Auto Insurance FAQ's

Why Do I Need Auto Insurance Coverage?

If you own or operate a motor vehicle, auto insurance coverage is mandatory in most states. In addition, auto insurance protects you from financial loss in the event of an accident. Not only does auto insurance help pay for repairs to your vehicle and medical bills following an accident, but it also allows you to take to the road with peace of mind, knowing that you are protected from the unforeseeable.

What can affect my rates?

Factors Affecting Auto Insurance Rates

Before receiving a car insurance quote, it’s important to know that the following factors may affect your rates:

  • Vehicle: The make, model, year and vehicle features
  • Driving Record: The number of driving violations, as well as accidents
  • Your Geographic Area: Where you live and drive your vehicle
  • Vehicle Use: How your vehicle is used, such as for pleasure or commuting to work or school
  • Age: The age of the drivers covered on your policy and whether there are any drivers under the age of 25
  • Credit History: Information found on your credit report, such as payment history, debt, bankruptcies, and other factors that predict your likelihood of making a claim
  • Deductible: The rates you pay are affected by the more amount you agree to pay out of pocket at the time of a claim, The higher your deductible, the lower your car insurance premiums will may be.

What coverage do I need?

Based on what state you live in, auto insurance requirements will vary. The coverages found on most auto-insurance policies include:

  • Liability Coverages: These coverages include Bodily Injury coverage, which protects you in the event that you injure another person in an accident, and Property Damage coverage, which protects you in the event that you damage another person’s personal property.
  • Uninsured Motorist: Protects you and your passengers in the event that you are seriously injured by an uninsured driver.
  • Underinsured Motorist: Protects you and your passengers from losses and damages suffered if injury is caused by the negligence of a driver who does not have enough insurance to pay for all losses and damages.
  • Full Coverage: Full coverage is a term commonly used to refer to Collision and Comprehensive coverages. Collision coverage pays for damage to your vehicle caused by its collision with another object. Comprehensive coverage pays for damage resulting from most causes other than collision.

What do I need for an Auto Quote?

To give you an accurate auto insurance quote, we need to know about your vehicle and how you use it. Before speaking with our agents, please be prepared with the following information about your vehicle:

  • VIN number
  • The make, model, & year
  • Specific model information, such as engine type or body type
  • Whether it is owned or leased
  • Primary use, such as for personal commute or business
  • Safety features it may have, such as anti-theft devices or air bags

In addition to information on your vehicle, we would like to learn more about you. Our agents may ask:

  • The age of all drivers and their driving experience
  • Marital status and education background of all drivers
  • The driver’s license status of all drivers
  • Your vehicles’ garaging location
  • Accident and violation history of all drivers

Using this information, we may then obtain a credit history report for an accurate depiction of your financial history.

What is the difference between Collision and Comprehensive coverage for my automobile?

Collision and Comprehensive insurance are often confused. Both protect your vehicle in different ways. Here is the information:

Collision insurance covers damages to your vehicle caused by an accident (collision).

  • Collision insurance pays even if you caused the accident that damaged your car.
  • The recommended amount of Collision coverage varies depending on the age and value of your vehicle.

Comprehensive insurance is also known as “other than collision” insurance or “OTC”. It covers damage done to your vehicle from things other than collisions, such as: vandalism, disasters, theft, fire, impacts with animals, etc.

  • Comprehensive does not cover any damage as a result of a collision.
  • If you live in a high crime area, have a newer model vehicle, or a vehicle that is a common target of theft, Comprehensive insurance is highly recommended.

Am I covered by my own auto insurance when I drive my friend’s vehicle?

Generally, yes. However, in most cases your friend’s insurance would be the primary coverage, meaning you’d only access your own coverage in the event that the limits of his policy were met.

Who is covered by my car insurance?

Any licensed drivers in your household are generally covered to drive your car, as well as anyone else who has permission to use your vehicle.

NOTE: If you exclude someone from your policy, they are NOT covered when driving your car, meaning you could be responsible for all damages if they do take your car out and get into an accident.

Home Insurance FAQ's

What factors can affect homeowners insurance premiums?

The following factors can affect your homeowners insurance premium:

  • Home Features and Characteristics — Your home’s age, type of structure, wiring, roof, garage, etc., can affect your homeowners insurance premium. Older homes can often cost more to insure, and those costs can differ depending on whether your home is brick, frame, stone or has synthetic siding.
  • Location — Where your home is located can change your homeowners insurance premium. For instance, your home insurance rate can be affected if your home is in close proximity to a fire station; is exposed to extreme weather, such as hurricanes, tornadoes or earthquakes; or is in a neighborhood more prone to theft.
  • Protective Devices — Burglar alarm systems, smoke detectors, fire extinguishers, sprinkler systems and deadbolt locks can lower your homeowners insurance premium.
  • Personal Factors — What you do can affect your homeowners insurance premium, too. For instance, smokers may pay more for home insurance than nonsmokers. A good credit history also can lower what you pay for home insurance.
  • Claims History — If you have a history of claims on a homeowners insurance policy, you may pay a higher premium.

Am I required to have homeowners insurance if I own a home?

Unlike driving a car, you can legally own a home without homeowners insurance. However, if you finance your home with a mortgage, your lender most likely will require you to have home insurance coverage to protect your home in case of damage cause by unforeseen circumstances, such as fires or natural disasters.

If you live in an area that is prone to flooding or earthquakes, your lender may also require you to purchase flood insurance or earthquake insurance.

After you pay off your mortgage, you aren’t required to have home insurance. However, you should keep your home insurance policy active to avoid risking what you’ve invested in your home.

If you purchase a condominium or co-op, your board may require you to buy condo insurance or home insurance. Be sure to check with your board to see what type of policy is required.

If you’re looking to insure a townhouse and your townhome association has a master policy (which typically covers the structure and common areas), you’ll get renters insurance. If your association does not have a master policy, you’ll get homeowners insurance.

Why should I complete a home inventory?

When you purchase a home and a homeowners insurance policy, you should create an up-to-date home inventory to expedite a claim settlement if you ever need to make one. With a complete home inventory, your insurance company can verify property easier, which makes settling your claim easier. Plus, you can easily verify losses for your income tax return with an updated home inventory.

What is the difference between bodily injury liability coverage and medical payments coverage?

Although homeowners insurance policies differ in their actual structure, most contain the same basic components:

Declarations Page — Usually the first page of your homeowners insurance policy, it typically contains the following summary information:

  • Name and address of the insured
  • Dollar amount of coverage in the policy
  • Description of the insured property
  • Cost of the insurance
  • Name of the insurance company insuring the risk
  • Contact information

Definitions — Explain the meaning of terms used in the policy.

Coverage — Details the extent of protection for both property (house, structures, contents) and liability (bodily injury or property damage to others for which you are liable) in your homeowners insurance policy.

Exclusions — Explanation of what is not covered by your homeowners insurance policy, under both property and liability coverage.

Conditions — Outline the responsibilities of both the insured and insurance company under the policy. Your duties in the event of a loss and also the procedures the company will follow to settle any losses are detailed here.

Endorsements — Riders, amendments or attachments that alter the standard coverage provided by your home insurance policy. If you choose endorsements for your policy, you may pay an additional premium for them.

Life Insurance FAQ's

What Does Life Insurance Cover?

In its basic form, a life insurance policy provides death benefits and is designed to cover loss of income, end-of-life expenses, funeral costs and other financial needs that a family may have if you – the policyholder – should die unexpectedly.

While death benefits are often designated for funeral expenses and income replacement, life insurance is a very flexible type of coverage that can be used in numerous ways.

For example:

  • Cost of living: Life insurance can cover your family’s vital expenses after your passing, such as the payment of your mortgage, outstanding debts and children’s college tuition.
  • Trusts and charities: You can use life insurance policy to create a trust as a financial legacy for your heirs, a chosen charity or other organization.
  • Retirement and estate planning: A permanent life insurance policy can be structured to cover your living costs during your retirement or for estate planning, and can even cover the cost of your life insurance premiums.
  • Business continuation: Business owners often purchase life insurance that can help protect their business in the event they die unexpectedly. For example, a business owner can construct a buy-sell agreement that pays benefits to one or more surviving co-owners who can then purchase the policyholders share of the enterprise.

How Does Life Insurance Work?

A life insurance policy is a contractual arrangement between you, the policyholder, and the life insurance company. The policyholder determines the amount of life insurance coverage required and pays the life insurance company a premium to keep the policy in force.

The way the premium will be paid will also be spelled out in the policy. The premium could be paid to the life insurance company as a lump sum, an annual or semi-annual payment, or monthly amount, for example. The premium must be paid according to the terms of the policy to keep the life insurance policy active.

Should the policyholder die while a life insurance policy is in force, then the life insurance company will pay out the death benefits specified in the policy. Additionally (applicable to permanent life insurance policies only), the insurance company will accumulate a cash value.

Death proceeds are paid as a lump sum to the named beneficiary (the person who will receive the life insurance benefits), as stipulated in the policy.

Should I buy collision insurance if I have an old car?

The cost of life insurance varies considerably based on a number of factors, and can cost anywhere from $15 a month for a young non-smoking female to well over $1,000 a month for a middle-aged male smoker.

Life insurance companies use a rating system based on a number of risk factors such as a person’s age, use of tobacco, overall health status, occupation and a variety of other considerations.

A person who is relatively young, does not smoke and is healthy will likely get a much better rating than someone who has an underlying health condition or risky health habits. Health conditions, high-risk jobs and tobacco use can all make a policyholder risky for an insurance company to cover. A healthy person with a good rating is less of a risk to insure, so that person’s premiums will be lower than for a person who is considered a higher risk.

Here is an overview of some of the many factors that affect your life insurance costs:

  • The type of life insurance you want to buy: Term insurance costs less than permanent life insurance because it only pays a death benefit and does not build up cash value.
  • How much life insurance you want to buy: A $20,000 term policy will cost far less than a $1 million term insurance policy.
  • The age at which you buy your life insurance policy: The cost of life insurance climbs dramatically as you age.
  • Your health profile: If you have no health conditions, your costs will be lower than if you have heart disease, diabetes or other chronic conditions.
  • Whether you buy medically underwritten life insurance: While it is possible to buy “no exam life insurance,” your costs will be much higher because the life insurance company is taking a higher risk to insure you than if you took a medical exam.

Note that every life insurance company uses its own algorithms to determine individual ratings and premiums. No two life insurance companies will quote the same costs for the same person, and the cost of life insurance can vary widely. For this reason, it is important to compare multiple quotes before choosing to buy a policy.

When Should I Get Life Insurance?

Buy life insurance as soon as you determine that it makes sense for you or for your family. Waiting to buy life insurance is costly, as it becomes more expensive as you age. It is also easier to qualify for life insurance when you are young and have no health complications.

Many people buy life insurance as their circumstances change. When you get married, for example, you may consider purchasing life insurance in order to provide death benefits to your spouse in the event of your untimely passing. It is a good idea to evaluate your life insurance anytime you have experienced a change in your overall financial obligations.

For example, you may want to buy life insurance or increase your coverage under these circumstances:

  • When you get married
  • When you start a family
  • When you buy a house
  • When you start up a business
  • If you accumulate personal debt

Life insurance can help to prevent the loss of your income and your debt accumulation from being passed on to your family as a financial burden after your passing

Your life insurance policy coverage should reflect these and other foreseeable financial obligations.