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Below are some frequently asked questions and answers to assist in your selection.
What is the difference between collision physical damage coverage and comprehensive physical damage coverage?
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, or a grocery cart hits your vehicle, 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, including theft. For example, damage to your car from a hailstorm, falling tree branch, or even glass breakage will be covered under your comprehensive coverage.
What happens if my car is stolen?
If your car was stolen, be prepared to wait. Most insurance companies will impose a waiting period to see if the police recover your car. If your car is still missing after the waiting period, usually 21-30 days, you should receive a settlement soon after. If your car is recovered during the waiting period, the insurance company will want to see a repair estimate before deciding how to proceed.
What factors can affect the cost of my automobile insurance?
A number of factors can affect the cost of your automobile insurance — some of which you can control and some that are beyond your control.
The type of car you drive, how it is used, mileage driven, 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
If I have auto insurance and rent a vehicle, do I still need to buy the rental company’s insurance?
Most auto insurance companies do provide the same coverage for a rental car as you have on your personal vehicle, as long as you’re not using the rental car for business purposes. Always check with your agent to verify coverage.
What are some practical things I can do to lower the cost of my homeowners insurance?
There are a number of things you can do to lower the cost of your homeowners insurance. The easiest thing to do is having a comprehensive review of your policy and needs from your local agent.
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 auto and home insurance with them. Other times, insurers offer discounts if there are deadbolt locks on all your exterior 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 which will lower your premium, sometimes ten percent or more.
What is the difference between "actual cash value" and "replacement cost"?
Covered losses under a home 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.
Do I need earthquake coverage? How can I get it?
The standard insurance policy does not pay for direct damages caused by “earth movement.” “Earth movement” is a much broader term than earthquake. It includes earthquake, volcanic activity and other earth movement. This coverage may be available by endorsement for an additional charge. If you live in an area that is more likely to have an earthquake, you’ll pay more than if you live in an area that is unlikely to have an earthquake. We can help you weigh the costs and benefits of this coverage before you decide to purchase. Usually a 5% to 10% deductible applies.
How much life insurance should an individual own?
“Rule of thumb” suggests an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account when determining the right amount of life insurance for you and your family.
Important factors include:
Salary/earnings and other income.
What can I afford?
Whether or not you are married and, if so, what is your spouse’s earning capacity?
The number of individuals who are financially dependent upon you?
The amount of death benefits payable from Social Security and from an employer-sponsored life insurance plan?
Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need, etc.).Basically what is your debt?
Calculating the correct amount of life insurance to buy is not as simple as it appears. We recommend contacting us for help determining the right amount of coverage. As independent agents, we are unbiased advisors that will help you avoid buying too much, show you appropriate optional coverages for your need and recommend a company that will best serve your interests.
Should term insurance or cash value life insurance be purchased?
This is a difficult question — one whose answer will vary depending on your personal circumstances. Usually boils down to affordability.
First, recognize that in any life insurance purchasing decision, two questions must be answered:
“How much life insurance should I buy?”
“What type of life insurance policy should I buy?”
The first 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 be afford is through the purchase of term insurance, since term insurance has a lower premium. Much higher death benefit for the dollar.
If your 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 second question — what type of policy to buy. Important factors affecting this 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.
What is a personal umbrella liability policy?
The personal umbrella liability policy is designed to increase your liability protection. This single policy acts as an “umbrella” over all of your other personal liability policies — home, auto, boat, RV, etc. — so you have a higher personal liability limit than what would otherwise be available. In certain circumstances, an umbrella policy may provide personal liability coverage that is otherwise excluded from your other policies. For example, an umbrella policy provides coverage anywhere in the world, whereas your auto policy usually provides coverage in the US and Canada only. The more “things” we own, the higher the risk.
How do I know if I need a personal umbrella liability policy?
It used to be that the only people who needed personal umbrella liability policies were wealthy individuals who had sizable amounts of personal assets that would be at risk in a lawsuit.
However, in our very litigious society, even individuals with modest incomes and assets are often subjects of large lawsuits. Since they are even less able than a wealthy individual to pay large damage awards, they recognize the need to have coverage limits greater than what can be obtained from their homeowner or auto policies. In summary, the cost is minimal for the protection it provides.