Personal Insurance
When purchasing automobile insurance what should I consider?
- Purchase the amount of liability coverage which makes sense for you.
- Ask your agent about the optional coverages that may fit your needs.
- Don't base your decision solely on price (Other factors like service, coverages, deductibles and claim response are extremely important in selecting the right insurance).
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Does my insurance policy cover someone if I loan him/her my car?
Yes. If you have given that person permission to use your car, they are covered.
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What is collision physical damage coverage?
Collision is the loss you incur when your automobile collides with another vehicle or object like a telephone pole. It covers the damage done to your car, but does not cover bodily injury.
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What is comprehensive physical damage coverage?
Comprehensive provides coverage for direct physical damage to you car, such as in a hailstorm.
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How can I lower my automobile insurance rates?
One way to lower the cost is to change your deductible. By raising your deductible you may lower the cost of your automobile insurance almost 10% You must be able to pay the deductible amount in case of a claim. You can also look for discounts that you may be entitled to. Some examples of discounts that may be available are: multiple cars under the same policy, carrying a homeowners policy with the same insurance company, different groups or associations, good driver discounts, good student discounts and more.
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What is homeowners insurance?
The typical homeowners policy has two main sections: 1) covers the property of the insured and 2) provides personal liability coverage to the insured. Ask your insurance agent about your homeowners insurance limits. Many homeowners won’t cover high-valued personal property. Most do not cover floods and many won’t cover wind damage.
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What do I need to know when purchasing homeowners insurance?
- Talk to your agent in depth about your property and your needs.
- Take an inventory of all your personal property and go over it with your agent to determine if you need additional coverage above the standard homeowners limits.
- Ask about additional endorsements to cover property and liability that aren’t normally covered in homeowners, such as a personal liability umbrella policy.
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What is "actual cash value"?
When "actual cash value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property – NOT the cost to rebuild the home.
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What is "replacement cost"?
When "replacement cost" coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices. Ask your agent about replacement cost. Building costs change quickly, and many policies will only cover up to 125% of the assessed value of the home. You may need more than that to ensure your home will be rebuilt to its previous condition.
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Should I purchase flood coverage?
Most homes that are damages in floods do not lie in a flood plain as determined by the US Government Flood Maps. Most homeowners policies do not cover damage caused by flood. However, flood insurance is available through a government program and is affordable. Ask your independent agent about a flood quote.
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Commercial Insurance
What is fire legal coverage?
Fire legal coverage provides coverage for you if you rent a business space and are held responsible for fire damages to that rented space. It does not apply to all business risks.
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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.
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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 is the way the insurance company encourages all insureds to adequately insure their property in relation to other insureds.
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Does my policy cover physical damage to a vehicle I rent?
This damage will be covered only if that type of coverage is purchased.
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Can other people drive my business vehicle?
Other people may drive your vehicle with your permission. It is important that they be listed on your policy if they are regular drivers of the vehicle.
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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. Examples of estimated auditable items include sales and payroll. Audits can be performed onsite by an auditor or via mail or telephone. A premium is charged for audit estimations.
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Why do I need certificates of insurance from sub-contractors?
An audit may require you to show proof that sub-contractors have their own insurance coverage. The sub-contractors' certificates of insurance will prevent you from being charged for their exposure.
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What is General Liability?
General Liability provides coverage if you are liable for damages to other individuals arising from your premises, general operations (ongoing and after completion) and products manufactured or sold.
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What is Business Interruption/Extra Expense coverage?
Business Interruption/Extra Expense coverage provides coverage for income loss and the expense of establishing a temporary site during repairs due to damages related to a fire or compensable loss.
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Life Insurance
How much life insurance should an individual own?
Rough "rules of thumb" suggest an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed.
Important factors include:
- Income sources (and amounts) other than salary/earnings;
- Whether or not the individual is married and, if so, what is the spouse's earning capacity;
- The number of individuals who are financially dependent on the insured;
- The amount of death benefits payable from Social Security and from an employer sponsored life insurance plan; and
- Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need), etc.;
It is recommended that a person's insurance advisor be contacted for a precise calculation of how much life insurance is needed.
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What about purchasing life insurance on a spouse and on children?
In certain circumstances, it may be advisable to purchase life insurance on children; generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s). It is of utmost importance that the income earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance before contemplating the purchase of life insurance on children or on a non-wage earning spouse. 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.
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Should term insurance or cash value life insurance be purchased?
Although a difficult question--one whose answer will vary depending on circumstances--several principles should be followed in addressing this issue.
It must first be recognized that in any life insurance purchasing decision, there are at least two basic questions that must be answered:
- "How much life insurance should I buy?"; and
- "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 in which this needed amount of insurance can be afforded is through the purchase of term insurance with its lower premium.
If your ability (and willingness) 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--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.
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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, e.g., 15, 20, 25 or 30 years. Although the face amount decreases over time, the premium is usually level in amount. Further, the premium payment period often is shorter than the maximum period of insurance coverage--for example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.
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