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Frequently Asked Questions

Below are some of our frequently asked questions. If you have any other questions or concerns, please feel free to contact us.

  1. Are my auto insurance rates affected by where I live?
  2. I work part-time using my car to deliver pizza. Does my insurance cover me while I am working this job?
  3. My agent gave me a quote for car insurance; but when I got the policy, I found the premium was much more than the agent's price. Since I bought the policy for the amount I was quoted by the agent, must I pay the higher amount?
  4. Can the insurance company use after market parts to repair my car?
  5. Must I accept the after market parts utilized by the insurance company in their estimate?
  6. Can I drive legally without insurance?
  7. Can I own a home without homeowners insurance?
  8. How and why it is important to take a home inventory!
  9. Why buy life insurance?
  10. Are there different types of life insurance?
  11. How often should I review my policy?
  12. What does a business owners policy cover?
  13. Do I need professional liability insurance?
  14. Do I need a commercial auto insurance policy?
Are my auto insurance rates affected by where I live?
Yes. Insurance rates are based upon the company's underlying costs, which include the number of claims and the severity of those claims. Every state is divided into many distinct rating territories filed by individual insurers to reflect differences in claim costs in those territories and other considerations. Traffic patterns, population demographics, and the cost of goods and services contribute to insured cost variations. For example, if Town A's loss experience is more severe than that of Town B, then auto premiums in Town A will be higher than those of Town B.

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I work part-time using my car to deliver pizza. Does my insurance cover me while I am working this job?
Probably not. Most private passenger auto insurance policies do not provide coverage when the covered vehicle is used to deliver property, i.e. pizzas or people for a fee (salary, tips, etc.). Coverage would probably be denied if an accident occurred while you were using your personal vehicle to deliver. Check with your employer to determine if the employer would provide you coverage while you are engaged in that employer's work.

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My agent gave me a quote for car insurance; but when I got the policy, I found the premium was much more than the agent's price. Since I bought the policy for the amount I was quoted by the agent, must I pay the higher amount?
If a premium is incorrectly quoted by an agent, due to agent error or carrier error the insurer must nonetheless use only those rates that are filed with the states Property & Casualty Division. Of course you always have the option of asking for revised proposals or having the agent place you with a different carrier.

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Can the insurance company use after market parts to repair my car?
Yes. The insurance company is required, however, to identify each after market part used in the repair estimate and attach a disclosure statement that aftermarket parts were authorized in the estimate.

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Must I accept the after market parts utilized by the insurance company in their estimate?
No. You can request that the repair shop use original manufactured parts but you will have to pay the difference in the cost of the original manufactured and after market parts.

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Can I drive legally without insurance?
NO! Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don't have enough assets, you must purchase at least the state minimum amount of insurance. But insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous.

If you've financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement. 

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Can I own a home without homeowners insurance?
Unlike driving a car, you can legally own a home without homeowners insurance. But, if you have bought your home and financed the purchase with a mortgage, your lender will most likely require you to get homeowners insurance coverage. That's because lenders need to protect their investment in your home in case your house burns down or is badly damaged by a storm, tornado or other disaster. If you live in an area likely to flood, the bank will also require you to purchase flood insurance. Some financial institutions may also require earthquake coverage if you live in a region vulnerable to earthquakes. If you buy a co-op or condominium, your board will probably require you to buy homeowners insurance.

After your mortgage is paid off, no one will force you to buy homeowners insurance. But it doesn't make sense to cancel your policy and risk losing what you've invested in your home. 

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How and why it is important to take a home inventory!
Would you be able to remember all the possessions you've accumulated over the years if they were destroyed by a fire? Having an up-to-date home inventory will help you get your insurance claim settled faster, verify losses for your income tax return and help you purchase the correct amount of insurance.

Start by making a list of your possessions, describing each item and noting where you bought it and its make and model. Clip to your list any sales receipts, purchase contracts, and appraisals you have. For clothing, count the items you own by category -- pants, coats, shoes, for example - making notes about those that are especially valuable. For major appliance and electronic equipment, record their serial numbers usually found on the back or bottom.

  • Don't be put off!
    If you are just setting up a household, starting an inventory list can be relatively simple. If you've been living in the same house for many years, however, the task of creating a list can be daunting. Still, it's better to have an incomplete inventory than nothing at all. Start with recent purchases and then try to remember what you can about older possessions.


  • Higher Value Items!
    Valuable items like jewelry, art work and collectibles may have increased in value since you received them. Check with your agent to make sure that you have adequate insurance for these items. They may need to be insured separately.


  • Take Pictures!
    Besides the list, you can take pictures of rooms and important individual items. On the back of the photos, note what is shown and where you bought it or the make. Don't forget things that are in closets or drawers.


  • Use a Video Recorder!
    Walk through your house or apartment videotaping and describing the contents. Or do the same thing using a tape recorder.


  • Using your computer!
    Use your PC to make your inventory list. Personal finance software packages often include a homeowners room-by-room inventory program.


  • Keep Your list, video and photos safe!
    Regardless of how you do it (written list, floppy disk, photos, videotape or audio tape), keep your inventory along with receipts in your safe deposit box or at a friend's or relative's home. That way you'll be sure to have something to give your insurance representative if your home is damaged. When you make a significant purchase, add the information to your inventory while the details are fresh in your mind.


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Why buy life insurance?
Many financial experts consider life insurance to be the cornerstone of sound financial planning. It is generally a cost-effective way to provide for your loved ones after you are gone. It can be an important tool in the following ways: 

    1. Income replacement
For most people, their key economic asset is their ability to earn a living. If you have dependents, then you need to consider what would happen to them if they no longer have your income to rely on. Proceeds from a life insurance policy can help supplement retirement income. This can be especially useful if the benefits of your surviving spouse or domestic partner will be reduced after your death.

    2. Pay outstanding debts and long-term obligations
Consider life insurance so that your loved ones have the money to offset burial costs, credit card debts and medical expenses not covered by health insurance. In addition, life insurance can be used to pay off the mortgage, supplement \retirement savings and help pay college tuition.

    3. Estate planning
The proceeds of a life insurance policy can be structured to pay estate taxes so that your heirs will not have to liquidate other assets.

    4. Charitable contributions
If you have a favorite charity, you can designate some of the proceeds from your life insurance to go to this organization.

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Are there different types of life insurance?
While there a many different types of life insurance policies, they generally fall into two categories - term and permanent.

Term

Term Insurance is the simplest form of life insurance. It provides financial protection for a specific time, usually from one to 30 years. These policies are relatively inexpensive and are well suited for goals, such as insurance protection during the child-raising years or while paying off a mortgage. They provide a death benefit, but do not offer cash savings.

Purchasing term insurance is like renting a home. It is a short-term solution. Monthly costs are usually lower, but you will not be building equity. Just as many people rent (while saving to buy a home), individuals who need insurance protection now, but have limited resources, may purchase term coverage and then switch to permanent protection. Others may view term insurance as a cost-effective way to protect their family and still have money to put into other investments.

Permanent

Permanent insurance (such as universal life, variable universal life and 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. This type of insurance is good for long-range financial goals.

Purchasing permanent insurance is like buying a home instead of renting. You are taking care of long-term housing needs with a long-term solution. Your monthly costs may be higher than if you rent, but your payments will build equity over time. If you purchase permanent insurance, your premiums will pay a death benefit and may also build cash value that can be accessed in the future. 

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How often should I review my policy?
You should review all of your insurance needs at least once a year. If you have a major life change, you should contact your insurance agent or company representative. The change in your life may have a significant impact on your insurance needs. Life changes may include:
  • Marriage or divorce
  • A child or grandchild who is born or adopted
  • Significant changes in your health or that of your spouse/domestic partner
  • Taking on the financial responsibility of an aging parent
  • Purchasing a new home
  • Refinancing your home
  • Coming into an inheritance


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What does a business owners policy cover?
Insurance companies selling business insurance offer policies that combine protection from all major property and liability risks in one package. (They also sell coverages separately.) One package purchased by small and mid-sized businesses is the businessowners policy (BOP). Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face. 

BOPs include: 

    1. Property insurance for buildings and contents owned by the company -- there are two different forms, standard and special, which provides more comprehensive coverage. 

    2. Business interruption insurance, which covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location. 

    3. Liability protection, which covers your company's legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.

BOPs do NOT cover professional liability, auto insurance, worker's compensation or health and disability insurance. You'll need separate insurance policies to cover professional services, vehicles and your employees.

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Do I need professional liability insurance?
Professionals that operate their own businesses need professional liability insurance in addition to an in-home business or businessowners policy. This protects them against financial losses from lawsuits filed against them by their clients.

Professionals are expected to have extensive technical knowledge or training in their particular area of expertise. They are also expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they cause to another person or business. When liability is limited to acts of negligence, professional liability insurance may be called "errors and omissions" liability. 

Professional liability insurance is a specialty coverage. Professional liability coverage is not provided under homeowners endorsements, in-home business policies or businessowners policies (BOPs). 

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Do I need a commercial auto insurance policy?
As a business owner, you need the same kinds of insurance coverage's for the car you use in your business as you do for a car used for personal travel -- liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the "principal insured" rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.

Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business. 

While the major coverage's are the same, a business auto policy differs from a personal auto policy in many technical respects. Ask your insurance agent to explain all the differences and options. 

If you have a personal umbrella liability policy, there's generally an exclusion for business-related liability. Make sure you have sufficient auto liability coverage. 

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