Coverage Cheat Sheet

Our job is to advise and educate. We can't properly do this, unless we are fully educated ourselves. Below is a list of coverages you need to know and understand.

Remember: if you are ever unsure, it's okay to say "Let me confirm that for you and I'll get back with you".

Broaden Your Insurance Knowledge Below

Auto Insurance Coverage

Home Insurance Coverage

Umbrella Insurance

Auto Insurance Coverage

Liability coverage pays for property damage and/or medical injuries (of other people, not you) that were caused in an accident in which you were at fault. 


Example: You are driving down the road, not paying attention and rear-end someone at a red light because you didn’t stop in time. The person in the car you hit must go to the hospital with medical injuries, and their car is damaged and needs repairs. Liability coverage is designed to cover the medical injuries and property damage.  

Link to video explanation

Medical payments coverage helps pay for medical costs if you or your passengers get hurt in a car accident, regardless of who was at fault. 

Example: You’re driving down the road, not paying attention, and you rear-end another vehicle. It’s your fault. You have medical injuries. Your liability coverage doesn’t cover you (see above) or your medical injuries, but medical payments would. It would cover you because with medical payments, it doesn’t matter who is at fault.  

Link to video explanation

This coverage helps pay for your expenses if you get hit by a driver who either doesn’t have insurance or doesn’t have enough insurance to cover the medical damages they caused. 

Example: Imagine you’re stopped at a traffic light and a car crashes into the back of yours. You have significant medical injuries. Later, you find out that the driver who hit you doesn’t have car insurance. UM/UIM coverage would help pay for your medical bills. 

Link to video explanation

Comprehensive coverage pays for damage to your car caused by things other than collisions, like theft, fire, or natural disasters. 

Example: One night, a big storm hits your area and a tree branch falls on your car, breaking the windshield and denting the hood. Comprehensive coverage would help pay for the repairs from this kind of damage. 

Link to video explanation

Definition: Rental car coverage helps pay for a rental car if your car is in the shop because of an accident covered under your policy. 

Example: After the accident where you hit the parked car, your car needs to stay at the repair shop for a week. Rental car coverage would help cover the cost of renting a car during this time so you can still get around. 

*Note: this only applies to a covered accident. You can’t get a rental car just because you want one for vacation.  

Link to video explanation

This coverage helps pay for towing and roadside services if your car breaks down or you need help on the road, like a tire change or jump-start.  *Note: each carrier is different in terms of what is covered and how much. 

Example: You’re on a family trip when your car suddenly won’t start. Towing and roadside assistance can help by sending someone to jump-start your car or tow it to a nearby garage if necessary. 

Link to video explanation

Uninsured/Underinsured Motorist Property Damage (UM/UIM PD) coverage helps pay for repairs to your vehicle if it's damaged in an accident caused by a driver who either has no insurance or not enough insurance, and you are not at fault. 

Example: You park your car outside a grocery store, and when you return, you find that someone has hit and significantly damaged your car's rear side, then left the scene. You discover they're uninsured. UM/UIM property damage coverage would help pay for the repairs to your car since the driver who caused the damage does not have adequate insurance to cover the costs. 

Personal Injury Protection (PIP) coverage helps pay for medical expenses, lost wages, and other related costs if you or your passengers are injured in a car accident, regardless of who caused the accident. 

Example: Imagine you're driving and get hit by another car crossing the intersection on a red light. You and your passenger both receive minor injuries and need medical attention, plus you can't work for a few days. PIP coverage would help cover the medical bills and compensate for the wages you lost while recovering. 

Definition: Collision coverage pays for repairs to your car if you hit another vehicle or object, like a fence or a tree. 

Example: You're driving in a parking lot and accidentally hit a parked car because you were distracted. Collision coverage would help pay for the damages to your own car from this crash.  

*Note: the amount paid out depends on how much damage is done and how much the vehicle is worth at the time of the incident. 

Link to video explanation

*Note: collision would only pay for your vehicle, not the other persons. Your liability coverage would pay for the other person’s vehicle damage 

"Full Glass" is a coverage that is more popular in Arizona, though it is available in most states. Here are a few key points to consider and to address with our clients:

  • It does not come automatically (even with "full coverage"). 
  • You must have comprehensive in order to add glass coverage. 
  • Full glass simply means you have no deductible when you file a glass is still a claim.

Youthful drivers can be a stressful thing for parents. Here are some key things to point out and be aware of:

  • All household residents that are of driving age and have their license must be added to the policy. 
  • They must be added to the policy as a driver or excluded.
  • If they aren't added as a driver to the policy and an accident occurs, the insurance company can (and most likely will) deny the claim. 
  • No, your State Farm agent that said you can wait to add them until they have an accident and then add them to the policy, is wrong. Ask him to give that to you in writing. 

Discounts to be aware of:

  • Good Student (3.0 or better GPA)
  • Driving School
  • Away at school (each carrier is different, check requirements to add this discount)
  • Telematics
  • This is good to not only get a discount, but it allows parents to monitor their driving habits in real time

If a client is using their vehicle for any type of business use, we need to know. 

Business use is classified as driving their vehicle for any type of fee. 

  • Moving service
  • Delivery service
  • Realtor
  • Uber/Lyft
  • Notary service

Are just a few examples...

Any time someone is adding a new vehicle, you must ask them what they will be using the vehicle for. 

Most of our carriers allow you to select "business use". However, check with underwriting first to make sure the specific business use is acceptable. 

If it is not acceptable, refer client to Tiffany in our personal lines division and we will be able to help. 

Home Insurance Coverage

Dwelling coverage pays to repair or rebuild your house if it's damaged by things like fire, storm, or other covered events. The dwelling is the actual, physical structure of your house. The walls, floors, roof, anything permanently attached, etc.  

Example: A small kitchen fire spreads and damages several cabinets and walls. Dwelling coverage would help pay to repair the kitchen and walls. 

Link to video explanation

This coverage is for buildings on your property other than your home, like a detached garage or a shed, that get damaged by covered events. 

Example: Your detached garage burns down to the ground because of an electric fire. Other structures would help pay to rebuild this structure.  

Link to video explanation

Personal Property Coverage helps pay to repair or replace your belongings, like furniture, electronics, and clothes, if they are damaged, destroyed, or stolen due to events like theft, fire, or storms that are covered by your policy. 

Example: Imagine a scenario where a thief breaks into your home while you’re away on vacation. They steal your laptop, a flat-screen TV, and some valuable jewelry. Personal Property Coverage would help pay for the replacement of these stolen items, allowing you to recover from the loss without bearing the full financial burden yourself. 

Water backup coverage pays for damage to your home and belongings if water backs up from a sewer or drain. 

Example: During a heavy rainstorm, the city sewer backs up and causes water to flood your basement. Water backup coverage would help pay for cleaning up the mess and repairing any damage to your home and belongings. 

*Note: this does not come standard on all policies, it must be added. Before you discuss this coverage with someone, check to see if they have it on their policy.  

Link to video explanation

If a client has a home based business, we need to know about it and notate it on their home or renters policy. 

We need to ask each client if they have a home based business. 

What constitutes a home based business?

  • Selling physical goods out of your home
  • Having clients visit your home
  • Teachers offering in-home tutoring or music lessons
  • Sewing, tailoring, or alteration businesses
  • Cake decoration
  • Photography studios
  • Beauty parlor/barber shops with one or two chairs and no other employees
  • Pet grooming services
  • Sellers of cosmetics, crafts, or jewelry

Check with each carrier. Some carriers will allow you to add an endorsement to cover such businesses. Other carriers will not, and the client will need to get a separate commercial policy to cover themselves. 

Remember to ask, so that our clients can be properly covered. 


Not all personal property is covered 100% under the personal property. High value items have special limits of liability. 

This means certain things (list below) are only covered up to a certain amount, regardless of how much personal property coverage you have. 

If a client has a high value item, we need to check with the carrier to see if there are special limits of liability. If there are, we need to specifically schedule them onto the home or renters policy. 

Most carriers will require a bill of sale or appraisal in order to schedule them onto the policy. 

Below is a list of things that generally have special limits of liability. 

  1. Jewelry and Watches
  2. Firearms
  3. Furs
  4. Silverware and Goldware 
  5. Money and Valuable Papers
  6. Electronics
  7. Business Property
  8. Artwork and Antiques
  9. Watercraft and Trailers
  10. Collectibles

If you can’t live in your home because of damage from a covered event, loss of use coverage helps pay for your temporary living expenses. 

Example: After the kitchen fire, your home needs major repairs and isn’t safe to live in. Loss of use coverage would help pay for your family’s hotel stay while repairs are being made. 

Link to video explanation

This covers your financial responsibility if someone gets hurt or their property is damaged and you are to blame. 

Example: Your dog runs out of the house and bites a neighbor who was walking by. The neighbor needs medical treatment and sues you for the injury. Liability coverage would help cover the legal costs and any settlement money. 

Link to video explanation

This coverage pays for medical expenses if someone gets hurt on your property, regardless of who’s at fault. 

Example: A friend slips on your icy front steps during a visit and breaks their wrist. Medical payments coverage would help pay for their medical bills. 

Link to video explanation

Additional Replacement Cost Coverage on a homeowners policy is an endorsement that extends the dwelling coverage beyond the policy limits to account for rising costs. If the cost of repairing or rebuilding your home exceeds the original policy limit due to inflation, construction cost increases, or other factors, this additional replacement cost provision kicks in, providing extra funds to cover those additional expenses.

Example: Imagine your homeowners policy insures your house for $300,000. If a fire destroys the entire structure and rebuilding it would now cost $350,000 due to higher labor and material costs, the standard policy would only cover up to $300,000, leaving you $50,000 short. However, with additional replacement cost coverage providing a 25% buffer over the policy limit, you’d receive up to $75,000 extra, fully covering the rebuild at $350,000.

Actual Cash Value (ACV) Coverage

Actual Cash Value (ACV) coverage on a homeowners policy reimburses you for the value of your personal property at the time of loss, taking depreciation into account. This means the payout reflects the item's current market value, considering age, wear and tear, and other factors that reduce its worth over time.

Example: If a 5-year-old television originally cost $1,000 but is now worth $400 due to depreciation, an ACV policy would reimburse you $400 if the TV were damaged or stolen.

Video explanation here

Replacement Cost Coverage

Replacement Cost Coverage reimburses you for the cost of replacing damaged or stolen personal property with new items of similar kind and quality, without deducting for depreciation. This ensures you can replace your belongings at today's prices.

Example: If that same 5-year-old television is damaged or stolen, a replacement cost policy would reimburse you the full $1,000 it would take to buy a new equivalent TV, regardless of the depreciated value of the old one.

Umbrella Insurance

Umbrella insurance is an insurance policy that provides an additional limit of liability over and above your liability limits that are already on your homeowners and auto insurance policies.

Example: You are driving down the road and aren't paying attention. You rear-end someone going 40 MPH. This causes the person you hit to hit the person in front of them and then the person in front of them. 4 car pile up.

There's damage to all vehicles and 5 people have medical injuries and are rushed to the hospital. The damage in total is over $2,000,000. 

Your liability limits on your auto insurance are only $250,000/$500,000. 

This is where your umbrella can come in and give you additional liability coverage above your normal liability coverage on your auto or home.  


Just like auto and home insurance, there are numerous rating factors. However, with umbrella insurance they look at these main factors:

  • How many vehicles
  • How many drivers (drives under 21 and over 65 are rated higher)
  • How many properties owned
  • Do you have a swimming pool
  • Most carriers require you to have at least your auto with them if they are to offer you an umbrella policy. 
  • We do have an umbrella stand-alone carrier, 
  • To qualify for an umbrella, your auto limits must be at least $250,000/$500,000. Your home liability limit must be at least $300,000. 
  • Umbrella limits usually come in increments of $1,000,000. Most companies allow you to bind up to $5,000,000 without additional underwriting approval. 

Real life examples and stories help us better understand what could go wrong and how an umbrella insurance policy can help.

A 28-year-old engineer was hanging out at his friends house on a lazy Sunday afternoon. The friends decided to go swimming. The 28-year-old dove into a friend’s above ground swimming pool, struck his head on the bottom and, as a result, became a quadriplegic.

What a horrible accident!

The 28-year-old sued both his friend (the homeowner) and the pool manufacturer. The court found the homeowner to be 60 percent responsible and the pool manufacturer to be 40 percent responsible, and awarded $10,000,000.  

This is where an umbrella policy can come into play and help protect your financial life. 

Claimant, age 2, was on the Insureds’
property with his grandparents who were
there to care for 2 horses owned by the
Insureds. The Insureds were out of town
on vacation. The Claimant was kicked by
one of the horses, taken to the emergency
room, and then life flighted to a larger

The Claimant was given a 5% chance of
survival and underwent surgery for a
cracked skull (a piece of which was
missing) with 30% damage to the right
side of his brain. He survived and is
residing in a neighboring state at a
rehabilitation center. A large payment was
made under the personal umbrella policy.

The Insured hosted a party at his home.
Among the guests was the Claimant, a
family friend who was also the Insured’s
financial advisor. The Claimant brought his
wife, infant, and 2 year old child to the

The Insured gave the Claimant a jug of
spring water for him to use to mix formula
for the infant. The 2 year old child also
had a drink.

Shortly thereafter, the children became ill.
The family left the party, and then took
the children to the hospital. The hospital
requested the water jug which was found
to contain arsenic. An old label was found
wrapped around the handle with the word
“weed killer” printed on it.

The Insured had apparently mixed a
solution of weed killer in a jug similar to
the ones used for spring water and
mistakenly given it to the Claimant.
The infant died and the 2 year child
survived after being in critical condition.
The Personal Umbrella policy limits were
paid out.