Definitions, Premiums and Deductibles

Northeast Financial Group is not only an insurance agency, our licensed agents care about our clients’ well-being. We provide the tools and resources necessary for consumers to receive the proper Connecticut Auto Insurance Education.  Helping you understand your policy is our duty as a Trusted Choice Agent.

As part of our Connecticut Auto Insurance Education, we have included the basic information about your auto insurance policy. We encourage you to schedule a free review your individual policy for specific details on coverages, terms, limits, conditions, and exclusions.

Starting with the Basics

An insurance policy is a contract between a policyholder and an insurance company.  All policies are unilateral in that the policyholder pays the insurance company a premium. The purpose of an auto insurance policy is to make one whole or return the policyholder back to their original condition prior to a covered financial loss.  For example, you own a 2015 vehicle with an actual cash value of $20,000 and the car was totaled by a covered peril.  The recovery amount is limited to the amount of the actual loss incurred, and not the actual cash value – or replacement cost less depreciation.

Laws and Regulations

Connecticut law requires motorists to have auto insurance.  No owner of a motor vehicle registered in Connecticut may operate, register, or maintain registration of a motor vehicle, or permit another person to operate the vehicle unless the owner maintains the required liability coverage.

* Proof of insurance shall be carried in the insured motor vehicle at all times. *

Connecticut law requires all drivers to carry some types of coverage – at least state minimum – in the amount of $25,000 because of bodily injury to or death of 1 person in any 1 accident and, subject to the limit for 1 person, $50,000 because of bodily injury to or death of 2 or more persons in any 1 accident, and $10,000 because of injury to or destruction of property of others in any 1 accident.

The Auto Insurance Policy

There are 6 primary components to your auto insurance policy and our licensed agents can help you determine the best coverages you need for your situation with a price that meets your budget.  For example: if you have 2 teenage drivers on your policy and own a $500,000 home – we would recommend enough coverage for a loss up to $500,000 so that your mortgage is covered in case of loss.

Liability Insurance protects you, the insured/policy holder, against a claim made by another party, and covers the insured’s legal responsibility to body and property damage.

• Bodily injury liability (BI) insurance covers you if you cause an accident in which someone else is injured. Your policy is designed to pay claims for each person injured in an accident, and limits the total paid per occurrence.
• Property damage liability (PD) insurance covers you when you damage someone else’s property. For example, your property damage will pay out when you are at fault for an accident that causes damage to someone else’s car.
• Collision insurance pays for damage to your car if you run into another object. This coverage is not required by law, although your bank may require it, if you have a lien on your car.
• Comprehensive insurance covers you in case your vehicle is damaged by an other than collision incident. The covered perils include hail, fire, theft, flood, earthquake, explosion, falling objects, and encounters with wildlife, such as deer 0r a Turkey and all glass breakage.  Comprehensive is optional coverage and you may choose your deductible amount.
• Uninsured/Underinsured motorist (UM/UIM) insurance covers your expenses when you are hit by a driver who does not carry adequate or does not have auto insurance. Our agents always recommend carrying uninsured/underinsured motorist insurance, so that you are not left with a financial loss because of someone else’s negligence to carry auto insurance.
• Medical insurance coverage (Med Pay/MPC) acts as primary coverage for medical expenses you and your passengers incur if injured in a motor vehicle accident, regardless who’s at fault. Med pay can help you pay your bills as soon as they are incurred.

Cost of Insurance

Insurance premiums are determined by the statistics of a large group of people who share the same risk. Many factors can affect your premium, and they all help determine how likely you are to have an accident.  Click here for more information from the Insurance Information Institute.  Some of the factors that will be used to determine the cost of insurance can include your driving record, how much you drive, your age, the type of car you drive, etc.  Insurance companies obtain the ratio of exposure by analyzing industry activities and driver statistics.  For example: if you live in an area where the average age of drivers is 45 years and they have decent driving records; the risk is slim, therefore calculating a lower premium.  It’s not that simple, but you get the idea.

The Deductible

A deductible on an auto insurance policy is the amount of money you agree to pay for damages before the insurance company provides payment towards the damage/loss.  Choosing a higher deductible means there is less risk of a payout for the insurance company, and so you may pay smaller premiums.  Northeast Financial Group can help you make an informed decision on how to choose your deductible. Everyone’s situation is different and we understand some may be able to afford a larger deductible, others may not.

Contact one of our professional agents to schedule a free auto policy review and we’ll make certain you have the best coverage at the best price!  (860) 739-3124

Insurance Terms & Definitions

National Association of Insurance Commissioners provides a glossary of insurance terms and definitions that are commonly used in the insurance business.

The definitions in this glossary are developed by the NAIC Research and Actuarial Department staff based on various insurance references. Some words and/or phrases may be defined differently by other entities, or used in a context such that the definition shown may not be applicable.

About Ed Rando

Edward W. Rando, LUTCF, is the President of Northeast Financial Group.
He is a Registered Representative with Ameritas Investment Company, LLC/Licensed Insurance Professional and has been providing insurance solutions and financial strategies for individuals, families and small businesses since 1989.

Ed's philosophy of providing multiple lines of insurance and investment products to his clients has allowed his practice to grow and prosper over the years. He began his financial career in 1989 with Prudential Insurance & Financial Services. In 1994 he founded Northeast Financial Group, LLC, a family owned insurance and financial services company.

Northeast Financial Group has locations at 194 Boston Post Road in East Lyme, CT & 606 West Main Street in Norwich, CT. Recently the third location was opened at 172A Boston Post Road in East Lyme, CT to serve all of your retirement, investment and life insurance needs. Ed is responsible for all aspects of life insurance and investment strategies within the practice.