F.A.I.Q’s(Frequently Asked Insurance Questions)

insurance questions


Auto Insurance FAQS
Q. My car is paid off or is old and not worth much. Is an automobile policy essential?

A. Almost all states have insurance laws that require drivers to carry at least the minimum liability insurance.
If your car is older and the cost of repairing your vehicle costs more than the car is worth the insurance company will usually just “total” the vehicle and issue you a check for the market value of the car less the deductible. Many people with older cars decide not to purchase any physical damage coverage at all. On the flip side, if your vehicle is newer and the note is paid off, you may want to consider carrying physical damage coverage unless you can cover a down payment on a new vehicle.

Q. What is the difference between Collision and Comprehensive coverages?

A.Collision Physical Damage Coverage is defined as losses that happen when your automobile collides with another car or object. For example, if you back into a car in a parking lot, the damages to your vehicle will be paid under your collision coverage.

Comprehensive Physical Damage Coverage provides coverage for most other direct physical damage losses that may occur, including theft. For example, hail damage to your car during a storm would be covered under your comprehensive coverage.

Q. What factors determine the cost of my auto insurance premiums?
There are a variety of factors that can affect the cost of your automobile insurance rates; some are under your control, and some aren’t.

A.The kind of car you drive, how far you drive, your driving record, and where the car is garaged can all influence how much your auto insurance premiums will be.

Even your marital status can factor into the cost of insurance. The reasons being data tends to show that married people have fewer and less costly accidents than their single counterparts.

Q. If a friend or family member borrow my car with permission will they be covered by my auto insurance?

A. Your automobile policy protection is extended to anyone you permit to drive your car. You do not need to provide permission explicitly; the other person needs only to have a reasonable belief that they have your authorization while driving.

Q. Am I able to cancel my policy whenever I want?

A. You can cancel a personal insurance policy such as home, boat, auto at any time with a request to the insurance company. Each company is different in what the request is, but most will want it in writing with an insured’s signature.

Q. Can I put any driver I want on my auto policy?

A. You add household members to your policy, as long as you all reside at the same address.

Q.Does my auto insurance protect me while driving in other states? What about another country?

A.Typically, your policy will accommodate for differences in other state requirements if you carry the required minimum coverage for your state. However, protection under your personal automobile policy is only applicable in the United States, US territories and possessions and the provinces of Canada.

Home Insurance FAQS
Q.Does my homeowner policy cover natural disasters such as flood, earthquakes, and hurricanes?

A.Homeowners policies cover many natural disasters, such as hurricanes or tornadoes. However, others like earthquake and flood are not.

Q.What is covered by homeowners insurance?

A.The average homeowner’s policy is divided into two main sections: Section I covers the property of the insured, and Section II provides personal liability coverage for the insured. Virtually anyone who owns or leases property needs this type of insurance. In most scenarios, a lender will require homeowners insurance to obtain a mortgage.

Q.What is the difference between “actual cash value” and “replacement cost” on my homeowner’s insurance?

A.Covered losses under a homeowners policy may be paid on either an actual cash value basis or a replacement cost basis. When “actual cash value” or ACV is used, the policyholder is entitled to the depreciated value of the damaged property. Under the “replacement cost” coverage or RCV, the policyholder is reimbursed an amount required to restore the article with one of the same type and quality at today’s value.

Q.What are some ways that I can bring down the cost of my homeowner’s insurance?

A.There are several things you can do to lower the cost of your premium. Some of those include bundling your home and auto insurance policies, raising your deductibles and asking about discounts you may qualify for such as a monitored home alarm.

Q.What are some things I should consider before buying a homeowners insurance policy?

A.Define the type and amount of insurance you need. Determine any additional coverages you may want such as a jewelry endorsement or an earthquake endorsement. Moreover, you will need to determine your deductibles or how much you want to spend out of pocket when a covered loss occurs.

Commercial or Businessowners Insurance FAQS
Q. What kind of insurance do I need for my business?

A. All businesses no matter the type need liability insurance to protect them against third party claims. Many insurance carriers provide a wide variety of business property and casualty coverages, underwritten individually and customized to your specific business.

Q. What is commercial or business insurance?

A. Commercial or Business insurance refers to a wide variety of insurance coverages that can reduce or mitigate or compensate for exposure to certain hazards for the business or its employees. Certain coverages mandated by law such as unemployment insurance, workers’ compensation social security, and (in some states) state disability also fall under business or commercial insurance.

Q. Why should I buy business insurance?

A.Lawsuits are expensive even if you win; you still are required to pay your attorney fees. With business insurance, you will have coverage in place that could help keep your doors open in the event of a lawsuit or when catastrophe strikes.

Q. What determines the cost of my business insurance?

A. Just as with other types of insurance many factors determine the price of business insurance. The most important are the type of business, the location, size of the business, and sales.

Q. If I file a claim on my business policy, will my premium increase or will I be cancelled?

A.The answer is probably not. One claim is not a cause for concern on the part of most insurance companies. However, a history of claims could result in a premium increase or cancellation. Three claims in three years is viewed differently, for example, then having one only claim. Single claims that are indicative of gross negligence can also result in a significant premium increase or cancellation. An example of this might be an auto accident followed by a conviction of reckless driving or driving under the influence.

Personal Umbrella Insurance FAQSinsurance questions

Q. What is a personal umbrella policy and do I need one?

A. A personal umbrella policy is an added layer of liability insurance that extends over your primary liability policies such as home and auto. If something terrible were to occur, like you seriously hurt or kill somebody in a car accident or someone drowns in your home pool, you want to make sure that your assets are protected. Your umbrella policy would kick in once your primary limits are exhausted on your underlying policies.

Q. What does a personal umbrella policy cover?

A. Personal umbrella policies act as the last line of liability defense in the event the limits of your underlying policies, are used up.

Let’s say you are at the wrong end of a $1,000,000 lawsuit for someone getting hurt.

Your homeowner’s policy has a liability limit of $500,000. The homeowners pays the first $500,000, and you are still obligated to pay the additional $500,000.

If you do not have an umbrella to make up the missing amount, you will be paying out of pocket.

If carried a personal umbrella policy with the standard limit of $1,000,0000 the umbrella would kick in and provide coverage for the additional $500,000 that you owe.

Insurance FAQS

Q. Should I carry flood insurance?

A. If you live an area prone to flooding it is a requirement for most lenders, if you do not it is up to you decided to carry it. It is important to note that floods are excluded from a standard homeowners policy. Moreover, if you are not in a high-risk area, flood insurance policies are pretty inexpensive.

Q. What is a flood zone?

A. There are four different types of flood zones as determined by the national flood insurance program, and they are A, B, C, X.

“A” rated flood zones are considered high risk and carry the most expensive premiums. Flood zones B, C, and X, however, are considered low to moderate risk, and the premiums are much lower relative to zone “A.”

According to FloodSmart.gov, the average premium for $250,000 in building coverage and $100,000 in personal property in a lower risk flood zone is $405 a year.