Preferred Financial Group

"We listen, we educate, then we perform like no one else in the industry."

Examples

 

Below is a sample Auto Insurance Policy

used to illustrate how an auto claim might be viewed and settled by the insurance company.

 

Example #2

      • What Happened?:  The insured’s daughter was texting when she crossed a double line and hit another car head-on.
            • Insured’s car was “totaled”.
            • The other car was “totaled”.
            • A passenger in the insured’s car suffered injuries of $7,500.
            • The driver of the other car was seriously injured and in a law suit was awarded $750,000 by the court.
      • What Was Covered?:
            • The insured’s car was valued at $35,000 and was covered under Collision for the full amount minus the deductible ($35,000 - $1,000 = $34,000)
            • The other car was valued at $20,000 and was covered under Property Damage Liability for the full
            • amount.
            • Medical expenses for the passenger were covered under Medical Payments up to the limit of the policy of $5,000. This left a balance of $2,500 which became the responsibility of the insured.
            • The court award of $750,000 was covered under Bodily Injury Liability up to the limit of the policy of $500,000. This left a balance of $250,000 which became the responsibility of the insured.
      • Explanation: In this example, the coverage provided was substantial but the insured was still held personally liable for the deductible of $1,000 as well as the excesses of $2,500 and $250,000 beyond the policy limits for Medical Payments and Bodily Injury Liability respectively.

 

If the insured had a $1,000,000 umbrella policy it would have covered all but the $1,000 deductible saving the insured $252,500. The cost for a typical $1,000,000 would be approximately $250 per year.