| 1. |
Will my personal auto policy provide coverage if I use my vehicle
for business purposes? [Back to Top]
Some insurers may provide coverage for business use vehicles
depending upon the type of vehicle and its particular use in
business, but you may need to purchase a commercial auto policy
to receive the coverage you need. You should consult with an
insurer or insurance agent or producer to determine the proper
policy needed.
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| 2. |
If I go on vacation and rent a vehicle, will my auto policy provide
coverage while I am driving the rental vehicle or must I purchase
coverage from the rental company?
[Back to Top]
If you vacation within the United States (and in many cases Canada),
for liability coverage, the policy carried by the rental company will
be primary (pay first), and your policy will be excess (pay second)
if the rental company"s limits are not enough to pay for the injuries
or property damages you cause. For physical damage to the rental
vehicle, some companies insurance allow the coverages you have
under your comprehensive and collisions coverages to apply to the
rental vehicle, subject to the deductible stated in your policy. Before
renting, check with your insurance agent to determine if your coverage
applies to the rental vehicle.
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| 3. |
What is typically covered under Comprehensive coverage?
[Back to Top]
Some of the coverages provided under Comprehensive include theft of
all or part of the vehicle, glass breakage, and damage due to fire,
windstorm, hail, water, falling objects, vandalism, explosion, or
hitting a bird or animal.
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| 4. |
What is covered under Collision coverage?
[Back to Top]
Collision coverage pays if your auto collides with an object, including
another car, or if it overturns. Your insurer will pay to repair these
damages even if the collision is your fault.
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| 5. |
I have an older vehicle which I do not care to insure for comprehensive
and collisions coverages. Is there any reason why I should carry higher
than minimum liability limits?
[Back to Top]
If you have assets you need to protect, you may want to carry higher
than minimum liability limits to protect yourself from lawsuits by a
person or persons you may injure in an accident.
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| 6. |
What is covered under Bodily Injury coverage?
[Back to Top]
Bodily Injury pays for bodily injury to others for which you become
legally responsible due to an auto accident in which you were involved.
It does not pay for bodily injury you may sustain. You would need to
have Medical Payments coverage in order to have the injuries you sustain
in an auto accident covered under an auto policy.
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| 7. |
Does Property Damage coverage provide coverage to fix my vehicle
if the other driver is at fault and has no insurance?
[Back to Top]
No. Property Damage coverage protects you for damage you may cause
to the vehicles or property of others. You would need to have Collision
coverage on your auto policy in order to have coverage to fix or replace
your vehicle in this situation.
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| 8. |
How is the deductible for Comprehensive or Collision coverage applied?
[Back to Top]
The deductible for Comprehensive or Collision applies to each loss that
occurs to your vehicle. A deductible is the dollar amount you will have
to pay toward the loss before the insurer begins to make payments on
the loss.
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| 9. |
What is covered under Medical Payments coverage and to whom does
the coverage apply? [Back to Top]
You will need to read your policy for a complete description of the
coverage provided. Basically, Medical Payments coverage provides
coverage for necessary and reasonable medical and funeral expenses
incurred as the result of an automobile accident up to the limit stated
in the policy for you or passengers in your vehicle.
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| 10. |
If I already have health insurance, do I need to carry Medical Payments
insurance on my auto policy?
[Back to Top]
Even though you have major medical insurance, you may still wish
to carry some medical payments insurance to cover deductibles and
co-payments which are not covered by your health insurance plan.
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| 11. |
What is the difference between Uninsured and Underinsured Motorist
coverages? [Back to Top]
Uninsured Motorist coverage protects you or passengers in your vehicle
for bodily injury you or your passengers sustain in an accident involving
a driver who has no liability coverage. Underinsured Motorist coverage
protects you or passengers in your vehicle for bodily injury you or your
passengers sustain in an accident involving a driver who has insufficient
insurance to cover the injuries of you or your passengers.
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| 12. |
If everyone is required to purchase liability coverage, why do I need
Uninsured Motorist coverage?
[Back to Top]
Even though the law requires all motorists to carry liability
insurance, not all motorists have liability coverage in force.
Also, motorists may come from other states or countries and not
have liability coverage on their vehicles.
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| 13. |
What does Rental Reimbursement coverage provide, and does it provide
coverage if I take my vehicle to a shop for mechanical repairs?
[Back to Top]
Rental Reimbursement coverage provides a specified amount for you
to rent a vehicle while your covered auto is being repaired or
replaced after it has been damaged because of a loss covered under
Comprehensive or Collision. It does not provide coverage for
mechanical repairs that result from mechanical breakdown that are
not related to a comprehensive or collision loss.
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| 14. |
If I borrow a car from a friend or relative, will my policy cover me
while I am driving the borrowed car?
[Back to Top]
The policy covering the vehicle would be primary and in most cases,
your policy would cover the vehicle on an excess basis. If no policy
covers the borrowed car, most companies will treat your policy as the
primary coverage for the borrowed car. (Primary means that policy
will provide coverage first, and excess means that policy will provide
coverage after the limits of the primary policy have been exhausted.)
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| 15. |
What should I do if I have an accident?
[Back to Top]
First, discuss with your insurance agent what steps they recommend.
You may also wish to refer to your insurance identification card, as
the steps you need to follow may be listed on the card.
Generally you should first notify the police. Then write down the
names, addresses, telephone numbers and license numbers of persons
involved and of witnesses. Also write down the license plate number
and state of each vehicle involved. You may even want to keep a
disposable camera in your glove compartment to take photos of the
accident. Do not admit fault, and do not discuss the accident with
anyone except your insurer representative or insurance agent or
producer, or the police. Notify your insurance agent or producer
promptly. Cooperate and answer all questions fully. Take notes
whenever you talk with insurer employees, your insurance agent,
lawyers, police or others about the accident. Write down the date,
times, names and subjects you talked about and include all decisions
or promises made. Save your receipts for such items as car rental
or a hotel room if the accident happens out of town, and save copies
of all documents you send or receive.
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| 16. |
I have not had any accidents or violations, so why do my auto insurance
premiums continue to increase?
[Back to Top]
An insurer"s premium increases are a direct reflection of the
countrywide or statewide pool of losses that the insurer experiences.
The losses of the few within the insurer"s pool of policyholders are
paid for by all policyholders within the pool. This is the basic premise
upon which the concept of insurance is based and without which no
insurance would be available. This does not mean that your own
favorable loss experience cannot be recognized. Various insurers
give numerous discounts to policyholders which recognize their
excellent driving records. (See next question for type of discounts.)
Other reasons for the increase in the cost of auto insurance are
attributable to the costs to settle losses such as the costs to repair
vehicles and the medical costs for injured persons which continue to
rise. The increase in lawsuits is also a major factor in insurer rate
increases.
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| 17. |
Is there any way that I can reduce my premiums?
[Back to Top]
First, make sure you are taking advantage of the discounts offered by
your insurer. Most insurers provide discounts for at least some of the
following: accident free drivers discount; a package discount for insuring
your home and auto with the same insurer; multiple auto discount; good
student discount; nonsmokers discount; and passive restraint discount
(for vehicles with air bags or automatic seat belts). Talk with your
insurance agent for detail regarding your policy.
Second, drive safely. Avoid tickets and accidents. Don"t drink and drive.
A poor driving record adversely affects your rates.
Third, drive a safe reliable vehicle. Before purchasing a new vehicle
consider the cost of insurance. Some vehicles such as sports cars, SUV"s,
and other high-profile vehicles cost more to insure.
Fourth, discuss with your insurance agent to make sure that you have
appropriate coverages for you and your vehicle. You may consider higher
deductibles for your comprehensive and collision coverages.
Finally, be pro-active regarding your credit or insurance score. Many
insurers offer discounts for good credit. Understanding and maintaining
a good credit score may significantly reduce your premiums in the future.
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| 18. |
What if my insurance lapses and I drive without insurance?
[Back to Top]
If you are un-insured you may be ticketed and fined, your vehicle
registration may be suspended, your drivers" license could be
suspended and your vehicle could be impounded. If you cause an
accident you (and your parents if you are living at home) could
be sued. When you apply for insurance again you typically will
pay more for your insurance because most insurance companies
charge higher rates for previously uninsured drivers.
|
| 1. |
How much home insurance do I need?
[Back to Top]
Asset Protection: More coverage generally means you will have
less to pay out of your own pocket if disaster strikes. You must
determine the amount you can financially afford to lose. Depending
upon your determination, more insurance may be the answer.
You should insure your property to the value you believe your
home is worth to obtain maximum protection. You need enough
liability coverage to protect yourself from lawsuits resulting from
your possible negligence.
Lender Requirements: Your lender may require you to cover the
house for at least the amount of the mortgage. This may be too
little or too much for your individual circumstances. You are not
required to purchase insurance from the insurer recommended by
your lender.
Policy Requirements:Insurers may impose some conditions for
replacement cost protection, to include your insuring the property
to value.
|
| 2. |
What affects home insurance prices?
[Back to Top]
Type of Construction: Frame houses usually cost more to insure
than brick.
Age of House:New homes may qualify for discounts. Some insurance
companies offer limited coverage or may not insure older homes.
Local Fire Protection: The number of fire hydrants and fire departments
and the availability of water are just some factors which determine your
area"s fire protection class. If you reside in an area without fire protection,
you will pay more for fire insurance.
|
| 3. |
What deductible should I choose?
[Back to Top]
The deductible applies only to coverages on your house and personal
property. It is the amount you have to pay out of your pocket on each
claim. Insurance only attaches once the deductible amount is exceeded.
A policy with a $100 deductible will cost more than one with a $250
deductible. Higher deductibles may be available at a reduced price,
but purchasing, for example, a $250 deductible in lieu of a $100
deductible will mean you will normally pay $150 more out of your
pocket at the time of a loss.
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| 4. |
What does "property damage" cover?
[Back to Top]
Property damage coverage helps pay for damage to your home and
personal property caused by such perils as fire, lightning, windstorm
or hail. The perils of flood and earthquake are not covered. If you
believe you need flood insurance and your insurance company will
not provide it, you may obtain coverage through the Federal
government"s National Flood Program ("NFP"). To learn more about
the NFP you can contact an insurance agent. You should carefully
read your policy before you have a loss to determine exactly what
types of losses will be covered.
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| 5. |
What does "contents insurance" coverage include?
[Back to Top]
In general, the contents of your home and other personal belongings
owned by you or family members who live with you will be covered
under the policy in an amount equal to 50% of the limit of liability
carried on your dwelling. However, high valued personal property
such as jewelry and cameras should be scheduled on the policy so
that you are adequately protected to avoid the possibility of these
items not being fully covered at the time of loss.
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| 6. |
What does "additional living expense" or "loss of use" cover?
[Back to Top]
Most home insurance policies provide for the necessary increase in
expenses you incur if your home is damaged by an insured event
and you cannot live there while repairs are being made or if you
are denied access to your home by government order. The coverage
is generally subject to duration limits and commonly covers any
expense incurred by you so that your household can maintain its
normal standard of living. In some instances, this coverage may
include the costs of a motel, eating in a restaurant, or storing
some of your property.
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| 7. |
What Is "personal liability insurance" coverage?
[Back to Top]
Personal Liability Coverage protects you and all family members
who live with you against a claim or lawsuit resulting from (non-auto
and non-business) bodily injury or property damage to others and
for which you become legally obligated to pay. Defense costs are
included, but the insurance company has no duty to defend you after
the limit of liability on the policy has been exhausted.
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| 8. |
What does "medical payments insurance" cover?
[Back to Top]
Regardless of who is at fault, this coverage pays the reasonable
expenses for others accidentally injured on your premises or the
areas immediately adjoining your property such as sidewalks or alleys.
Medical Payments Coverage does not apply to your own injuries or those
of family members living with you or injuries arising out of activities
involving a business that you operate out of your home, your intentional
acts, or arising out of the rental of your premises.
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| 9. |
What is "replacement cost"?
[Back to Top]
Replacement Cost is the amount necessary to replace or rebuild
your home or repair damages with materials of similar kind and
quality without deducting for depreciation. (Depreciation is the
decrease in the home"s value since the time it was built because
of age or wear and tear.)
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| 10. |
What is "actual cash value"?
[Back to Top]
Actual Cash Value usually means the sum of money required at the
time of the loss to repair or replace the property destroyed, less
an amount for depreciation. Actual Cash Value equals the replacement
cost less depreciation. Most standard home insurance policies cover
the contents of your home (i.e., personal belongings) on an actual
cash value basis, but it is possible to purchase replacement cost.
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| 11. |
What if I"m found liable for injuring another person?
[Back to Top]
As long as the injury was due to your negligence and was not
intentional, your homeowner"s policy should cover any medical
bills and legal expenses, up to the liability policy limits.
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| 12. |
What kinds of damage does a basic homeowner"s policy cover?
[Back to Top]
Most basic policies protect against damage from: Fire and
lightning, windstorm and hail, explosion, riot and civil
commotion, aircraft, vehicles, smoke, vandalism and malicious
mischief, theft, damage by glass or glazing material that is
part of a building, and volcanic eruption.
You can also step up coverage to include: Falling objects,
weight of ice, snow, and sleet, water-related damage from
home utilities or appliances, electrical surge damage. Before
any loss call your insurance agent. Protection is subject to
policy limits and deductibles can vary.
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| 13. |
What damage to my house would not be covered by my
homeowner"s policy? [Back to Top]
It depends on the type of policy you own. But in general,unless
you buy additional coverage, you won"t be compensated for losses
due to floods, earthquakes, nuclear accidents, wars, intentional
damage, and normal wear and tear. Call your insurance agent,
other exclusions may also apply.
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| 14. |
If my home is destroyed by a fire, how much money
would the insurance company give me?
[Back to Top]
Insurance companies normally use one of two methods to
figure how much you will be reimbursed for a loss if the amount
is less than your coverage limits. The most common calculation
is the actual cash value, which is the replacement value minus
depreciation. The second calculation is simply the replacement
cost of the lost property with no depreciation, but usually with
a maximum value. Also, don"t forget that the company will
subtract the amount of your deductible from the settlement.
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| 15. |
How will I be able to recall the contents of my home if it
is destroyed? [Back to Top]
It"s wise to generate a detailed list of your possessions. Making
a video or photographic record of your possessions is advisable,
as well. You may want to consider storing your inventory in a
safe-deposit box off your property, or at least in a lockable
fireproof storage box in your home. Not only will a record of
your possessions take most of the guesswork out of filing a claim,
police say such documentation can help you prove ownership in
case your belongings are recovered from a thief. Also, you may
want to videotape or photograph the mess after a disaster and
before you begin the cleanup. This can help you prove the extent
of damage without having to wait to get your life back in order.
Always contact your insurance agent and your insurance carrier
before any claim is filed and before any clean-up is preformed.
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| 16. |
What can I do about expensive possessions, like jewelry and
camera equipment, that are far more valuable than the coverage
limits of my homeowner"s policy?
[Back to Top]
You can purchase additional coverage, through an endorsement to
your existing policy or with a separate policy, to extend the limits
of coverage for specific items. Talk with your insurance agent.
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| 17. |
I want to buy a condominium. Will my homeowner"s policy be
different from the one I had when I owned a house?
[Back to Top]
Insuring a condominium is different from insuring a house because
of the way ownership is structured. A homeowner"s policy covers
against losses, and you can only suffer a loss if you have ownership.
Because there are areas of common ownership in a condominium
complex, your homeowners association may have a master policy.
The extent of the coverage you buy will depend on what the master
policy covers. The standard homeowner"s policy for condominiums
is called HO-6. It will likely cover your personal property, shield
you and your family from some types of liability, plus pay to repair
any portion of the unit you own under the terms of the condominium
or cooperative documents.
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| 18. |
I"m renting an apartment. Will my landlord"s insurance cover
my belongings if the building burns down?
[Back to Top]
If you rent an apartment or a house, the building owner is responsible
for any perils that befall the property. Rest assured, if the place burns
down, your landlord"s insurance is responsible to compensate him for
damage to the structure. But if your personal belongings - your furniture,
your stereo, your clothing - are destroyed, it"s you who loses; unless
you have renter"s insurance. Renter"s insurance is a kind of homeowner"s
policy for non-homeowners. It contains most of the same provisions of
a basic homeowner"s policy, except the part that covers the home itself.
Up to certain limits, a renter"s policy covers your personal belongings
against destruction or theft, and protects you against claims of liability
if you cause injury to someone or an individual"s property.
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| 19. |
Besides me, who else is covered under my homeowner"s policy?
[Back to Top]
In general, a homeowner"s policy will have a named insured, which is
usually the owner or tenant named on the deed or lease. The named
insured"s spouse is covered as well, even if he or she is not named
on the policy declaration. Other users and residents also may be
covered to a lesser extent by the personal property and liability
provisions in the policy. For instance, the insured"s children or
someone under 21 in the insured"s care would likely be covered.
Employees such as gardeners or housekeepers may also be covered
against loss of personal property on the premises. And you may
also extend coverage to your guests if you make a request to your
insurance company in advance.
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