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Frequently Asked Questions |
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Automobile Insurance FAQs
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Should I expect my premium to rise if I reported an accident to my insurance company in which I was not found at fault?
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It is unlikely you would see a premium increase solely because you were in an accident in which another person was at fault.
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Do red vehicles cost more to insure than other vehicles?
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No. Your insurance company does not consider the color of your vehicle when calculating your insurance premium. Factors that insurers consider include your age, the kind of vehicle you drive, your claims history, in some states your credit history and your driving record.
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Do I need to purchase insurance before I buy a new car?
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If this is your first car, yes, you'll have to buy auto insurance before you drive your shiny new car off the dealer's lot. If you are financing the purchase, the lender will require that you buy a policy with comprehensive and collision coverage. If you have owned a vehicle and already have an auto insurance policy, that will generally cover your new automobile for a period of at least 4 days after you buy it. Once that 4-day period is up, you'll have to talk with an agent or customer service representative to insure that new vehicle.
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What can I do to protect myself against uninsured drivers?
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Purchasing uninsured/underinsured motorist (UM/UIM) coverage can protect you against uninsured drivers. In many states, UM coverage is required by law.
UM coverage will pay for medical bills and pain and suffering if you are hit by an uninsured driver. In some states, UM property-damage coverage is available. If your car is crunched by an uninsured driver and you have UM property-damage coverage, you'll be able to get your car fixed under this coverage, rather than using your collision coverage.
Generally speaking, UM property-damage coverage carries a lower deductible than collision coverage.
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What should I do if I just had an auto accident?
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You should inform your insurance company right away. Make sure you've gotten a copy of the police report and the other party's (or parties') insurance information. If possible, take pictures of all vehicles involved in the accident, to prevent the other parties from claiming damage to a vehicle that was not related to the accident.
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Do I need insurance to rent a car?
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When renting a car, you need insurance. If you have adequate insurance on your own car, including collision and
comprehensive, this may be enough.
Before you rent a car:
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Contact us.
Find out how much coverage you have on your own car. In most cases, the
coverage and deductibles you have on your personal auto policy would apply to a
rental car, providing it's used for pleasure and not business. Domestic
automobile insurance covers you in the United States and Canada. If you don't
have comprehensive and collision coverage on your own car, you will not be
covered if your rental car is stolen or if it is damaged in an accident.
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Call your credit card company.
Find out what insurance your card provides. Levels of coverage vary.
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How do you reduce the cost of collision coverage?
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You can do one of two things: raise your deductible or drop your coverage. The deductible is what you pay out of your own pocket before your insurance policy kicks in. The higher the deductible, the lower your premium. For example, increasing your deductible from $200 to $500 on collision coverage could reduce your premium by as much as 30 percent, according to the Insurance Information Institute.
Collision coverage is generally not worth purchasing on older vehicles with high mileage because if you ever file a claim for significant damages, your insurance company will likely declare your vehicle a total loss rather than fix it. That's because the cost of fixing your vehicle far exceeds its market value. The value you get for the vehicle in the total loss may not justify the premiums you pay for the collision coverage.
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Business Insurance FAQs
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What percentage of the health insurance premium does an employer usually pay?
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According to a Kaiser Family Foundation survey, "Employer Health Benefits 2000," small employers (3 to 199 employees) typically pay 86 percent of premiums for single-employee coverage, and 66 percent of premiums for family coverage. Midsize firms (200 to 999 employees) pay 88 percent of single-employee premiums and 82 percent of family premiums, and large firms (1,000 to 4,999 workers) pay 89 percent of single employee premiums and 77 percent of family premiums.
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What is the typical waiting period before employees become eligible for a new employer's health plan?
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According to a survey by the Kaiser Family Foundation, "Employee Health Benefits 2000," the average wait for health coverage at small firms (between 3 and 199 workers) is 2.1 months. That's slightly longer than the average wait of 1.5 months across firms of all sizes.
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Health Insurance FAQs
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Are employers legally required to provide their workers with health insurance?
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No, there are no state or federal laws that require private U.S. employers to offer health insurance benefits to any employees at all. However, it is common practice, especially among larger employers, to offer health insurance benefits as a means to attract and retain workers.
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I run my own business and I'm worried what will happen to my family if I develop a serious illness or become disabled. How can I protect my family?
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You're right to be concerned. People in their prime working years are more likely to become disabled than to die. Depending on your personal circumstances, one good way to protect you, your family, and even your business, is to buy disability insurance.
In essence, disability insurance provides "backup" income if you are temporarily out of work. Most disability plans are pretty flexible, and you can buy coverage for a variety of illnesses or injuries, or exclude specific injuries, such as a bad back.
Disability coverage for self-employed individuals is based on your type of employment, and the costs will vary. In addition, the type of business you have may limit the benefits available or make coverage difficult to obtain in some cases.
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Homeowners Insurance FAQs
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What is the process that my insurance company follows when I file a claim?
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Here is a general idea of the claims process:
- Insured calls agent or claim service center to report initial claim.
- Claim received in local claim office from service center.
- The insured receives a call from the claim department to review loss facts
and claim-handling procedures.
- If an inspection is not needed, the adjuster requests information needed to
process the claim and issue a settlement check.
- If an inspection is needed, the claim is assigned to a field adjuster who
contacts the insured and sets an appointment.
- If a contractor is involved, the adjuster attempts to meet with the customer
and the contractor to reach an agreed scope and dollar amount of loss. An
estimate is prepared and a check is written for the damages.
- If a contractor is not involved, the adjuster prepares an estimate and
issues a check for the damages.
- If the insured obtains a contractor after the loss is settled, the insured
is instructed to have the contractor review the estimate and contact the
adjuster with any discrepancies.
- Every attempt is made to reach an agreed price with the contractor and
resolve any discrepancies. If additional money is owed, a supplemental estimate
is prepared and a check issued.
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We're going to be building a house. How do I insure it while it's under construction?
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Basically, you just need a standard homeowners policy. You should make sure to tell the insurance company or your agent that the house is currently under construction though.
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If a tree falls on my house from my neighbor's yard, who pays for the damage?
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Generally the insurance responsibility lies with whoever's property is damaged. In other words, if a tree falls on your home, no matter where the tree came from, your insurance company should pay for your home repair.
An exception would be if the damage occurred as a result of negligence; for instance, if the tree was dead before it fell, and you had proof that your neighbor knew the tree was dead. Under those circumstances, the damage becomes your neighbor's liability.
As a rule, state insurance officials suggest that you file a claim with your insurance company and let them deal with it.
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Do I need to buy flood insurance?
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If you want your belongings covered against damages caused by a flood, the answer is yes. Basic homeowners insurance policies do not cover damage from flooding. Because flood damage happens so infrequently, most insurance companies won't even consider writing flood coverage. The National Flood Insurance Program (NFIP) underwrites the overwhelming majority of flood policies in the United States. While most people should at least think about getting flood insurance, it is true that some people need it more than others.
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Will filing a claim on my homeowners insurance cause my rates to go up?
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No. In most cases, once an insurer reviews your loss history and finds none, one claim should not affect your rates. If the claim exposes some greater risk on your property, however, such as owning a trampoline or new swimming pool, then you may face a rate increase.
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Life Insurance FAQs
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How can I find out if my deceased relative had life insurance?
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Unfortunately, there's no clearinghouse of information on life insurance policies. Here are some suggestions:
Go through canceled checks or contact your deceased relative's bank for copies of old checks. If he or she wrote checks to pay premiums, the insurer's name should be listed on the checks.
Check old credit card statements. Your relative may have paid premiums by credit card.
Check probate court records for details of your relative's estate. If the estate has gone through or is in probate court, a life insurance policy could show up as an asset.
Contact any past employers to see if your relative had group life insurance.
Contact other family members (i.e., brothers, sisters, or children) who may have been privy to your relative's finances. Perhaps they will know if he or she had insurance and from whom it was purchased. Also ask your relative's lawyer, banker, or accountant.
Track down your relative's auto or home insurance agents. They may have sold him or her a life insurance policy or at least know from whom it may have been purchased. The agent can also query the home office of the company to determine if there is a policy on file for that client. Under the new HIPPA guidelines, there may be legal requirements before any information can be released, but you will know what the policy is there to make the request.
If your relative bought life insurance fairly recently, there might be a trail of the companies to which he/she applied. The Medical Information Bureau maintains a database that might show if insurers requested your relative's medical information within the past seven years. Record searches can be requested through the Disclosure Office of the MIB and cost $8.50.
Keep in mind that if no beneficiary comes forward to collect the death benefit, and your relative's insurance company cannot locate a beneficiary, the insurer has to hand over the death benefit to the state within a certain period of time (usually three years, although it varies by state). After the state receives the death benefit, a beneficiary still can come forward to collect the proceeds.
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Can I borrow money against my life insurance policy?
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If you own a cash value life insurance policy, you can take out a loan against the cash value you have built up in the policy. Of course, you will have to pay back the loan with interest. If you die before you pay back the loan, the balance that you owe and any interest will be deducted from the death benefit.
If you own a term life insurance policy, you cannot take out a loan against it because in most cases you do not build up any cash value in a term policy.
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If I'm a beneficiary, do I have to pay income taxes on a death benefit?
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No. Death benefits from life insurance policies are free from income tax. However, the death benefit may be subject to estate and inheritance tax. Check with the agent who sold the policy, the insurance company, or your own financial planner for details.
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