A Primer on Insurance Premiums

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Insurance is not always thought of in a positive way, and my passion has been to change that perception. As a former agent and in my current role with Farm Bureau, education has always been a priority. I do understand that the industry is not perfect, but if you picture a world without insurance when disasters hit, how would all the pieces be put back together? Many of us reluctantly pay for insurance on a regular basis and do so without fully understanding the promise behind the premium.

A big misconception in the industry is that insurance policies cover everything, but those policies do not exist. When you consider that we are rarely excited about the rates we pay for insurance, imagine what a policy would cost that actually did cover everything. To try to put things in perspective, insurance is designed to cover large losses and catastrophic events, but not so much the minor things or routine maintenance.

The term “full coverage” often creates confusion. One reason is that every policy has exclusions, or things that are not covered by the policy. Secondly, the phrase is often misinterpreted. To some, it means getting just the coverage required by law or what is needed to meet the requirements of a mortgage lender on a home, or the lienholder on a financed vehicle. From an insurance agent’s perspective, “full coverage” means you want every endorsement added to your policy to give you the absolute broadest coverage available. Both perspectives result in very different premium charges as well as policy coverage when a claim occurs.

So, what are you getting for the insurance premiums you are paying? With Farm Bureau, you get an insurance policy that essentially states what is and what is not covered when accidents occur or disasters strike. Declarations pages are sent out each time your policy renews, listing an overview of the broad coverage and their associated premiums for you to review. We pride ourselves on providing outstanding claims and customer service. Farm Bureau has local agents that welcome the opportunity to meet with you to design an insurance plan tailored to your needs and provide you with a better understanding of what you get for the premiums you pay.

– Allan Williams

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