Alan K. Warfield

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Arthur K. Warfield
Real Estate & Insurance Services

Insurance Terms & Frequent Questions

Difference between personal and commercial insurance
Difference between property and liability insurance
Damage other than collision
Stacked coverage
Tort--limited vs full
Umbrella coverage

What's the difference between "personal" and "commercial" insurance?

There are two main kinds of insurance:

Personal insurance

Personal insurance covers your:
  • Personal use of or ownership in personal and real property -- cars, house, house contents, motorcycles, boats, recreational vehicles.
  • Liability for injuries you cause or which happen on your property.
  • Financial obligations, such as mortgages, family expenses, medical payments.

Commercial insurance

Whether you're a one person home-office or a Fortune 500 corporation--commercial insurance can cover:
  • Property owned or leased strictly forbusiness use.
  • Lliability for injuries on that property.
  • Financial obligations such as rent or inventory.

More details about finding appropriate commercial insurance.

What's the difference between "property" and "liability"?

For both personal and commercial insurance, you need both property and liability coverage:


"Property" covers damage or loss of real estate and other things you use or own, such as cars, motorcycles, jewelry, household goods, business equipment, business inventory.


"Liability" covers loss to another person or property when you are determined to have been responsible and are required to make financial restitution.

What do all these terms mean?

Here are some basic definitions of key insurance terms used on this website. These definitions are not legally precise and may not cover the details relevant to your particular situation or concern.Please give us a call if you need in-depth explanations.

Damage other than collision

This used to be called "comprehensive". It covers damage from vandalism, fire, flood, theft of the car, break-in, etc.


Liability pays for medical bills and property damage to other people when the incident is your fault. It does not pay for your own medical and repair expenses.

Once the insurance company pays out to the limits of your policy, you may have to pay out of your pocket for expenses your policy didn't cover. Hospital bills can add up! This is why it's smart to buy more coverage than the legal minumum your state requires.

Stacked coverage

This option increases your coverage for accidents involving under or uninsured motorists.Policies covering more than one vehicle are eligible for stacked coverage. If you choose "stacked" coverage, you can collect for a single collision the total amount of coverage you have for all your vehicles.

For example, let's say you own a car and a van, each insured with $15K/$30K uninsured motorist coverage. If an uninsured driver hits your van, you can receive $15k/30K for bodily injuries PLUS another $15k/30K from your car's coverage. Each vehicle effectively has $30k/$60k bodily injury coverage for the price of $15k/30k.

The advantage of buying "stacked" is that you get higher level of coverage for all your vehicles with only a small increase in premium.


Pennsylvania law gives you the right to choose either Limited or Full tort options. Note: once you have chosen a Tort Option you cannot change your selection through your annual policy renewal date.

A. The Limited Tort Option limits your ability to seek compensation for non-economic losses ("pain and suffering"). You may seek recovery for all medical and other out-of-pocket expenses. However, you can receive nonmonetary damages only if your injuries fall within the legal and insurance policy definitions of "serious injury", or unless other exceptions noted in the policy apply (for example, the driver who caused your injuries is convicted of DUI or driving without insurance or comes from another state).

B. The Full Tort Option allows you to maintain an unrestricted right to seek compensation for bodily injuries caused by other drivers.You may seek recovery for all medical and other out-of-pocket expenses and may also seek financial compensation for pain and suffering or other nonmonetary damages as a result of injuries caused by other drivers.

Bodily Injury Damages

If you still have outstanding expenses after other liability bonds and policies (such as your health insurance), court settlements, etc. have been fully paid out, your insurance may pay for "bodily injury damages."

Umbrella Coverage

An umbrella policy pays for the amount of liability above whatever limit your personal auto and homeowner policies cover. Say you are mowing your lawn and the mower throws a stone which hits your neighbor's child, causing injury. Their claim is for $450,000 but your policy limit is $300,000. An umbrella (usually a minimum limit of $1 million) would pay the excess $150,000. The technical term is "personal blanket excess liability policy." See our umbrella coverage page for information on obtaining this useful addition to your policy.

Useful online glossaries of insurance terms.

Alan Warfield takes the time to explain your insurance options
and coverage in real-world terms.

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