You pay premiums to an insurer so it will provide coverage and pay claims. Usually you pay them yearly, every six months, or monthly. Some insurance companies offer discounts if you are willing to pay in full.  The words rate and premium mean the same thing.

Premiums are the money the policyholder pays for insurance. The insurer must pay the death benefit when the insured dies if the policyholder pays the premiums as required, and premiums are determined in part by how likely it is that the insurer will have to pay the policy’s death benefit based on the insured’s life expectancy.

You buy property damage coverage so it will pay out if your car damages another person’s vehicle or property. Actually, some people buy it so it’ll protect them from lawsuits related to the same. Don’t be shocked if your insurer doesn’t offer this legal coverage, though. Not all companies do.  Anyway, every state that I am licensed in requires drivers to carry a certain amount of property damage coverage. Some of those minimums are low because they were set decades ago, however, so keep that in mind when you shop around.

Protective devices is a discount that you can get on your home policy if you have deadbolt locks on all of the outside door, a smoke detector on every floor, and a fire distinguisher. This discount is not to be confused with an alarm system which will be discussed somewhere else on the website.

Replacement Cost is the insurance coverage that pays to replace damaged or destroyed belongings or property with new belongings or property. Replacement cost coverage is more expensive than actual cash value, which is the value of the item when it was new minus depreciation. Depreciation includes the age of your home or item and the condition that your home or item was in at the time of the loss.

Policy issued to insure a residential condominium building and all units within the building, provided that the building is located in a Regular Program Community and at least 75 percent of the total floor area is residential. Special Flood Hazard Area (SFHA) – A FEMA-identified high-risk flood area where flood insurance is mandatory for properties. An area having special flood, mudflow, or flood-related erosion hazards, and shown on a Flood Hazard Boundary Map or a Flood Insurance Rate Map as Zone A, AO, A1-A30, AE, A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1-A30, V1-V30, VE, or V.

Term life insurance lasts a certain number of years, then ends. You choose the term when you take out the policy. Common terms are 10, 20, or 30 years. 

I get more questions about trees throughout the year than anything else. If your neighbor’s tree falls into your yard and does not damage anything in the process, you are responsible disposing of that tree. Not your neighbor and not the insurance company. If a tree falls from your neighbor’s yard or your yard and hits your house or fence, then the insurance company will get involved. The bottom line is that you are responsible for any tree on your property whether it is yours or someone else’s.

Uninsured motorist coverage comes in two forms. One is Bodily Injury, which covers you and your passengers if an uninsured driver hits and injures you. Another is Property, and it covers you if an uninsured driver hits and damages your car.  Not convinced you need it even after reading all of the above? Consider that an estimated one in seven U.S. drivers doesn’t have car insurance.

A type of permanent life insurance with a cash value component that earns interest, universal life insurance has premiums that are comparable to term life insurance. Unlike term and whole life, the premiums and death benefit can be adjusted over time.