What is the Purpose of Insurance in Georgia?
The purpose of insurance in Georgia is to safeguard you and your loved ones against financial loss from unforeseen events like natural disasters, accidents, illnesses, or deaths. There are different types of insurance policies available in Georgia:
Life insurance
Property insurance
Disaster insurance
Health insurance
Business insurance
Liability insurance
It is important to always talk with a Georgia-licensed insurance agent before purchasing any insurance policy in the state. They will help you compare insurance quotes from multiple insurers so you can end up with an affordable policy that suits your needs.
Why Do we Have Insurance in Georgia?
We have insurance policies in Georgia as a financial safety net to help you and your loved ones recover after an insurable event. Insurance protects you against losses, damages, injuries, and costs associated with unforeseen events. As of 2021, nearly 10.8 million people lived in Georgia, each of whom had unique insurance needs. Some of them needed basic health insurance coverage, while others needed to insure their lives, personal properties, and businesses.
Nearly 1.7 million Georgia residents under 65 years old are without health insurance. Most of these individuals suffer from chronic diseases like cancer, Alzheimer’s disease, asthma, and diabetes. Health insurance will protect individuals of this age group and other persons that need health insurance from high medical costs and ensure they have access to preventive care, vaccines, screenings, and check-ups.
As of 2022, nearly 10.5 million registered vehicles in Georgia needed auto insurance policies to relieve the financial burdens associated with accidents or damages. Although Georgia law mandates all drivers to carry bodily injury and property damage coverage policies, other auto insurance policies might be needed, depending on the vehicle type and its usage. For instance, vehicles used for business purposes would require commercial auto policies.
As of 2021, there were over 4.5 million housing units in Georgia. Nearly 2.9 million of these housing units were owner-occupied, and over 1.6 million were available for rent. Owners and renters of these residential properties need insurance policies to cover losses or damages that might affect their structures or personal belongings within the structures. For instance, more homeowners should get homeowners policies to cover damages to their structures and personal belongings. The different types of residential insurance policies available in Georgia are homeowners, condos, renters, and landlord insurance policies.
In 2022, Georgia was home to over 1.1 million business establishments. Small and large businesses in Georgia are prone to property damages, employee and non-employee crimes, data breaches, job-related injuries, and liabilities. Therefore, Georgia businesses need to have commercial insurance policies that would protect against the costs of liability lawsuits, property damages, and other risks.
Over 1.5 million people residing in Georgia are seniors (65 years and older), and most are battling some health challenges. Most of these seniors will cause a financial strain on their loved ones if they die without savings, but with life insurance policies, they will be able to provide financial protection for their loved ones at their demise.
Besides the death benefit, the insured can use the living benefits of life insurance to finance the retirement and to pay for terminal treatment costs.
Georgia is home to natural disasters like floods, earthquakes, hurricanes, wildfires, and tornadoes. For instance, in 2020, Georgia experienced a tornado outbreak in 21 counties, leading to multiple casualties. About 2,139 wildfires consumed over 11 thousand acres of land in Georgia in 2021. All this combined clearly shows that Georgia residents should purchase disaster insurance to protect against the prevalent natural disasters in their area.
Speak to a Georgia-licensed insurance agent for more information on why you need insurance policies. They can recommend insurance policies that will meet your current and future needs.
What is Insured?
Typically, what is insured by insurance in Georgia depends on the type of insurance policy you wish to buy. For instance, you can insure your life by purchasing life insurance or health insurance policies. Discuss with a Georgia-licensed insurance agent who can help you choose the right insurance policy that suits your current and future needs.
| Types of insurance policies in Georgia vs what is insured | |
| Life Insurance | It insures your life |
| Health Insurance | It insures your health |
| Homeowners Insurance Policy | It insures your home and personal belonging |
| Auto Insurance | It insures your car |
| Commercial Insurance | It insures your business, employees, and business properties. |
What is an Insurer?
An insurer is a company that sells insurance policies to individuals (called insureds) to compensate them in the event of covered perils like fire, explosion, smoke, car accidents, natural disasters, etc. In 2020, over 1,700 insurers were licensed to do business in Georgia.
What is an Insured?
An insured is a person or entity whose life, health, or property is covered by an insurance policy. The insured's coverage remains active as long as premiums are paid, but the policy lapses if the insured stops paying premiums. The insured must file a claim with their insurance company when they experience covered loss or damages that qualifies for payment under the policy’s terms.
What is an Insurance Policy?
In Georgia, an insurance policy is the insurance contract that defines the obligation of both the insured and the insurer. There are different types of insurance policies available in Georgia, including life insurance, health insurance, and property and casualty insurance, which feature various plans and are tailored toward meeting specific needs. Typically, insurance policies contain the following:
Your insurance policy number
Coverage term
Premiums
Policy limits
Deductibles
Definitions of insurance terms
Policy inclusions
Policy exclusions
Duties and responsibilities of the insured in the event of covered losses
What Does an Insurance Policy Consist of in Georgia?
An insurance policy in Georgia consists of the following:
Declarations page: It is also called the dec page and is usually the first page of the policy. The dec page summarizes the key information specific to the policy. It shows the following information:
Name and address of the insured
Name and address of policyholder
The policy period
The policy number
Coverages provided
Coverage limits and deductibles
Premiums
Who and/or what is covered
Endorsements
Discounts and surcharges
Limits of liability
How claims are paid
The definitions section: It is a section that defines specific terms used in the policy. The defined terms in the definitions section are also listed throughout the policy with special formatting like italics, boldface font, and quotations to show they have special definitions.
Insuring agreements: This is typically the main part of the policy. The insuring agreements outline what the insurance company is willing to cover in exchange for premiums. Sometimes insurers list insuring agreements as policy coverage. For instance, a commercial general liability policy may provide Coverage A (bodily injury and property damage), Coverage B (personal and advertising injury), and Coverage C (medical payments).
Exclusions: This section highlights all hazards, perils, circumstances, items, services, or properties that the policy does not cover. For instance, auto insurance policies exclude vehicle damages caused by wear and tear. Most homeowners insurance policies only provide dwelling coverage and personal property coverage when the insured home was damaged due to a covered peril.
Policy conditions: This section specifies the general requirements to be met by the insured and the insurer for the insurance policy to be valid. For instance, regular premium payment is one condition every insured must obey for coverage to be active. Also, in all property insurance, the insured is required to take measures to protect their property after a loss to prevent further damage.
Endorsement: This section adds, modifies, restricts, or excludes the insurance coverage.
Speak with a licensed insurance agent in Georgia if you need clarity on what your insurance policy contains. They will help you go over your policy provisions, including the inclusions and exclusions of your specific insurance coverage.
What is Insurance Coverage?
Insurance coverage is an amount of risk, potential loss, or liability that an insurance policy covers. It helps individuals recover from financial losses caused by incidents like damaged personal or business properties, car accidents, or unexpected health issues. However, individuals would have to pay insurance premiums to have insurance coverage. The most common types of insurance coverages in Georgia include:
Life insurance coverage
Health insurance coverage
Auto insurance coverage
Residential property insurance coverage
What is Insurance Rate?
An insurance rate is the amount of money the insured must pay to receive insurance coverage. Generally, the higher your insurance coverage limit, the higher your insurance rate. However, insurance rates differ from one insurer to the other. People often use insurance rates interchangeably with insurance premiums, but there is a difference between the two. An insurance rate refers to the cost for one unit of insurance over one year, while an insurance premium is the rate multiplied by the number of units the insured buys.
What is an Insurance Quote?
An insurance quote is an estimate of what an insurance company would charge for issuing an insurance policy. You can compare multiple quotes from several insurers online or through an insurance agent before buying an insurance policy. Any quote you get will tell you how much each insurer will charge for the policy and what coverage each policy will provide. Getting quotes from multiple insurance companies may be tasking, and you may not know how to compare similar products and services of each insurer. Hence, you should consider getting a Georgia-licensed insurance agent who can help you compare insurance quotes and ensure you get an affordable insurance policy that suits your needs.
What is a Discount in Insurance?
A discount in insurance means a reduction in the usual price of an insurance policy. Below are some common discounts insurers may offer:
Safety discount: Insurers offer discounts to insureds who take safety measures. For instance, life insurers offer lower premium rates to insureds who do not smoke. Homeowners insurers offer up to 5% in insurance discounts to property owners and renters with installed security systems like smoke detectors, burglar alarms, or dead-bolt locks.
Bundling discounts: Insurers offer discounts to insured who buy multiple types of insurance from them.
Group discounts: Employer-sponsored insurance policies typically come at discounted rates. Most employers offer employees packages that include health and life insurance policies to retain and motivate their staff. Insurers usually reduce premiums for such group coverages.
Premium Discount
Premium discount refers to the amount of money the insured can save on their policy when they pay all their premiums in advance. Insurers save on administrative costs when they receive large premiums, so they encourage lump sum premium payments by offering discounts.
Discount Rate
While in insurance and in finance, discount rate is an interest rate that allows the insurer to predict the present value of the future cash flows and investments, discount rate in health insurance is the negotiated discounted rate an insurance company agrees upon with the service providers.
Having insurance coverage allows the insured to enjoy a pre-negotiated lower (aka Discounted) rate. Discounted rate is lower than the usual rate that the insured will pay to the provider even if they pay for the service in cash.
Why Do you Need Insurance in Georgia?
You need insurance in Georgia to protect you, your business, and your properties during emergencies like property damage, accidents, medical emergencies, lawsuits, and death that can strain you or your family members financially.
| Different Insurance Policies in Georgia and Why They are Needed | |
| Life Insurance | In 2022, about 106 million adults in the United States, including Georgia, lacked life insurance or adequate coverage. If these people do not have savings, they might put a lot of financial strain on their loved ones when they die. |
| Health Insurance | Georgia residents frequently suffer from chronic diseases like asthma, cancer, cardiovascular disease, diabetes, and obesity. Nearly 1.7 million Georgians under 65 years old lack proper health insurance, which puts them at risk of covering medical payments out of pocket. Health insurance saves insureds from financial crises and minimizes out-of-pocket expenses for doctor and hospital visits, prescription drugs, medical devices, and wellness care. |
| Residential property insurance | There are about 4.5 million housing units in Georgia and each one needs residential property insurance to provide financial protection in the event of damages or thefts. The most common residential property insurance policies available in Georgia are homeowners insurance policy, condo insurance, renters insurance, and landlord insurance. |
| Auto insurance | In 2022, about 10.4 million registered vehicles in Georgia needed auto insurance policies to protect against costs associated with vehicle-related accidents and incidents. Individuals without auto insurance will be solely responsible for repair costs associated with vehicle damages. |
| Commercial insurance | In 2021, the State of Georgia had over 1.1 million active businesses with over 1.7 million employees. All these businesses need commercial insurance policies to protect them from financial losses due to perils such as theft, property damage, lawsuits, and employee injuries, illnesses, and death. |
| Disaster insurance | Georgia is prone to natural disasters such as floods, earthquakes, hurricanes, wildfires, and tornadoes. For instance, about 2,139 wildfires consumed 11,108 acres of land in Georgia in 2021. That same year, about 57 tornadoes were reported in Georgia. With disaster insurance policies, Georgia residents would be able to protect their residences and businesses against financial losses that arise from natural disasters. |
One major reason to purchase some insurance policies in Georgia is that they are mandatory. Georgia law requires that all motorists have auto liability insurance coverage. Driving without carrying proof of up-to-date auto insurance in Georgia can lead to:
Vehicle registration suspension or revocation
Up to $25 fine for vehicles with active registration
Additional $160 fine if the $25 fine is not paid within 30 days
Inability to renew or reinstate vehicle registration due to refusal to pay fines and unresolved lapse of coverage
| Minimum Limits of Liability Insurance in GEORGIA | |
| Bodily Injury Liability | $25,000 per person |
| $50,000 per incident | |
| Property Damage Liability | $25,000 per incident |
Also, Georgia law requires all businesses with three or more employees to have workers’ compensation insurance. Although some insurance policies in Georgia are not mandatory, it is still important for you to purchase them. For instance, about 15,855 motor vehicle theft incidents were reported in Georgia in 2020. Hence, you should get an auto insurance policy if you live in an area prone to theft. Auto insurance covers your car if it is stolen and covers repair costs if the car gets damaged during the break-in. Also, you can get a homeowners insurance policy that will cover stolen properties and theft-related damages caused to your insured home. Another reason you should get insurance, even if it is not mandatory, is that your lender may require it.
Below are some benefits of purchasing insurance in Georgia:
Cover damage or loss to the insured vehicle: Auto insurance will cover your vehicle if it is stolen or damaged due to an accident.
Coverage for medical expenses: Health insurance covers prescription drugs, most doctor and hospital visits, wellness care, surgery, and medical devices.
It provides coverage for your property: Residential or commercial property insurance policies can help protect your home, condo, or business property and its contents in the event of covered losses.
Maintenance of living standard: If you become disabled and unable to work due to an illness or injury, your disability insurance policy will cover expenses and lost income that you can use to maintain your lifestyle while you recover.
Protection for you and your family: With a life insurance policy, you can be confident that your loved ones will be financially secure in the event of your demise. Also, some life insurance policies have cash value components that allow you to get money from your death benefits while still alive.
Always discuss your insurance questions and needs with your Georgia-licensed insurance agent. They can assess your needs and recommend the best policy that will suit them.
Is Insurance Really Necessary?
Yes, insurance is really necessary for everyone. Individuals with insurance policies will be able to protect themselves and their loved ones when events that might be otherwise financially unbearable occur. With an insurance policy, you do not have to bear all the financial burdens when losses or damages occur. There are different types of insurance policies in Georgia, and they include:
HEALTH INSURANCE
Chronic diseases like heart disease, cancer, chronic lower respiratory diseases, Alzheimer’s disease, and kidney disease are the leading causes of death in Georgia. Over 130,000 Georgians of all ages have Alzheimer’s disease or related dementia (ADRD). This number is expected to increase by 46% over the next decade. In addition, nearly 9% of children in Georgia have asthma; hence, the need for health insurance to cover medical expenses. Health insurance in Georgia can help you and your loved ones pay for medical care and other unforeseen expenses resulting from illnesses or injuries.
| Common Types of Health Insurance Coverage in Georgia | ||
| Medicare | Medicare is a federal government health insurance program that subsidizes healthcare services for individuals age 65 and older. Younger people with certain diseases like End-Stage Renal Disease (ESRD) and disabilities can also benefit from Medicare. In 2022, over 912 thousand Georgia residents were enrolled in Original Medicare | |
| Medicaid and Children's Health Insurance Program (CHIP). In Georgia, CHIP is called PeachCare for Kids® | Medicaid is a federal and state health program that provides health coverage to eligible individuals like low-income adults, children, pregnant women, elderly adults, and people with disabilities. CHIP is a health program funded by both the federal and state government. It provides low-cost health coverage to children in families that do not qualify for Medicaid. As of 2022, about 2,054,483 lower-income Georgians benefited from Georgia's Medicaid program. That same year, nearly 290,000 children enrolled in CHIP. | |
| Major Health Insurance | Medicare Advantage | Medicare Advantage is a type of health insurance plan that provides Medicare benefits through a private-sector health insurance company. Approximately 50% of Georgia seniors choose Medicare Advantage to Original Medicare. |
| Group Health (ACA-compliant) coverage | Many employers offer group health insurance plans to their employees as part of their benefits package to attract and retain qualified employees. As a result, over 4.3 million employees in Georgia have the opportunity to benefit from group health plans.
About 701,135 Georgians enrolled in private individual market plans through the federal-based Marketplace during open enrollment for 2022 coverage. |
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| Short-Term Health Insurance | Short-term health insurance is designed to fill temporary gaps in coverage (up to 36 months in total) that may occur when a person is transitioning from one health plan or coverage to another or chooses to use short-term insurance to save money. | |
| Medigap (Medicare Supplement) | Medigap is a health insurance policy that helps to fill the gaps in Original Medicare. It pays for some healthcare costs like co-payments, coinsurance, and deductibles not covered by Medicare. Around 29% of Original Medicare subscribers use Medigap to help with the costs. | |
| Supplemental Health Insurance | Critical Illness Insurance | Georgia is prone to critical illnesses like diabetes, stroke, cancer, and tuberculosis. For instance, Georgians had more than 22,000 stroke hospitalizations in 2019. In addition, approximately 1 million Georgia residents (12.4%) have diabetes, with about 230,000 people unaware they have it. Critical illness insurance is a health policy that pays out when an insured is diagnosed with an illness covered under the plan. |
| Hospital Indemnity Insurance | Hospital indemnity insurance is a supplemental insurance policy that covers the cost of hospitalization. About 122,535 Georgia residents have been hospitalized due to Covid-19. These people may have to pay large medical bills due to the hospitalization if they are not eligible to benefit from funds provided by the government. | |
| Dental Insurance | Dental insurance covers dental care. With the average cost of a dental appointment anywhere between $140 and $1,000, dental insurance is one of the most highly sought after types of coverage. Most Georgia employers that offer health insurance also offer dental coverage. | |
| Vision Insurance | Vision insurance covers costs associated with eyesight like eye exams, contact lenses, eyeglass lenses, and frames. More than 255,000 Georgia residents have visual impairments or severe difficulty seeing, even with glasses. | |
| Hearing (and hearing-aid) Insurance | Hearing insurance covers costs associated with hearing, like hearing aids and hearing tests. In 2020, 3,046 newborns under 3 months old in Georgia were diagnosed with hearing loss. | |
| Long-Term Care (LTC) Insurance | Long-term care (LTC) insurance provides financial protection for people who can no longer perform the most basic functions of daily activity and require living assistance at home or a medical facility. | |
| Disability Income Insurance | More than 1.9 million adults (aged 18 and older) in Georgia have disabilities. About $20.3 billion is spent yearly on disability, equating to up to 32% of Georgia’s healthcare spending. With disability income insurance, these adults can access income to cater to their expenses. | |
LIFE INSURANCE
More than 10.7 million people reside in Georgia. About 14.7% of this population are seniors (65 years and older) dealing with life-threatening illnesses and chronic diseases like arthritis, heart disease, type 2 diabetes, dementia, and cancer. For instance, about 1.8 million people in Georgia have arthritis, and nearly 1.1 million of them are 65 years and older. All these seniors need life insurance to provide financial protection for their loved ones after their demise.
The primary purpose of life insurance in Georgia is to provide financial security to your policy beneficiaries in the event of your death. Therefore, your life insurer will pay death benefits to your beneficiary after your demise. In addition, some life insurance policies have living benefit options where you can access funds from your death benefit while still alive.
| Common Types of Life Insurance Policies in Georgia | |
| Term Life Insurance | Level Term |
| Decreasing Term | |
| Convertible Term | |
| Return of Premium (ROP) | |
| Renewable Term | |
| Permanent Life Insurance | Whole Life |
| Universal Life | |
| Final Expense | |
Term life insurance
A term insurance policy in Georgia covers the insured for a specific period, usually 10, 20, or 30 years. It only pays a death benefit if the insured dies during that term. There are different types of term life insurance policies in Georgia:
Decreasing term: This type of term life insurance policy provides a level of coverage or death benefit that decreases over time.
Renewable term: This type of term life insurance policy allows you to renew your term life coverage even if your health status changes.
Convertible term: This type of term life insurance allows you to convert your term insurance policy to a permanent one without going through medical exams.
Return of Premium (ROP): This feature allows you to receive refunds of part or all of the premiums you paid for your policy if you outlive your policy tenure.
Permanent life insurance
Permanent life insurance is also called cash value life insurance. Unlike term life insurance, most permanent life insurance policies combine lifelong financial protection with cash value components which insureds can withdraw from or borrow against. Hence, most permanent insurance policies accommodate both death benefits and living benefit options. There are different types of permanent life insurance policies in Georgia:
Whole life: This policy provides lifelong coverage with the death benefits payable only upon the insured’s death. A whole life policy allows you to build a tax-deferred cash value that you can borrow against while still alive. If you do not pay the money you loan from your cash value before your demise, the amount will be deducted from the death benefit your beneficiaries will receive.
Universal life: This permanent life insurance combines lifelong protection with a cash value component. Unlike whole life insurance, universal life insurance policies provide flexibility with premiums and death benefits. You can decide to lower or stop paying premiums for some time if you have accumulated sufficient wealth in your cash value account, which will cover the premiums while you are taking a break. You can also decide to adjust your death benefit at any time.
Final expense: Also known as Funeral expense insurance, it is typically purchased for a lower amount than the alternatives because it is meant to cover costs associated with final expenses like medical bills and burial costs. Final expense insurance policies are common with seniors in Georgia because they cover individuals regardless of their health status.
Various factors that affect the cost of life insurance in Georgia are:
Age: This is one of the major factors insurance companies consider when charging premiums. Young people tend to pay lesser premiums because they are less of a risk for insurers. Most times, younger people outlive their term life policy or make more payments on a permanent one before their demise than older ones. Hence, insurers charge older applicants higher premiums. For instance, a 20-year-old person can pay between $11 and $15 monthly for a $250,000 10-year term life coverage, while a 70-year-old person can pay up to $1,000 monthly for the same coverage amount and policy term - because they are much more likely to die during the policy term, compared to a 20-year old.
Gender: Generally, women pay lower premiums than men because they have a longer life expectancy. This typically means that men are likely to have a life insurance death benefit payout sooner than women, so they are charged higher premiums. For instance, a female 35-year-old non-smoker in Georgia can buy a $500,000 whole life insurance policy for around $240 - $250 per month, while a male non-smoker of the same age will have to pay $260 - $290 for the same coverage.
Health status: Individuals with pre-existing conditions pay higher premiums than healthy people. This is because those battling health challenges are more likely to die while the policy is still active.
Smoking: If you smoke, you could be paying up to 4 times for your life insurance policy, compared to non-smokers.
Occupation: If you work in a high-risk sector like construction, military, and aviation, you will pay higher premiums than people whose occupations require lesser risks, like desk workers.
PRIVATE PROPERTY INSURANCE
In Georgia, private property insurance provides financial reimbursement when the insured’s personal property is damaged or stolen. Private property insurance includes several policies like residential insurance and auto insurance. Private property insurance is really necessary in Georgia because:
It provides liability coverage: It protects you against third-party lawsuits and claims. Private property insurance provides financial protection against bodily injuries and property damage incurred by guests in the insured's home.
It provides additional living expenses: Private property insurance provides coverage if you need a temporary residence due to damages to your home.
It provides personal belongings coverage: Private property insurance covers your personal belongings like electronics, furniture, and arts.
It provides natural disaster coverage: Private property insurance covers damages to your home caused by natural disasters like lightning, windstorm or hail, and volcanic eruptions. However, it does not cover damages resulting from floods or earthquakes.
Residential Insurance
While all homes are owned by homeowners, owners who do not reside in their homes, and choose to rent them out, need to get landlord insurance instead of the standard homeowners policy. Meanwhile, tenants get renters insurance to protect their own interest:
- Homeowners insurance: A typical homeowners insurance cover losses and damages to your private residence and its contents like electronics, furniture, arts, and clothes. There are nearly 4.5 million housing units in Georgia, each needing home insurance. Without a home insurance policy, property owners would have to pay out of their pockets for property damages, stolen personal possessions, and liabilities that occur on their properties. A typical homeowners insurance covers structures and their contents. It also covers additional living expenses if you have to temporarily leave your home due to covered losses. How much home insurance you need depends on the property’s assessed value and your insurance needs. Make sure you get homeowners insurance coverage that is enough to cover the cost of rebuilding your home and replacing your personal property.
When talking about Property insurance premiums, several factors like the age of the home, type of structure, location, and claims history are usually considered when determining the cost. However, you can save money on your policy by getting homeowners insurance quotes from multiple homeowners insurance companies to compare prices and insurance products. It is important to get a homeowners insurance quote from several companies that offer similar products. Additionally, improving security in your home by using smoke detectors, burglar alarms, dead-bolt locks and fire alarms can help you save on premiums. Your insurance company can give you multi-policy discounts when you buy multiple insurance policies from them.
Contact a Georgia-licensed insurance agent if you have any homeowners insurance questions regarding your residential property. They will be able to recommend the right policy for your structure. An insurance agent can help you compare homeowners insurance quotes from several homeowners insurance companies so you can get an affordable policy that suits your needs.
Condo insurance: It protects a condominium unit against losses and damages resulting from covered perils like theft, vandalism, fire damage, and water damage. Condo insurance does not cover the replacement cost damages resulting from floods or earthquakes. Hence, condo owners would have to get additional coverage to protect against such perils.
Renters insurance: Over 1.6 million residential dwellings in Georgia are rentals, and they all need renters insurance. Renters insurance policies cover the replacement cost of personal properties in rented apartments when damaged by perils like vandalism, windstorm or hail, theft, and fire. Renters insurance does not cover the rented structure and other structures like fences and sheds in the rented apartment.
Landlord insurance: About 36% of residential dwellings in Georgia are for rent. As a landlord, you will need landlord insurance to cover financial losses connected with your rental home. Typically, a landlord insurance policy pays to repair damages to your rental home and other structures like a detached garage or fence. Landlord insurance does not cover flooding.
Contact a Georgia-licensed insurance agent for more information regarding your home insurance coverage. They will recommend coverage options that will suit your needs and will help you get competing quotes to compare.
Auto Insurance
In 2022, about 10.4 million registered vehicles in Georgia needed auto insurance. Auto insurance helps to protect you against costs associated with vehicle-related accidents and incidents. Georgia law mandates every driver in the state to carry a minimum of $25,000 per person and $50,000 per incident in bodily injury liability and $25,000 per person and $50,000 per incident in property damage liability.
Between 2018 and 2021, an average of 381,319 auto crashes took place in Georgia annually, with over 1,500 of them fatal.
Watercraft Insurance
Watercraft insurance is an umbrella term used in Georgia for several insurance policies like yacht insurance, boat insurance, and personal watercraft insurance. Watercraft insurance protects against physical loss or damage to boats, yachts, jet skis, and other vessels.
Aircraft Insurance
Aircraft insurance covers physical damage to aircraft like airplanes and helicopters and any legal fees arising from its operation and ownership. Aircraft insurance can be private or commercial.
COMMERCIAL INSURANCE
The State of Georgia had over 1.1 million active businesses in 2021. About 99.6% of these businesses were considered small businesses, with 1.7 million employees. That same year, over 4.3 million residents were employed by small and large business owners. All these businesses need commercial insurance policies to protect them from financial losses due to perils such as theft, property damage, liability lawsuits, employee injuries, illnesses, and death. Commercial insurance is really necessary in Georgia because:
- It is mandatory by law: Georgia law requires all business employers with three or more full or part-time employees to carry workers’ compensation insurance. Failure to carry workers’ compensation insurance attracts a minimum fine of $500 and a maximum fine of $5,000.00 per violation or a one-year jail term.
Additionally, all businesses with 50 or more employees in Georgia are required to offer health insurance coverage options to employees.
It increases business credibility: Businesses use commercial insurance policies to prove to prospective clients and customers that their companies are credible. This assures clients that if anything goes wrong, such businesses have a way of compensating them.
Business contracts may require it: Client contracts may require that businesses carry commercial insurance policies. Additionally, landlords who rent or lease their facilities out to businesses may require them to carry some commercial insurance policies. Lenders may mandate businesses that borrow money to finance their buildings, equipment, or operations to have certain commercial insurance requirements.
It protects your employees: The most valuable assets of a company are the employees, and it is crucial to protect them in the event of work-related accidents. Providing commercial insurance policies like commercial life insurance and commercial health insurance helps to attract and retain your employees.
The types of commercial insurance available in Georgia are:
Commercial property insurance: It covers buildings, contents, equipment, vehicles, and other real and personal property owned by your business.
Business interruption insurance: It replaces lost income when a business operation is halted due to damage or loss of property.
Commercial crime insurance: It is a type of insurance policy that protects businesses from crime-related losses like theft, fraud, and burglary perpetrated by both employees and outside entities.
Commercial liability insurance: It protects businesses from financial losses when they become liable for property damages or personal and advertising injuries caused by their services, products, business operations, and/or employees.
Workers' Compensation insurance: Georgia law mandates employers with three or more full or part-time employees to carry workers’ compensation coverage. Workers' compensation insurance benefits workers who experience work-related injuries or deaths.
Commercial health insurance: While larger businesses in Georgia are required to offer health insurance coverage, small employers in the state are also known to offer group insurance to their employees.
Commercial life insurance: Businesses can purchase keyman life insurance (to cover important employees like managers or top executives) and other types of policies, to control buy-sell agreements (to cover business partners).
Commercial insurance premiums are calculated based on several factors like:
Industry: High-risk businesses like construction or manufacturing companies pay higher premiums than businesses with lesser risks like advertising firms or home-based e-commerce businesses.
Business location: Where you operate your business will affect your commercial premiums. You will pay higher premiums if your business is located in an area prone to extreme weather conditions or high crime rates. This is because your business is at higher risk of theft, vandalism, and structural damages.
Business size: Companies with many employees pay higher premiums on liability and property coverages than companies with few or no employees. This is because injuries or accidents are more likely to occur in large businesses. Meanwhile, larger businesses tend to offer more affordable group health insurance rates, because larger groups qualify for more discounts.
Annual revenue: Generally, companies with higher revenues tend to pay more than companies with low revenues because businesses with higher incomes are likely to have more customers and more risk exposure.
Claims history: Businesses that have filed several claims in the last few years will pay higher premiums than businesses with little or no claims history.
LIABILITY INSURANCE
Liability insurance protects the insured against claims resulting from third-party injuries and property damages. In other words, liability insurance protects others from the actions of the inactions of the insured. It also covers any legal fees associated with the claims. The most common types of liability insurance policies in Georgia are:
Residential Liability:
Homeowners insurance - personal liability: It covers third-party bodily injury and property damages that occur in the insured home for which the homeowner or covered family members are legally responsible. A typical homeowners policy also covers damages caused by the insured's pets but does not cover injuries sustained by their pets; that is covered by pet insurance.
Renters insurance - liability: It protects renters from liability claims when they cause harm to third-parties through accidents and negligence on the premises.
Landlord insurance - liability: It protects landlords from third-party injury or damage claims related to their rental properties.
Auto Liability:
- Auto insurance - liability: It pays for the other driver’s liability claims (property damage, bodily injury, legal costs, etc.) if you are at fault in an accident.
Commercial Liability:
General liability (GL): It covers bodily injury and personal injury that occurs on your business premises. It also covers property damage caused by your business operations or products.
Cyber liability insurance: It covers financial losses resulting from data breaches and other cyber security issues.
Employer’s liability insurance: It covers claims from employees who have suffered job-related injuries or illnesses not covered by workers' compensation.
Product liability insurance: It covers your business when a product you sold, created, manufactured, or distributed causes bodily injury to a third-party or property damage to their belongings.
Director and officer (D&O) liability insurance: It covers directors and officers of businesses from claims resulting from actions and decisions taken as part of their duties. D&O covers personal losses, legal fees, and other costs arising from lawsuits.
Umbrella liability insurance: This is a separate policy that provides extra coverage to the insured when the limits of other underlying owned liability policies have been reached. Umbrella insurance offers additional protection to help cover personal property damage, injuries, lawsuits, and personal liability situations.
Speak to a licensed insurance agent in Georgia if you have any questions regarding liability coverage. They can assess your liability insurance needs, review the limits of the liability coverage in your current insurance policy, and recommend any add-ons that can benefit you.
DISASTER INSURANCE
Natural disasters like floods, hurricanes, wildfires, and tornadoes are common in Georgia. For instance, in 2021, 2,139 wildfires consumed over 11 thousand acres of land in Georgia. Many single-story homes in the state are at risk of storm surges at different category levels:
| Single-story Homes in Georgia at Risk of Storm Surges | |
| Category 1 Hurricane | ≈9,378 single-story homes were at risk of storm surges with a reconstruction cost value of nearly $2.9 billion. |
| Category 2 Hurricane | ≈ 54,470 single-story homes were at risk of storm surges with a reconstruction cost value of more than $14.5 billion. |
| Category 3 Hurricane | ≈ 113,068 single-story homes were at risk of storm surges with a reconstruction cost value of nearly $27 billion. |
| Category 4 Hurricane | ≈ 152,882 single-story homes were at risk of storm surges with a reconstruction cost value of more than $35 billion. |
| Category 5 Hurricane | ≈ 164,504 single-story homes were at risk of storm surges with a reconstruction cost value of over $37 billion. |
Source: iii.org (2020)
With over 4,600 dams and approximately 15% of the world’s earthquakes taking place in Georgia, the need for disaster insurance cannot be overemphasized. We need to protect our residences and businesses against financial losses caused by natural disasters by purchasing disaster insurance policies. Standard residential or business insurance policies exclude most natural disasters like floods and earthquakes. Hence, property owners would have to purchase disaster insurance policies as add-ons to existing standard property insurance policies.
Common types of coverages under disaster insurance in Georgia are:
Flood insurance: In 2022, about 4,470 multi-family structures in the Savanna metropolitan area were at risk for storm surge and hurricane wind, with an expected reconstruction cost value of nearly $2.2 billion. All those structures need flood insurance policies for damages caused by floods. Flood insurance is covered under the separate flood insurance policy administered under the National Flood Insurance Program (NFIP).
Earthquake insurance: Although earthquakes are not frequent in Georgia, it is better to stay prepared. Over 250 earthquakes occurred in Georgia between 2000 and 2022. Earthquake insurance covers damages caused by earthquakes to your home, personal belongings, and business properties.
The type of natural disaster prevalent in your area determines the type of disaster insurance you should purchase. For instance, you should consider getting flood insurance if you live or your business is located in a flood zone. Contact a Georgia-licensed insurance agent to assist with purchasing the right disaster policy that suits your needs and geographical location.
Deductible vs. Premium
To better understand insurance, you need to understand deductibles and premiums. Then, we will discuss its effects and how they affect each other.
What is a Deductible in Insurance?
A deductible in insurance means the amount you will need to pay out of pocket for a covered peril before your insurance kicks in. It is important to note that life insurance and liability policies do not have deductibles. However, other insurance policies like property and casualty, and health insurance products have deductibles.
What Does Deductible Mean in Georgia Insurance?
In Georgia, a deductible refers to the out-of-pocket costs that you must pay before your health, auto, commercial, or homeowners insurance company pays for some or all of your claims. Deductible is the way insurance providers share costs with insureds when they make claims.
PROs of Deductibles
Some advantages of deductible in Georgia are:
Higher deductibles lower your insurance premiums
It allows you to choose amounts you can comfortably pay out of pocket
Removes the temptation to turn in small claims, thereby preventing higher premiums due to claims history
Cons of Deductibles
Some disadvantages that come with deductibles are:
Lower deductibles increase your insurance premiums
Insureds with higher deductibles may be unable to afford to pay out of pocket for large losses
What is a Premium in Georgia Insurance?
A premium in Georgia refers to the amount a Georgia resident pays for an insurance policy. Failure to pay insurance premiums when due or within the grace period may lead to policy cancellation.
What is an Insurance Premium?
An insurance premium is the amount of money you have to pay for an insurance policy. Premium payments can be made in installments (monthly, quarterly, semi-annually, or annually) or up-front in full before coverage begins.
How is Insurance Premium Determined?
Insurers use various factors to determine insurance premiums. For instance, they can use factors like:
Coverage type: The more comprehensive your coverage, the higher your premiums. For instance, a home insurance policy with open perils or all-risk coverage is usually more expensive than a named perils home insurance policy that only provides basic coverage.
Age: The older you get, the higher your insurance premiums. For instance, life insurance premiums increase by about 8% to 10% for every year of age. Note that age does not affect most residential property insurance premiums.
Coverage amount: Regardless of what you are insuring, how much coverage you purchase affects your premiums. Generally, the lesser the coverage, the cheaper the premiums. For instance, it will cost more to insure a $600,000 home than a $400,000 home. Also, premiums for a $500,000 life insurance coverage will be higher than a $250,000 coverage.
Personal information: Your personal details like your claims history, driving record, credit history, gender, marital status, lifestyle, family medical history, health, smoking status, hobbies, job, and location affect your insurance premiums. For instance, women tend to pay lower premiums than men because they have a longer life expectancy.
Before buying an insurance policy, contact a Georgia-licensed insurance agent who can recommend ways you can save on your insurance premiums. They can help you bundle your insurance policies so you can be eligible for discounts from your prospective insurance company.
How Do Deductibles Affect Premiums?
Your deductible is inversely proportional to your premium. Hence, your premiums will increase if you purchase an insurance policy with lower deductibles. Conversely, high deductible comes with lower premiums.
How Do you Pay Insurance Premiums in Georgia?
There are different modes of premium payments in Georgia based on your agreement with your insurance company. For example, you can pay your premiums in installments or up-front in full before the start of coverage. Generally, premiums can be paid:
Annually: This is a lump sum payment you make once a year to keep your coverage active. Many insurers offer discounts when insureds pay all their premiums at once. Although paying insurance premiums annually can reduce costs, it can be a financial burden for some people. Also, if you cancel your insurance policy before the end of the year, you might not get a full refund for the unused portion of the premium.
Semi-annually: You must make payments every six months to keep your insurance policy active. Paying your premiums semi-annually may make you eligible for discounts, but you might not get a full refund if you cancel your policy early.
Quarterly: You must make payments every three months to keep your insurance policy active. Quarterly premium payment is good if you do not want to make monthly payments but also do not want to pay a large lump sum all at once.
Monthly: This is the most common type of premium payment because most people find it convenient to budget. You will have to make a payment every month to keep your insurance policy active. Most private (non-commercial) insurance in Georgia allows for monthly payments.
Health Insurance
It is common to pay health insurance premiums monthly, especially if you buy your policy through an insurance agent or on the individual market. However, employer-sponsored health coverage requires that you pay a portion of the premium through payroll deductions while your employer pays up to (commonly) 50% and sometimes more.
Auto Insurance
The mode of auto insurance premium payments is flexible. You can decide to make monthly, quarterly, or upfront premium payments based on what works for you. Most private auto insurance companies bill and quote on a 6-month basis, which can be usually paid in full, for the lowest possible rate. Choosing to pay monthly instead may cost a few dollars per month extra, to offset the insurer’s increased processing costs.
Like other commercial insurance policies, commercial auto insurance premiums are typically billed in full. Some commercial insurers may offer monthly payments, but most must be paid in full before the policy starts. If a business cannot afford to pay for an expensive commercial policy upfront, it gets a premium finance loan. The loan is used to pay the premium in full and start the coverage, while the business pays back the loan on a monthly basis.
Residential Insurance
The two main ways you can pay for your residential insurance policies in Georgia are:
Paying through an escrow account
Paying directly to your insurance company
Your mortgage lender may allow you to add your insurance premium cost (through an escrow) to your monthly mortgage payment. Alternatively, you can pay your premiums directly to the insurance company based on their preference which could be monthly, quarterly, or annually, depending on your policy type.
Commercial Insurance
While some commercial insurers in Georgia offer in-house financing, the most common mode of commercial insurance premium payment is annually. Insurers quote the lowest cost up-front, giving the business an opportunity to save the most if the bill is paid in full. If the business cannot afford to pay for commercial coverage upfront, it will pay more for the option to pay the bill over time. Either the insurer will charge extra to process the payment more often, or a business gets a premium finance loan to pay their annual premiums and then pay back the loans on a monthly basis. Most times, a business would pay two months of the annual premium as a deposit and pay the rest of the financed amount in the course of 10 months, including accrued interest (typically 7% - 12%).
Life Insurance
The way you pay your life insurance policy depends on your preference and the type of policy you are purchasing. For instance, you can pay your term life premium payments monthly, semi-annually, quarterly, or annually. In contrast, you can use your cash-value account to pay your permanent life insurance premiums. However, you might be required to make a lump-sum annual payment. High-net-worth individuals can also get premium finance loans to pay their life insurance premiums. However, they would have to use their assets as collateral.
Disaster Insurance
Most insurance companies in Georgia and the National Flood Insurance Program (NFIP) require insureds to pay disaster insurance premiums annually. However, those whose disaster insurance coverage is paid through mortgage escrows can split the annual cost into more manageable monthly payments.
Speak with a Georgia-licensed insurance agent for more information on premiums payment. They will recommend a mode of payment that will work well with your budget.
