Insureds pay a premium in exchange for the promise that an insurer will reimburse them for certain losses or damage covered by the contract. This monetary reimbursement reduces financial hardship and stress that arise out of perilous situations. The insurance contract itself must meet four conditions in order to be considered valid: it must be for a legal purpose; the parties must have the legal capacity to contract; there must be a meeting of minds; and there must be a payment or consideration.
After reviewing the information you supply, an insurance company uses its own set of standards, known as underwriting guidelines, to decide whether to offer you a policy. If it does, the contract you receive will contain specific details of your coverage including the amount of the premium, your deductible (the amount you must pay for a loss before the insurer starts to cover a claim), and the terms and conditions.
Car insurance policies typically include three kinds of coverage: collision, comprehensive and liability. Collision coverage pays to repair or replace your car if it’s damaged in an accident. Comprehensive coverage pays for other damages arising out of damage to your car, such as fire or theft. Liability coverage compensates other drivers and their passengers for medical expenses, property damage or death resulting from your negligent actions while driving.
Health insurance contracts may vary in the coverage provided but the Affordable Care Act requires that all health insurance plans include a minimum of 10 essential benefits, such as hospitalization and emergency services, prescription drug coverage, preventive care and laboratory testing. Some insurance companies also offer additional optional coverages, such as vision and dental, that you may choose to purchase.
You can find out about your specific insurance requirements by contacting the person who manages your account or contact your insurance agent. Generally, the System’s Units will contract with vendors that are insured and have insurance limits that satisfy the System’s insurance requirements when possible and financially feasible. For example, the System’s Tier 2 contracting categories require that contractors have at least $1,000,000 each for bodily injury and property damage. For some service providers, such as legal or accounting services, the system may need to verify that their coverage meets the appropriate levels before contracting with them. In these cases, the unit must furnish the vendor with a certificate of insurance. The system is currently working with the individual offices to develop exceptions to these insurance requirements, where warranted, after a thorough risk identification and evaluation process. The System’s Office of Risk Management will work with the university to develop these exceptions. These exceptions will be reviewed on an annual basis to ensure that they continue to address the risks identified. In some instances, the exceptions may be lowered or the requirement eliminated if it is determined that there is little or no additional risk involved. The System will communicate any changes in these requirements to affected units. 501(c)(3) insurance requirements