Gwinnett Daily Post

In Georgia it is mandatory to have auto insurance if you would like to drive. Since its mandated by law almost everyone carries insurance for there vehicle, however how many of us know all the insurance terms?

Today I am going to demystify few terms for average Joe.

Insurance: Transferring pure risk (no gain) from an individual to the group. Insurance company charges small premium to every individual in return for assumption of future risk.

Insurer: The insurance company assuming risk and agreeing to pay claims or provide services.

Negligence: Failure to use that degree of care that an ordinary person of reasonable prudence would use under the same given circumstances. Negligence may be constituted by acts of either omission or commission or both.

Liability limit: This is mandatory coverage that every driver must carry in order to be compliant with Georgia law. The minimum limit that one must carry is 25/50/25. All other insurances are optional and insured may choose if he would like to purchase it.

So what does that 25/50/25 mean?

If you are involved in the accident then your insurance company will pay the other injured party up to $25000 per person if court finds that you are the negligent party in the accident. If there are multiple people injured then your insurance company will pay up to $50000 (aggregate limit) per accident. Important part to remember that it does not cover your own injury. In order for you to pay for your injury you must have medical coverage on your insurance policy.

Medical coverage: This is no fault coverage. It pays for the medical expenses.

Uninsured/under insured motorist coverage: This part covers your injury in the event that other party involved in the accident does not have any insurance or they are under insured. Lets assume that your medical bill is $45, 000 and negligent party has insurance limit of $25000 then your own insurance will cover your medical expenses of $20,000 that other insurance did not cover.

Actual Cash Value (ACV): The cost to replace an item of property at the time of loss, less an allowance for depreciation. Often used to determine amount of reimbursement for a loss (Replacement Cost minus Depreciation). This is very important. The insurance company will pay for only ACV for your auto.

Adjuster: Represents the insurance company and acts for the company in working on agreements as to the amount of a loss and the liability of the company.

Usually your insurance agent goes over your policy and make suggestion if you are adequately covered. Usually your agent will do your annual insurance review to make sure that nothing has changed about your insurance needs. Remember that you are liable for all the expenses of the other party if you are involved in the accident. If you are not adequately covered than attorney will come after your personal assets.

The author Mehul Raja is a licensed agent for American Family Insurance. If you have any question about your current policy or you would like free insurance review please contact him at mraja@amfam.com. You can also call me @ 404-200-7800. His website is www.mehulraja.com>

American Family Insurance began on Oct. 3, 1927, when insurance salesman Herman Wittwer opened the doors of Farmers Mutual Automobile Insurance Company in Madison, Wis. At the time, the company's only product was auto insurance and its target market was farmers. Wittwer believed farmers presented lower risks than city drivers because they drove less often and not at all in the winter.

Mehul Raja American Family Agent 1854 Shakleford Ct Norcross. GA.30093 404-200-7800 by amfamagent

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