Insurance coverage is the amount of risk or liability provided for an individual, or entity, by their insurance service. An insurer issues this coverage in the event of an unforeseen or unwanted incident that is covered by the policy. Types of coverage range from auto and life insurance to homeowner, rental, and pet insurance. In addition, federal and state insurance programs provide their own benefits in the form of social security, social security disability income, workers’ compensation, and unemployment insurance, to name a few.
All insurance policies must be read as carefully as possible because it is the small print that determines coverage. Understanding the details of your plan can help you take maximum advantage of the provided benefits. This can be especially beneficial in the case of medical insurance, since even non-traditional services such as acupuncture may be covered by certain health plans.
States differ in their required types and monetary amounts of insurance. Auto insurance provides an example. Most states require vehicle drivers to carry bodily-injury liability. This covers medical treatment, rehabilitation, and funeral costs incurred by passengers, other drivers, and their passengers. But state limits can often be too low to protect the assets of most motorists, and an insurance carrier may recommend the purchase of more insurance coverage per person and per accident.
While an insured may seek additional insurance coverage, other types of insurance may not be as necessary. For example, medical-payment auto insurance, which covers the deductibles and co-payments not covered by your health insurer, may not be useful unless you have high health-insurance deductibles, assuming you have health insurance. Again, some states may require medical-payment liability, and in this case, it may be wise to buy the minimum.
Homeowners’ insurance is an example in which the required insurance coverage may be too minimal. Lenders typically require homeowners to purchase homeowners’ insurance. This coverage includes “hazard insurance” for unintentional damage or destruction by fire, smoke, wind, or another similar event. But as the homeowner, you may choose to buy additional, comprehensive homeowners’ insurance, including liability and complete hazard coverage. This would be more than your lender may require, but it provides more protection for your house as well as personal liability.
Disputes about insurance coverage may involve the denial of a claim for a service already received, or they may involve a partially paid insurance claim. Insurance adjusters, who are typically the contact person at an insurance company, may be willing to adjust the payment of a covered claim after informal negotiations. Legal resources also may be available, including filing a complaint with the state department of insurance. Simply filing this complaint may provide an incentive for the insurance company to heed your request.
Complex conflicts can arise at every stage of an insurance coverage dispute. However, both parties to an insurance contract are required to act in good faith, fulfilling their contractual obligations. If this does not happen, there may be an underlying breach of contract lawsuit.
