Insurance Coverage
Insurance is a contract between the insured and the insurance company to provide for financial assistance and “coverage” in the event that certain conditions (often times injuries or disabling events) take place. In exchange for this “coverage”, the insured pays the insurance company a set premium every month, quarter or year that is theoretically considerably less than the anticipated cost to the insured if the condition does take place. If the insured is unfortunate enough for the triggering condition to take place, then the insurance company is bound by the contract or “policy” to either pay the insured or pay the injured party on behalf of the insured for the damages incurred or sustained. Because insurance is a contract, when, why and how much is paid out is largely dependant upon what is contractually agreed upon.
There are a number of different types of insurance coverage that may be applicable when an individual suffers an injury depending upon where, when, how and to whom the injury is suffered. Below is a list of common types of insurance coverage and a general explanation of when they may be applicable.
1. Automobile Insurance:
Car insurance is required by law for anyone wanting to register a motor vehicle in the state of Iowa. There are different levels of car insurance and policies that cover different things.
A. Liability:
Liability insurance is the only insurance required by Iowa law. According to Iowa law all vehicles must be covered by a minimum of $25,000 in liability insurance. Liability insurance only covers damages caused to others by the driver of the insured vehicle. It does not cover property damage or injuries to the driver of the vehicle at the time of the accident.
B. Bodily Injury:
Covers bodily injury to occupants of your vehicle as well as the other vehicle if you are determined to be at fault. This will often times be reflected in a per person and per occurrence limit. For example if one has a 100,000/300,000 policy limit that means that the insurance company is contractually obligated to pay damages up to 100,000 per individual injured in the accident but not to exceed 300,000 if multiple people are injured.
C. Collision:
Collision insurance covers damage to your vehicle even if you are at fault for the accident. You pay the deductible and the insurance company is contractually obligated to pay the remainder of the cost to repair the vehicle. However, if the vehicle is deemed “totaled” the insurance company often has the option of paying you the fair market value for the vehicle at the time of the accident as opposed to repairing the vehicle to the same condition it was in prior to the accident.
D. Comprehensive:
Comprehensive insurance includes all three of the previously described types of insurance. You are covered for injuries sustained to yourself and others in the accident if you are at fault and so is your vehicle.
E. Underinsured:
Underinsured insurance coverage is in addition to any comprehensive plan that one may have. It covers you if your damages exceed the policy limits of the at fault party. For example, if your damages are in excess of $150,000 but the other party only has the minimum insurance required by law, there is another $125,000 in damages that needs to be covered. This is where underinsured insurance coverage kicks in and your insurance would be required to cover the excess damages up to the amount of your underinsured policy limits.
F. Uninsured:
In the unfortunate event that one is injured by one of the many uninsured drivers on the road today, uninsured coverage is designed to cover those damages. Again, the insurance company is only obligated to pay up to the policy limits if and when appropriate.
2. Health Insurance:
Health insurance covers “necessary” and “routine” medical expenses up to a certain amount. While it may cover medical expenses for injuries suffered in an accident, it does not and will not provide coverage for pain and suffering, loss of income, loss of function, “cosmetic procedures” or other related damages that do not fall within the strict definitions of medical care as provided by the policy.
3. Home Owner Insurance:
Homeowners insurance is primarily viewed by many to cover the owner of a home in the event that something bad happens to the person’s property within the residence. However, many home owner insurance policies also have a personal liability clause that covers the homeowner in the event that they are found liable for injuries caused to another person on their property or at other times away from their property. The majority, if not all of these policies have exclusions for intentional acts though. These are the policies that most often compensate victims of dog bites or other injuries such as slip and falls that occur at the residences of other people.
4. Disability Insurance:
Disability insurance is designed to compensate an individual in the event that they suffer an injury or medical condition that renders them physically or mentally unable to work. There are a number of different types of disability insurance policies and the definitions of disability vary greatly from company to company and from policy to policy. This would be the type of insurance that would ordinarily provide a monthly income, albeit on a scaled down level, in the event that an individual suffers a serious and permanently debilitating injury and can no longer work. This may be the most overlooked type of personal coverage insurance that most wish they had after it is too late.
5. Life Insurance:
Provides compensation to the deceased individual’s family or other beneficiary upon death.
6. Umbrella:
These policies ordinarily cover both damages resulting from conditions on property, car accidents or any other damages caused by the insured. Often times these policies have larger limits such as $1 Million or $2 Million dollars and will only be permitted if the insured also has higher policy limits on both home and car insurance. We like when defendants have umbrella policies.
7. Business:
Business insurance works much the same as home owner insurance, covering the business entity for injuries caused by the negligent acts of the business or employees or agents in addition to other coverage.
