Frequently Asked Questions
WHAT KINDS OF QUESTIONS SHOULD I BE EXPECTED TO ANSWER WHEN I AM APPLYING FOR AN INSURANCE POLICY? WHY DO INSURERS NEED SO MUCH INFORMATION?
When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, it will want to know about the person’s previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured.
Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than will a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you.
In addition to your age, gender and driving experience, information about the vehicle you drive, and how you drive it, is also needed to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact; and, someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends.
WHAT ARE THE ADVANTAGES TO USING AN AGENT TO PURCHASE INSURANCE?
I HAVE AN OLDER CAR WHOSE CURRENT MARKET VALUE IS VERY LOW – DO I REALLY NEED TO PURCHASE AUTOMOBILE INSURANCE?
It is often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just “total” the car and give you a check for the car’s market value less the deductible. Many people with older cars decide not to purchase any physical damage coverage.
WHAT IS THE DIFFERENCE BETWEEN COLLISION PHYSICAL DAMAGE COVERAGE AND COMPREHENSIVE PHYSICAL DAMAGE COVERAGE?
Comprehensive provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm will be covered under your comprehensive coverage.
WHAT FACTORS CAN AFFECT THE COST OF MY AUTOMOBILE INSURANCE?
The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost you.
Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.
WHAT ARE SOME PRACTICAL THINGS I CAN DO TO LOWER THE COST OF MY HOMEOWNERS INSURANCE?
It is not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage.
Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Other insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask us about any discounts for which you may qualify.
Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent.
WHAT DOES HOMEOWNERS INSURANCE COVER?
WHAT IS THE DIFFERENCE BETWEEN “ACTUAL CASH VALUE” AND “REPLACEMENT COST”?
WHAT FACTORS SHOULD I CONSIDER WHEN PURCHASING HOMEOWNERS INSURANCE?
Here is a checklist of things you should consider when you purchase homeowners insurance.
Determine the amount and type of insurance that you need. The coverage limit of your house should equal 100% of its replacement cost. If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home — you’ll have to pay the rest out of your own pocket. Also, decide if the personal property and personal liability limits are adequate for your needs.
Determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement, an earthquake endorsement or a jewelry endorsement?
Once you have decided on the coverage you want in your homeowners insurance policy, consult us. We will be able to help you determine if there are any gaps in coverage you might not have been aware of, explain the details of the policy’s exclusions and limitations as well as recommend an insurance company that will live up to your expectations.
WHAT ARE THE POLICY LIMITS (I.E., COVERAGE LIMITS) IN THE STANDARD HOMEOWNERS POLICY?
The dwelling and other structures on the premises are protected on an “all risks” basis up to the policy limits. “All risks” means that unless the policy specifically excludes the manner in which your home is damaged or destroyed, there is coverage. The policy limit for the dwelling is set by the policy owner at the time the insurance is purchased. The policy limit for the other structure is usually equal to 10% of the policy limit for the dwelling.
Losses to your personal property are covered on a “named perils” basis. “Named perils” means that you have coverage only when your property is damaged or destroyed in the manner specifically described in the policy. The policy limit on the coverage is equal to 50% of the policy limit on the dwelling. Limits for the coverage for the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss is equal to 20% of the policy limit on the dwelling.
The coverage limit on personal liability is determined by the policy owner at the time the policy is issued. The coverage limit on medical payments to others is usually set at $1000 per injured person.
WHERE AND WHEN IS MY PERSONAL PROPERTY COVERED?
DO I NEED EARTHQUAKE COVERAGE? HOW CAN I GET IT?
Contact us today to discuss a custom insurance plan for your business.