CHAPTER 2
STANDARD COVERAGE
HORROR STORY: MOTORCYCLIST’S MEDICAL BILLS Bill was riding his motorcycle when he was hit by a distracted driver, Jon, totaling his $18,000 motorcycle and, even worse, causing serious physical injuries that wound up costing $87,000. Jon had insurance, but his property damage limit was $15,000, and his bodily injury limit was $50,000. This meant Jon had to come up with $40,000 to pay for the rest — $3,000 for the motorcycle and $33,000 for medical expenses. So not only do you need the right kind of insurance, but you also need to make sure your limits are high enough. What kind of insurance would cover these items and more? Read on to find out.
You now know the policy is the contract between you and the insurance company, but what exactly is in it? The first item is the declarations page . This includes all of the basics: your name and address, the policy’s time period, your premium amount, and the coverages included in your policy and each coverage’s limit per claim. The core of the policy is the insurance agreement , in which your insurance company agrees to make payments, where appropriate —either to you or on behalf of you. It also details the people who are covered by the policy, definitions of terms within the agreement, and any exclusions.
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