Automobile
Question:
What should I consider when purchasing automobile insurance?
Answer:
There are a several factors you should consider when purchasing any product or service, and insurance is no different. Here is a checklist of things you should consider when purchasing automobile insurance.
- Don't base your decision on price alone. Base your decision on value - what you get for what you pay. Consider the quality of the company's claims service and consumer education.
- Purchase the amount of liability coverage, which makes sense for you.
- You should decide which optional coverage you want. For example, do you want optional physical damage coverage or is the market value of your vehicle too low to warrant purchasing this coverage.
Question:
What are some things I can do to lower my automobile insurance rates?
Answer:
There are a several things you can do to lower the cost of your automobile insurance. The easiest thing is to discuss and review your policy with your independent agent.
When shopping for auto insurance, be careful to make sure each insurer is offering the same coverage, in other words compare oranges to oranges. Many insurers use the “Insurance Standard Office” (ISO) policy forms, but this is not always the case.
Another way to lower the cost of your automobile insurance is to look for any discounts that you may qualify for. For example, many insurers will offer you a discount if you insure multiple cars under the same policy, or if you have had a driver education class in the last five years. Be sure to ask your agent or your company about their discount plans.
Another easy way to lower the cost of your automobile insurance is to increase the deductible. Simply raising your deductible from $250 to $500 can lower your premium. However, you should be careful to make sure that you have the financial resources necessary to handle the larger deductible.
Question:
Should insurance be purchased on an older car whose current market value is very low?
Answer:
Most states have enacted compulsory insurance laws that require drivers to have at least some automobile liability insurance. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent.
Except for the liability coverage that you are required to purchase, many people with older cars decide not to purchase any physical damage coverage. 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
Question:
Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?
Answer:
Whenever you knowingly loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, they are still covered under your automobile insurance policy as long they had a reasonable belief that you would have given them permission to drive the car.
Question:
What is the difference between collision physical damage coverage and comprehensive physical damage coverage?
Answer:
Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.
Comprehensive provides coverage for most other direct physical damage losses you could incur. For example, damage to your car from a hailstorm, theft, vandalism, glass breakage etc. will be covered under comprehensive coverage.
It is important to know the differences between the collision and comprehensive coverage for a couple of reasons.
- To make an informed purchasing decision about these optional coverages, you need to know the difference between them.
- The deductibles under the collision and comprehensive coverage are often different.
Question:
What factors can affect the cost of my automobile insurance?
Answer:
Several factors can affect the cost of your automobile insurance - some of which you can control and some which are beyond your control.
Some factors that affect the cost of your insurance include the type of car you drive. If you use your car to commute to work or school, your driving record, where you live, even how you use credit can all affect how much your automobile insurance will cost you.
Homeowners
Question:
What is homeowners insurance and who should buy this type of coverage?
Answer:
Homeowners insurance is one of the most popular forms of personal lines insurance on the market today. The typical homeowners policy has two main sections: Section I covers the property of the insured and Section II provides personal liability coverage to the insured. Almost anyone who owns, rents or leases property has a need for this type of insurance. And many times, the lender requires homeowners insurance as part of the requirements to obtain a mortgage.
Question:
What is the difference between "actual cash value" and "replacement cost?"
Answer:
Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.
Question:
What factors should I consider when purchasing homeowners insurance?
Answer:
There are several factors you should consider when purchasing any product or service, and insurance is no different.
Here is a checklist of things you should consider when you purchase homeowners insurance.
- First and foremost, purchase the amount and type of insurance that you need. Most companies require that you insure your home for 100% of the cost to replace your home. The replacement cost is different than the purchase price or the tax assessed value. In the event of a loss, some companies may apply a co-insurance penalty if you underinsure your home. Other companies apply a limit or “cap” on their replacement cost feature, which may require a significant out-of-pocket expense to you if you underinsure.
- Determine the amount of personal property insurance coverage that you need. Many companies automatically extend a certain percentage of the dwelling amount to personal property. This may or may not be increased/decreased depending on the company.
- Determine the amount of personal liability coverage that you need.
- Determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement or earthquake coverage?
- Homeowner policies have maximum limits for some specific categories such as jewelry, furs, fine arts etc. If you own property in these categories, you may want to consider specifically adding coverage for these items.
Question:
What are some practical things I can do to lower the cost of my homeowners insurance?
Answer:
There are several things you can do to lower the cost of your homeowners insurance. The easiest thing is to discuss and review your policy with your independent agent.
When shopping for homeowners insurance, be careful to make sure each insurer is offering the same coverage, in other words compare oranges to oranges. Many insurers use the “Insurance Standard Office” (ISO) policy forms, but this is not always the case.
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 times, 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 your agent or company about any discounts that you may qualify for.
Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 or $500 to $1,000 or higher will lower your premium. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible.
Question:
What is “scheduled personal property”?
Answer:
Scheduling personal property is a convenient way to help protect your valuable personal property. Scheduled Personal Property is generally an endorsement to your Homeowner, Condominium, Mobile Home or Renter policy, which provides additional and broader coverage; and generally with no deductible.
Question:
Do I need earthquake coverage? How can I get it?
Answer:
Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. Coverage is generally added as an endorsement to the homeowners policy and has a separate deductible. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.
Question:
Do I need Flood Coverage?
Answer:
Your lender may require that you obtain flood coverage if your property lies in a flood plain as determined by US Government Flood Maps. However, since flood coverage is not covered under the standard homeowners insurance, you may purchase this coverage to protect yourself even if your property is not in a flood plain. |
