Frequently Asked Questions

Below we have compiled a list of questions that our clients commonly ask. If you have a question that is not answered below, or you just need further clarification, please contact one of our insurance experts and we will make sure you receive a satisfactory answer to each and every question.

Click on any insurance type at the top of the list to filter the questions into common insurance categories.

Why do car insurance premiums change?

Auto insurance premiums change for the same reasons that the price of other goods and services you buy change.

Insurance companies incur the same costs you do in buying goods and services, and these costs can ultimately affect your insurance premium.  Costs affecting the ultimate price of Auto insurance include:

  • Medical costs to treat injuries
  • Auto repair costs
  • Costs to adjust claims
  • Inflation
  • Uninsured drivers (carrying the appropriate coverages, your policy will pay when the other driver doesn’t have an auto insurance policy)

Although insurance companies can’t directly control these costs, they are regularly monitored to see how they are affecting the costs of the claims the companies pay. As they change, auto premiums must be adjusted. These costs can affect your auto insurance premium whether or not you personally have had an accident or claim.

Changes you make to your auto insurance policy or coverage may also change the premium. Adding or removing a driver, buying a new car, moving to a new location or changing how you use your car may influence the cost of your auto insurance.

What deductible should I choose?

The higher the deductible, the lower the premium – but the more you’ll pay out of pocket in case of a claim. The lower the deductible, the higher the premium – but the less you’ll pay if you have an insured claim.

Does the kind of car I drive influence my Auto insurance rates?

The car you drive can have a substantial impact on your Auto insurance premium, especially the amount you pay for your comprehensive and collision coverage. The insurance rates for comprehensive and collision coverage are determined by looking at the type of vehicle loss history – how often it is stolen, and how costly it is to repair or replace after an accident.

Can other people drive my 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 or live in your household.  However, anyone who borrows your vehicle is responsible for their own injuries should they be involved in an accident.  It is always a good precautionary measure to confirm that any person who drives your vehicle is insured.

How does the insurance company determine the Replacement Cost of my home?

Your home is probably the single largest investment you’ll ever make. By insuring your home, you are helping to protect your investment and your equity.

Estimating your home’s value is how the insurance company determines the amount of insurance required to adequately cover your home. The primary factors that will determine the cost to rebuild your home include:

  • Local construction costs and the square footage of the structure
  • The type of exterior wall construction – frame, masonry (brick or stone) or veneer – and the type of roof
  • The style of the house (ranch, colonial)
  • The number of bathrooms and other rooms
  • The latest building codes in your community.  If your home is severely damaged, you might have to rebuild it to comply with new building code standards which may require a change in design or building materials
  • Improvements or additions to your house
  • Attached garages, pools, or other outbuildings

Replacement Cost is not the equivalent of Market Value. The cost of rebuilding your house may be higher than the price you paid for it or the price you could sell it for today.  Additionally, some banks require you to buy homeowners insurance to cover the amount of your mortgage.  However, Replacement Cost is not based on your loan amount, but what it costs to rebuild your home, should you have a total loss.

What kind of protection do I need against liability claims?

Nothing is worse than the feeling you get when you are responsible for damage to someone else’s property or for someone else’s injuries.  This is why personal homeowners policies typically include liability coverage.

This coverage protects you and your family against property damage or bodily injury claims for which you are legally responsible. Liability insurance covers you, for example, if someone slips and falls on your property or if your dog bites someone.

Today, when multimillion-dollar lawsuits are common, your homeowners policy may provide substantial liability limits.

How can I receive credit on my homeowners premium?

There may be things about your home that help reduce the risk of damage to the structure.

  • Central Burglar and Fire Alarm Systems that are centrally linked to local emergency response centers.  Have your alarm monitoring company send a certificate of service to your agent to redeem your credit.
  • Interior sprinkler systems for fire prevention.  Have your sprinkler servicing company send a copy of your most recent annual inspection to your agent.
  • Wind Mitigation Credits.  A Uniform Mitigation Inspection may report features of your home that can earn you discounts on your premium.  Mitigation features may include things such as:
    • Age of our roof (replacement after 2002)
    • How your roof is attached to the building
    • Roof to wall connections
    • Secondary water resistance
    • Hurricane shutters or shatter resistance windows
    • Shape of your roof (Hip vs. Gable)

Is flood insurance included in a homeowners policy?

No.  Protection against flooding is never included in a homeowners policy.  Flood Insurance is a federal program that must be applied for separately.  Water damage, however, (such as a burst pipe or leaking toilet) is covered under most standard homeowners policies.

Who Needs Life Insurance?

Your need for life insurance varies with your age and responsibilities. It is a very important part of financial planning. There are several reasons to purchase life insurance. You may need to replace income that would be lost with the death of a wage earner. You may want to make sure your dependents do not incur significant debt when you die. Life insurance may allow them to keep assets versus selling them to pay outstanding bills or taxes.  Consumers should consider the following factors when purchasing life insurance:

  • Medical expenses previous to death, burial costs, and estate taxes
  • Support while remaining family members try to secure employment
  • Continued monthly bills and expenses, day-care costs, college tuition and retirement

What is the Right Kind of Life Insurance?

All policies are not the same. Some give coverage for your lifetime and others cover you for a specific number of years. Some build up cash values and others do not. Some policies combine different kinds of insurance, and others let you change from one kind of insurance to another. Some policies may offer other benefits while you are still living. There are two basic types of life insurance: Term Insurance and Whole Life Insurance.

Term Insurance

Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income.

Term insurance covers you for a term of one or more years. It pays a death benefit only if you die in that term. Term insurance generally offers the largest insurance protection for your premium dollar. It generally does not build up cash value.

Whole Life Insurance

Permanent insurance (such as whole life) provides long-term financial protection. These policies include both a death benefit and, in some cases, cash savings. Because of the savings element, premiums tend to be higher.

How Much Life Insurance Do I Need?

Ask yourself the following questions:

  • How much of the family income do I provide?
  • If I were to die, how would my survivors, especially my children, get by?
  • Does anyone else depend on me financially, such as a parent, grandparent, brother or sister?
  • Do I have children for whom I would like to set aside money to finish their education in the event of my death?
  • How will my family pay final expenses and repay debts after my death?
  • Do I have family members or organizations to which I would like to leave money?
  • Will there be estate taxes to pay after my death?
  • How will inflation affect future needs?

What type of insurance do I need to cover my business?

Commercial insurance includes two main categories of insurance to cover the various coverage lines, property insurance, and liability insurance. Your business may not need all of the types of coverage that are available. Your insurance agent should be able to advise you as to the exposures that are typical in your industry and propose coverage options that address your circumstances. It is your responsibility, however, to select the options you need to adequately cover your business exposures.

What limit of insurance is adequate for my property?

A separate limit must be determined for each building or structure, and for the business personal contents of each building or structure. Most companies require you to fully insure the value of your building at either the actual cash value (ACV) or the cost to rebuild. An ACV basis takes into account depreciation of the building, whereas Replacement Cost is the cost to repair or replace without applying depreciation. The building limit also includes the value of permanently installed fixtures, machinery and equipment, so be sure to consider those items when determining the value of the building. If a building is not insured to the extent required by the policy, you can be subject to a coinsurance penalty at the time of a loss.

How does the coinsurance penalty apply?

The coinsurance penalty is determined by the ratio of the limit of insurance you are carrying on the building or property to the limit the policy requires you to carry. For example, if the cost to replace a building is $100,000 and the policy requires you to insure to 100%, you should carry $100,000 on that building. If you have chosen to insure the building for $80,000, the policy will only cover 80% (80,000/100,000) of any covered loss, less the deductible.

When do you need Commercial Auto insurance?

A commercial auto policy is needed if employees operate the vehicle or if the ownership of the vehicle is in the name of a corporation or partnership.  Also, if you are using your vehicle to transport goods or people for a fee or if you use your vehicle to conduct a service you are required to carry commercial auto insurance. You might also need a commercial policy if you need higher limits of liability because of the nature of your work.

Who Needs Workers Compensation Coverage?

If any of the following apply to you:

  • If you are in an industry, other than construction, and have four (4) or more employees, full-time or part-time, you are required to carry workers’ compensation coverage (an exempted corporate officer does not count as an employee).
  • If you are in the construction industry, and have one (1) or more employees (including yourself), you are required to carry workers’ compensation coverage (an exempted corporate officer or member of a limited liability company does not count as an employee).
  • If you are a state or local government, you are required to carry workers’ compensation coverage.
  • If you are a farmer, and have more than five (5) regular employees and/or twelve (12) or more other workers for seasonal agricultural labor lasting thirty (30) days or more, you are required to carry workers’ compensation coverage.

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