Insurance 101
RMIS - ROBERT MORENO INSURANCE SERVICES

INSURANCE 101:
Whether you are a new professional to the insurance industry or a young insured, at RMIS, we understand that the insurance world may seem like a foreign language sometimes. We would like to offer you our resources to help answer your questions and assist you in your insurance sales or purchases.

PERSONAL AUTO POLICY (PAP)
Why do I need auto insurance?
If you are driving you are required by California State laws to be financially responsible. This requirement is best satisfied through your insurance coverage.
Auto insurance protects your investment and guarantees you a way of coping with the expense of accidents, vandalism or theft, as well as securing your financial responsibility to the bank or other institution lending the money to buy your vehicle. Insurance offers you the peace of mind and helps you live up to that financial responsibility by ensuring your ability to cover the costs of potential damages or injuries.

What coverage do I need?
In California, at minimum, you need liability insurance to register and operate a vehicle. Depending on your needs, you should always consider purchasing enough coverage to protect all of your assets and ensure that you can be financially responsible if you injure someone in an accident. You may also want the added coverage of a Personal Umbrella Policy. (Excess Liability) depending on your assets and need for coverage.

Bodily Injury Protection (BI)
Protects you against financial loss if someone is injured or killed by your auto and you are found responsible. Your legal expenses and court costs would also be included for a covered suit, as would your bail bond expenses.

Property Damage Liability (PD)
Covers you against financial loss if you are found liable for damage to other people's property caused by your auto.

Collision and Comprehensive Coverage
Collision - Pays the actual cash value of damages to your covered auto (up to the auto's actual cash value) caused by an impact with another vehicle or object. The amount of your deductible will be subtracted from any settlement. You may want to consider this coverage if your auto is seven years old or newer.

Comprehensive - Pays for losses to your covered auto (up to its actual cash value) which are not caused by collision. This includes damage caused by fire, theft, glass breakage, riot, windstorm and hail. The amount of your deductible will be subtracted from any settlement.

Deductible
Amount you pay out of pocket before the insurer covers the expense in the event of an accident. Just remember the higher the deductible the lower the premium.

Medical Coverage
Pays up to your policy limit for reasonable medical expenses incurred within three years of an accident. Medical payments Coverage applies to everyone in your auto.

Uninsured Motorist Coverage (UM)
Pays damages to YOU for bodily injury or death caused by an uninsured driver or hit and run driver who is legally responsible for the accident. Uninsured Motorist coverage protects you and anyone riding in your vehicle if you are involved in an accident with someone who has no insurance. Even if your state requires insurance coverage, there are those who ignore the law. Should you be injured due to someone else's irresponsibility, Uninsured Motorist will cover your medical expenses up to the limit on your policy.

Underinsured Motorist Coverage (UIM)
Protects the insured against drivers who have auto liability but who have inadequate coverage limits for a loss they have caused. Limits are typically the same as the insured's liability limits.

Road Side Assistance
We offer National Safe Driver (NSD) membership to all of our auto policies. Ask your producer about adding NSD to your existing RMIS auto policy.
If you would like to add or increase any of these coverages above and you are a RMIS insured, please click here for further instructions.

How are insurance rates set?
All insurance companies use actuary science to set the premium by assigning each risk with a number. Applicable factors are taken into consideration and vary depending on the type of risk the company is insuring.
  
What is GAP insurance?
GAP insurance pays the difference between the amount your insurer pays for your totaled car and the amount you owe on your lease or loan.

What is CAARP?
California Automobile Assigned Risk Plan (CAARP) provides a source of auto Liability, medical Payments and Uninsured Motorist insurance for vehicle owners and drivers who cannot obtain coverage in the voluntary market. Coverage is available for personal and commercial auto exposures.
Already insured with RMIS? Please ask your producer about our other programs.

HOMEOWNERS/DWELLING
Why do I need a Homeowner Policy?
Homeowners insurance protects you against the uncertainties of life. For most people, homeowners insurance is a low cost investment that goes a long way protecting your most valuable asset as well as you, the members of your family and your household possessions.

Imagine if you were to lose your home suddenly due an unforeseen event such as a fire or other peril or have the contents damaged or stolen, like most of us, you probably could not afford to replace everything all at once. And if somebody sued you for an injury or damage caused by you or your property, the price of defending that suit could run into thousands of dollars in legal fees alone and you could be forced to dip into your assets (your home) to pay off the costs.

A homeowner’s package policy protects you from these situations and gives you the peace of mind that you deserve. 

In addition, for mortgage reasons, you are also require by financial lenders to purchase homeowners insurance. Mortgage companies require an insurance policy to protect that investment.

What is the difference between a Homeowner Policy and a Dwelling Fire Policy?

Homeowners: Dwelling:
More coverage and more expensive than Dwelling Fire Less coverage - Great for rental properties
Covers the dwelling for all risk except those excluded Do not require owner to live in the house
Liability is always included Usually for secondary homes or seasonal homes
Personal property is included and covered on a worldwide basis Renting to other is permitted
Owner must reside in home Liability is an optional coverage
Theft is not covered peril

What is covered in my homeowner's policy?
Your homeowners insurance is vital because it protects what is probably your greatest investment. The following coverage definitions should help you to better assess your homeowner's policy. Please be sure to consult your insurance company representative to assure that you have the right coverage for your individual needs.

Dwelling Coverage:
Protects your actual home itself. The dollar amount carried to cover your home and any structures attached directly to it. Ideally, the amount of coverage you carry should equal the cost of rebuilding your home after a total loss. This coverage does not apply to land, including land on which the dwelling is located.

Other Structures Coverage:
Protects other structures set apart from the dwelling on the residence premises, such as a detached garage. This coverage applies up to the limits provided in your policy and can be increased if necessary.

Personal Property Coverage:
This coverage provides worldwide coverage for personal property owned or used by the insured.

Loss of Use:
This coverage is available when you cannot live in your home due to a covered loss. It pays living expenses which go over and above your normal living expenses up to the limit provided in your policy.

Personal Liability/Coverage:
Covers risks for the insured and family members living with them related to the described premises and to the personal activities of the insureds on or off the premises. Protects and provides for your legal defense against a liability claim--whether the claim is legitimate or not and it will pay any court judgments against you up to the policy limit.

Medical Payments:
This pays emergency medical bills for anyone injured on your property or any injury caused by a member of your family or a pet, regardless of where it happens. All bills are paid, up to your policy limit, whether or not you're legally responsible.

Homeowner policies have many other optional features available to you depending on your individual needs. These include earthquake and scheduled personal property coverage.

The program features or coverage descriptions above are general and for information purposes only. Please review your policy's terms and conditions carefully for actual claim coverage in the event of a loss.

HOMEOWNER/DWELLING DEFINITIONS:
( PRODUCERS, THE FOLLOWING SHOULD HELP YOU QUOTE AN HO/DP POLICY.)

Bodily Injury
Physical harm to the body

Dwelling Structure
Refers to the insured dwelling and attached structures.

Dwelling Value
The actual replacement cost of the dwelling of like and kind.

With RMIS Topa protection, extended coverage can be selected up to 120% of actual replacement cost.  This value can be adjusted annually at renewal with added appreciation.

Type of Construction:
What the dwelling is made out of.


Appurtenant Structures
 Other buildings on the same premises as the residence.
Ex: detached garage, fencing, gazebo, detached workshop, etc.

Roof Type

Personal Effects
Another term for personal property owned or used by any insured while it is anywhere in the world.

Protective Devices
Refers to Fire Alarms and Anti-Theft Alarms. Premium discounts are given for these protective devices.

Modify Deductible
Some companies give discounts if you decide to choose a higher deductible.
RMIS Topa's standard deductible for Homeowner and Dwelling Fire is $500. Choosing a higher deductible would give a maximum of 15% (max. $300) discount from the premium. (Click here for other RMIS Topa discounts)

Alarms (Fire and Theft)
Local: On premises but do not include monitoring. A good example would be your smoke alarms, it just makes a warning sound or flashing lights for local alert or signaling.

Station: On premises and in case of emergency it connects directly to Fire or Police departments
Central: On premise and it connects to a 24-hour centrally monitored station which then notifies you as well as the appropriate authorities.

Homeowner Optional Coverage


Persons Insured

Occurrence
An accident, including exposure to conditions, which results, during the policy period, in: a) bodility injury; or b) property damage.

Property Damage
Physical injury to or destruction of tangible property, including loss of use of this property. Property damage does not include theft or conversion of property by an insured.

Water Damage
Refers to direct physical property loss caused by the sudden, immediate and accidental escape of water from an actual breaking apart of a plumbing system, heating or air conditioning system or from within a household appliance.

The California FAIR Plan
Creates a pool of risks to provide fire and extended coverage insurance to individuals unable to obtain coverage through regular channels, mainly due to environmental hazards. This plan primarily serves brush hazard areas and inner cities.

**RMIS Topa Additional Coverages include:

 **(Terms and conditions apply. Please refer to policy manual for details.)

INSURED'S DUTIES AFTER A LOSS
After a loss occurs, the insured must:

COMMERCIAL AUTO
In general, a Commercial Auto policy offers both physical damage and liability coverage just as personal auto. The term "auto" refers to private passenger automobiles, trucks, and trailers. Coverage and restrictions apply depending on the kind of commercial vehicle.

What am I looking for in commercial auto insurance?
Just like auto insurance, commercial auto policy offers Liability and Physical Damage (Collision, Comprehensive) coverage. Rental Reimbursement Coverage is usually included to help cover the cost of a replacement vehicle for a specified period of time when your vehicle is disabled due to an insured loss.

Individual Named Insured Endorsement
Used when the named insured is an individual rather than a corporation or a partnership.

Medical Payment Endorsement
Pays the necessary cost of medical and funeral expense resulting from an accident.

Uninsured Motorists Endorsement
Provides additional coverage to protect the insured from uninsured motorists.

**Specific terms and conditions are applied to individual company. Please refer to your policy jacket.

Click here for a full list of RMIS covered Commercial Vehicles.
Producers,
Check out RMIS' user friendly online Commercial Auto Rater with Sutter

More Definitions:
General Business Auto Policy
Used to insure commercial autos for all types of businesses except garages, truckers, and motor carriers.

Trucking/Trucker's Coverage Form
Specifically applies to businesses that are hired out to transport goods of others. Specific and unique consideration by the trucking industry applies. This is a separate form because truckers have different exposures that other auto risks don't have.

Inland Marine/Cargo Coverage
Inland Marine Coverage is for transportation of goods from one location to another. Cargo Coverage is insurance for the goods. Both are available with trucking policies.

Coverage Symbols
Refers to the numbers used to rate the commercial auto policy. This is used to tailor coverage to the needs of the insured.

Personal Umbrella
What is an Umbrella Policy?
Umbrella coverage pays for losses over and above the liability limit of an underlying policy of policies such as homeowners and auto insurance. Umbrellas provide high dollar limits and broader coverage than the primary coverage to insure catastrophic losses.

Do I really need an Umbrella Policy?
Take a moment to calculate your assets: home, auto, businesses, boats, valuable personal belongs, etc. An umbrella policy extends the coverage on your existing polices. If your assets are greater than the total liability limits on your active policies, you should consider purchasing an umbrella liability plan to supplement your coverage. 

CPL/OL&T
What's CPL/OL&T?
Coverage for stand-alone personal liability usually a last resort for applicants through California FAIR Plan. CPL provides personal liability coverage for the individual and family needs arising out of numerous personal activities and situations, such as the ownership of residential property, ownership of pets, sports activities, and many other everyday activities.

HOME BUSINESS INSURANCE
If you have a home based business you could be exposed to a number of liabilities and losses. Ask your producer about getting coverage.  RMIS' Home Business Product is designed for small home based business with exposures that are either limited or excluded by the ISO Homeowners Product.

SPECIAL ONE DAY EVENT COVERAGE
Coverage pays for general liability and host liquor liability for one day events. Terms and conditions apply. RMIS offers a One Day Event Coverage through USLI.

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