Insurance FAQs: Insurance 101

Insurance is something we all need, but it can be confusing, and the options can seem endless. Whether you’re an insurance novice or a seasoned policyholder, you likely have some burning questions about how it all works, what you’re really paying for, and what insurance you might need.

Experienced Texas Farm Bureau Insurance Agents help answer the insurance FAQs that come their way most often.

Q: How does insurance work?

A: An insurance policy is a contract that transfers the risk of financial loss from the policyholder to the insurance company – as long as you continue to pay your premium. This coverage helps protect the policyholder’s finances should a loss occur. It’s unlikely that every policyholder with an insurance company will have a loss at the same time. This allows insurance companies to pay for policyholder losses from a pool of money sustained by premium payments.

Q: What is a deductible?

A: An insurance deductible is the amount you pay before your insurance coverage kicks in. Suppose you get into a car accident where the damages total $2,500. If your deductible is $500, you’d pay that amount first. Then, your insurance provider would take over the remaining $2,000. No matter what type of policy you have, it’s essential to have the right amount of insurance, so you’re not left with the full balance. There’s no magic number when it comes to deductibles, as each person’s needs are different. Your Agent can help you determine the right amount of insurance coverage for your needs.

Q: How do I buy insurance?

A: There are several ways to buy an insurance policy these days. But having someone on your side who understands the insurance industry — and your unique needs — is one of the most important steps in the buying process. An experienced, compassionate Texas Farm Bureau Insurance Agent can help determine your insurance needs and how to best cover them.

Q: What policies do I need?

A: There are several different types of insurance policies — auto, property, farm and ranch, commercial, and life — and they all do different things. Of course, your individual needs will determine which policies you need. Here’s a breakdown of the types of insurance policies and what they cover:

• Auto: This coverage helps protect you from a financial loss in the event of an accident. There are different kinds of auto insurance coverage. Comprehensive coverage protects you against non-collision accidents, theft and vandalism, and “acts of God.” Collision insurance helps repair your car after a crash. There are other optional coverages that cover different things ranging from roadside assistance and  medical payments.

• Property: If your home is damaged or burglarized, this type of coverage helps provide a financial reimbursement for repair or replacement. Your Agent can help you figure out the type and amount of property insurance you need.

• Farm and ranch: The Texas AgAdvantage policy allows farmers and ranchers to protect their livelihoods. Policyholders can combine coverage and add employers’ liability for farmhands.

• Commercial: Small business owners have a different set of needs from the average policyholder. You want to ensure that everything, from company vehicles to your building, is covered properly.

• Life: Nearly everyone can benefit from life insurance, and there are several types to choose from, including whole life, term life, and convertible life. Your Agent can walk you through what the different types offer to help you decide what might be the best fit for your needs.

Q: How do I file a claim?

A: If you think you might need to file a claim, give your Agent a quick call for guidance. Then, you can file the claim by phone at 1.800.224.7936 or online. You’ll need to provide a brief description of the event and your policy number. Once it’s in motion, your Agent will receive emails about your claim and the assigned adjuster, who will call you within 48 hours. The adjuster will work through the expenses associated with your claim. Once your claim is settled, you’ll receive payment. (Some claims are settled within days, while other may take a month or two.)

Q: How often should I update my policies?

A: Ideally, you should assess and update your policies on a yearly basis. This effort can save you money in the long run. You’ll find any coverage gaps, but you’ll also see if you’re paying for something you no longer need. Ask your Texas Farm Agent about a 360 Review, which is a systematic look at all your insurance policies and an analysis of any life changes that might impact them.

Get All Your Insurance FAQs Answered

If you’ve got more insurance-related questions, schedule a 360 Review with your Agent. You’ll get one-on-one time with your Agent, who can help you take inventory of your life and assets to assess your insurance coverage needs. Before you go, make sure you know the right questions to ask.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation.