What is insurance?
According to Webster’s New Standard Dictionary of the English Language, insurance means “secure against losses”.  At Ames Insurance Center, we know that insurance is not that simple and can be confusing.  One of our goals is to make the insurance process easier for our customers.  Listed below are common insurance terms to help you understand and become more comfortable with your insurance program.

Additional Living expenses
If you cannot live in your home because of a covered loss, the policy will pay for additional living expenses while your home is being rebuilt or repaired.

Bodily injury liability and property damage
This covers your legal liability, up to the limits you select, for damages caused in a covered vehicle accident. If your insurance company covers an accident for which you’re sued, a lawyer will be paid to defend you.

You choose your liability limits as either split limits or a combined single limit. Split limits divide bodily injury liability limits per person and per accident. (For example, $100,000/$300,000 means that a company will pay up to $100,000 for bodily injury liability per person in a covered crash and up to $300,000 per crash.)  For property damage, your insurance company pays up to the limit you select per accident. Combined single limit combines your liability coverage into one total limit per accident.

Car rental reimbursement
This covers the cost of a rental car while your vehicle is being repaired as a result of a covered loss.

Collision
This covers expenses to repair your vehicle when it has been damaged due to an accident.

Comprehensive
This covers damage done to your vehicle other than collision, such as vandalism or theft.

Deductible
The amount that you pay out of pocket toward a loss. This amount is paid first, before your insurance policy provides coverage.

Medical (coverage on your homeowners or renters policy)
This covers medical expenses for guests if they are injured on your property.

Medical payments (on your auto policy)
This covers medical expenses for you and your passengers that result from an accident.

Personal Liability
This applies if someone is injured or property is damaged and you are to blame. 

Personal Property
The property that you own that is not attached to the structure you live in such as clothing, furniture, and appliances.

Property/Dwelling Amount
The amount of insurance that is placed on the property, usually the estimated cost to replace the property.

Replacement Cost
The amount it would cost to replace lost, stolen or destroyed property at current market price.

Roadside assistance
This covers labor costs incurred at the place where your vehicle becomes disabled as the result of a mechanical breakdown such as a dead battery or flat tire. It also covers towing – usually up to a specified limit such as $100.

Scheduled Personal Property
This coverage allows a policyholder to have additional coverage on specific items such as jewelry, guns, fine arts, cameras or computers.

SR-22
This is simply proof that you have insurance. It is a filing that your insurance company provides to the state on your behalf. The state usually requires such proof in the event of a serious violation or numerous tickets in a short period of time.

Uninsured motorist and underinsured motorist
This coverage pays for damages that you are legally entitled to recover for your bodily injury. In general, this coverage provides what you would have received from the other person’s insurance company if that person had insurance. This coverage may also protect you if the person who caused the damage does not have enough insurance.