How much would it cost to replace those items?
◦If I am sued by someone who was hurt because of my misconduct, could I pay my legal costs? How could I afford the damage awards to the victim?
Your answers to these questions will affect the amount of coverage you choose to buy.
When you set out to find the right insurance policy, your agent will consider these factors when determining your premiums:
◦Your Driving Record: Your driving record is the largest factor in determining your auto insurance premium. North Carolina assigns points to motorists with convictions or at-fault accidents, which ultimately increase rates.
◦Where You Live: Your location also plays a part in determining your rates. Living in an urban area increases the risk of accident or theft and may boost your rate, whereas living in a rural area will decrease these risks.
◦Type of Automobile: Insurers must estimate the likelihood of theft and cost to repair or replace your vehicle when determining your rates. The style of your vehicle may also increase your premium: sports cars are likely to warrant higher premiums than mini vans. ◦Mileage: Motorists driving greater distances (to work, for instance) are at greater risk for accident, and therefore may receive higher premiums.
Homeowners Insurance
Your home insurance policy protects your home from damage incurred in the course of living. In addition, it protects you from financial duress by paying for any bodily injury or property damage for which you are liable. In case of a claim against you, your insurer will act on your behalf by negotiating a settlement, defending you in court and paying any judgments against you. If you finance your home, the bank may require you to insure it for at least the amount of your home loan. However, most NC insurance policies require coverage of at least 80 percent of the home's replacement value.
Many types of homeowners policies are available, so examine offerings closely to determine which policy type best suits your needs. Most companies in this state offer the following types of coverage:
◦Special Form (HO-3)—covers a single-family dwelling or townhouse against all risks except those specifically excluded.
◦Homeowners Contents Broad Form (HO-4) —provides coverage for a renter's personal property, but not the building itself.
◦Homeowners Unit-Owner's Form (HO-6) —covers a condominium owner's personal property, as well as any portion of the building he or she owns.
◦Homeowners Modified Coverage Form (HO-8) —insures the structure of an older home based on actual cash value.
North Carolina homeowners insurance premiums can vary greatly. Several factors influence how much your premium costs you. These include: ◦Type of construction: Your home's ability to withstand or minimize loss has an impact on your premium. In addition, frame houses usually cost more to insure than brick houses. ◦Age of your home: New homes may qualify for discounts. Some companies are hesitant to insure very old homes. ◦Location: Urban areas have higher crime rates than rural areas, and rural areas tend to have fewer resources for fire protection. Both of these issues can affect your premium. ◦Deductibles: The higher your deductible, or the amount you pay before the insurance company begins paying, the lower your premium. ◦Amount of coverage: The amount of home insurance you purchase helps determine premium rates. ◦Additional coverage: Any extra coverage or additional coverage types you add beyond required state minimums raises your premium.
Life Insurance
Life insurance is a substantial investment in the lives of both you and your loved ones. Cost can be significant—but benefits can be crucial. Selecting the life insurance policy best suited to your needs requires four steps: deciding how much life insurance you need; how much you can afford to pay; the type of policy providing you the broadest, most-needed coverage; and the amounts various life insurance companies charge for that type of policy.
Life insurance is available in your state in three basic types:
◦Term life: Purchased for a specific time period. Benefits are paid only if you die while the policy is in effect. Generally cheaper than whole life insurance, and usually more practical for those who need a large amount of coverage. Premiums may change each time the policy is renewed. May be "convertible" to a whole life policy. Provides the most death protection for your money.
◦Whole life: Provides lifetime coverage and accumulates cash value over time. Premium rates remain stable as long as the policy is in effect. Can cost significantly more than term insurance.
◦Endowment: Pays you a predetermined sum of money if you live to a certain age. (If you die before then, the death benefit is paid to your beneficiary.) Cost is higher than for comparable amounts of whole life insurance. Provides the least amount of death protection for your dollar.
We can explain these characteristics further and help you determine which type of life insurance is appropriate for you. Meanwhile, follow these guidelines to ensure a comfortable purchasing experience and to best maintain your new life insurance policy:
