Insurance FAQs

Auto Insurance FAQs

  • What should I consider when purchasing automobile insurance?

    Your independent agent will help you with several items that you should consider when purchasing automobile insurance.

    Here are a few:

    • Purchase the amount of liability coverage which makes sense for you.
    • Select the optional coverages you want.
    • Decide from which company to purchase insurance.
    • Don’t base your decision on price only. Other factors, such as service and claim response, are very important when selecting the right insurance.

  • What is collision physical damage coverage?

    Collision is the loss you incur when your automobile strikes an object, like a telephone pole, or another vehicle.

  • What is comprehensive physical damage coverage?

    Comprehensive provides coverage for any direct physical damage losses that you could incur to your car. For example, physical damage from something like a hailstorm.

  • How can I lower my automobile insurance rates?

    You can do several things to lower the cost of your automobile insurance.

    One way to lower the cost of your car insurance is to look for competitive pricing. An independent agent works with many companies and can provide you comparative rates, ensuring that you are getting the same coverage.

    Another way to lower the cost of your automobile insurance is to change your deductible. By raising your deductible, you might be able to lower the cost of your automobile insurance almost 10%. However, remember that you must be able to pay the deductible amount in case of a claim. You can also look for discounts to which you might be entitled. Some examples of discounts that may be available include multiple cars under the same policy, carrying a homeowners policy with the same insurance company, and belonging to different groups or associations.

Commercial Insurance FAQs

  • What is fire legal coverage?

    Fire legal coverage provides coverage if you rent a business space and are held responsible for fire damages to that rented space. However, it does not apply to all business risks. Here are some tips for purchasing fire legal coverage:

    • Don’t base your decision solely on price. Other factors like service and claim response are extremely important in selecting the right insurance.
    • Purchase the amount of liability coverage which makes sense for you.
    • Select the optional coverages you want.
    • Decide which company from which to purchase insurance.

  • What is the difference between Replacement Cost (RC) and Actual Cash Value (ACV)?

    Replacement Cost is the current cost to replace property. Actual Cash Value is the replacement cost, less depreciation of the property.

  • What does 80% co-insurance mean?
    Insurance carriers require that an insured party insure at least 80% of the property’s value in order to collect a partial loss in full.

    This policy is the way the insurance company encourages all insureds to adequately insure their property in relation to other insureds.

  • Does my policy cover physical damage to a vehicle I rent?

    Yes and no. Physical damage to a vehicle you rent will be covered only if that type of coverage is purchased.

  • Can other people drive my business vehicle?

    With your permission, other people may drive your vehicle. Regular drivers of the vehicle should be listed on your policy.

  • How does an audit work?

    At the end of the policy term, the insurance company will review the policy and either charge or credit the policyholder based upon an audit of estimated figures. Sales and payroll are examples of estimated auditable items. Audits can be performed onsite by an auditor, by mail, or by telephone. Audit estimations are charged a premium.

  • Why do I need certificates of insurance from sub-contractors?

    You need certificates of insurance from sub-contractors because an audit may require you to show proof that sub-contractors had their own insurance coverage. The sub-contractors’ certificates of insurance will prevent you from being charged for their exposure.

  • What is General Liability?

    General Liability insurance provides coverage if you are liable for damages to other individuals arising from your premises, products manufactured or sold, and general operations (ongoing and after completion).

  • What does Products/Completed Operations mean?

    Products/Completed Operations refers to the liability coverage for the damages caused by the “products/completed operations” you produce after the point at which you no longer have control of your operation or products.

  • What is Business Interruption/Extra Expense coverage?

    Business Interruption/Extra Expense coverage provides insurance for income loss, as well as the expense of establishing a temporary site during repairs due to the damages caused by a fire or other loss.

  • What is the difference between ``Named Insured``, ``First Named Insured,`` and ``Additional Insured?``

    Named Insureds are those listed by name in the relevant block of the policy’s declaration page. The named insured is commonly one person, partnership, corporation, or other entity with insurable interests; however, multiple named insureds may be included.

    First Named Insured is the first “named insured” listed on the policy declarations, the front page of the policy. This first names insured acts as the legal agent for all named insureds in requesting policy changes, initiating cancellation, or accepting any return premiums. The first named insured may also be responsible for payment of the premiums.

    Additional Insured is an entity to which a policy’s coverage is extended. There must be a tied-to relationship between the additional insured and named insured. An additional insured must be added to the policy prior to a claim being paid, and being an additional insured on another’s policy does not eliminate the need for a person to have his/her own Commercial General Liability policy.

Life Insurance FAQs

  • How much life insurance should I own?

    As a rough “rules of thumb,” you should own an amount of life insurance equal to 6 to 8 times annual earnings. However, many additional factors should be taken into account to determine a more precise estimate of the amount of life insurance needed.

    Important factors include:

    • Income sources (and amounts) other than salary/earnings
    • The number of individuals who are financially dependent on the insured
    • Whether or not the individual is married and, if so, what the spouse’s earning capacity is
    • The amount of death benefits payable an employer-sponsored life insurance plan and from Social Security
    • Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need)

    Tip: A person’s insurance advisor should be contacted for a precise calculation of how much life insurance is needed.

  • What about purchasing life insurance on a spouse and on children?

    It may be advisable to purchase life insurance on children in certain circumstances. Generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s).

    It is extremely important that the income earning capacity of the primary breadwinner be fully protected, if possible. Before contemplating the purchase of life insurance on children or on a non-wage earning spouse, purchase the required amount of life insurance for the main income-earner in the family.

    In a dual-earning household, it is important to protect the income earning capacity of both spouses. Life insurance on a non-wage earning spouse is often recommended for the purpose of paying for household services lost at this individual’s death.

  • Should I purchase term insurance or cash value life insurance?

    This answer will vary depending on circumstances. Although it’s a difficult question, several principles should be followed in addressing this issue.

    First, recognize that, in any life insurance purchasing decision, there are at least two basic questions that must be answered:

    1. “How much life insurance should I buy?” and
    2. “What type of life insurance policy should I buy?”

    The question contained in (1) involves an “insurance” decision and the question contained in (2) requires a “financial” decision.

    The “insurance” question should always be resolved first. For example, the amount of life insurance that you need may be so large that the only way you can afford this needed amount of insurance is through the purchase of term insurance with its lower premium.

    If your willingness and ability to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the “financial” decision. This is the questions of which type of policy to buy. Important factors affecting the “financial” decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk.

  • How does mortgage protection term insurance differ from other types of term life insurance?

    The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods. You might have a repayment period of 15, 20, 25 or 30 years.

    Although the face amount decreases over time, the premium is usually level in amount. Additionally, the premium payment period is often shorter than the maximum period of insurance coverage. As an example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.

  • Can I use an existing life insurance policy to provide for the repayment of an outstanding mortgage loan?

    The purchase of a new mortgage protection term insurance policy is usually not required by the lender. An existing policy, either term or cash-value life insurance, can be used for many purposes. For example, you may use a cash-value life insurance policy to pay off an outstanding mortgage loan balance in the event of the insured’s death.

    Credit Life Insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy?

    Credit life insurance is frequently more expensive than traditional term life insurance. Additionally, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advised, due to its relatively high cost.

Homeowners FAQs

  • What is homeowners insurance?

    Homeowners insurance is a form of personal lines insurance. The typical homeowners policy has two main sections: 1) to cover the property of the insured and 2) to provide personal liability coverage to the insured.

  • What do I need to know when purchasing homeowners insurance?

      • Get the amount and type of insurance that is needed.
      • Determine the amount of personal property insurance and personal liability coverage needed.
      • Select any additional endorsements that you wish to add to your policy. For example, do you want the personal property replacement cost endorsement?

  • What is ``actual cash value``?

    When “actual cash value” is used in a policy, you, the policy owner, are entitled to the depreciated value of the damaged property.

  • What is ``replacement cost``?

    When “replacement cost” coverage is used in a policy, you, the policy owner, are reimbursed an amount necessary to replace the article with one of similar type and quality at the current prices.

  • When and where is my personal property covered?

    Coverage of a homeowners policy provides named perils coverage. These will then apply to all your personal property (except property that is specifically excluded).

  • Should I purchase earthquake coverage?

    Do you live in an area that is prone to earthquakes? If so, you may want to consider purchasing earthquake coverage, as direct damages due to earthquakes are not covered under the standard homeowners insurance policy. The earthquake endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.

  • Should I purchase flood coverage?

    Yes, you should, provided your property lies in a flood plain (as determined by US Government Flood Maps). Ask your independent insurance agent about a flood quote.