Homeowners Insurance FAQ's

Automobile Insurance FAQ's

Q: I'm in the process of purchasing an automobile, what should I keep in mind when securing an auto insurance policy?

A: There are several factors you should keep in mind when purchasing an automobile insurance policy. First, you need to decide how much liability coverage you want to carry. This amount differs from person to person, and the state you reside in will require you to carry at least a designated minimal amount. Feel free to talk to your agent if you need assistance in determining what coverage amount would best suit you. Next, you need to determine what optional coverages you want included in your policy. For instance, do you want to carry physical damage coverage for you vehicle (collision and comprehensive coverage) or is the market value of your vehicle too low to warrant this coverage. Do you want to carry uninsured/underinsured motorists coverage (highly recommended)? Do you want to carry medical expense coverage? Would you like towing and labor coverage or rental reimbursement coverage? There is also an additional coverage called lease/loan gap coverage. Once you have decided what coverages you want included in your policy you need to opt for either using an insurance agent to assist you or going directly through an insurance company that sells policies over the phone or through the mail. Back to Top

Q: What factors can affect the premium of my automobile insurance policy?

A: There are several aspects that can affect the premium of an automobile insurance policy - some that are within your control and some that are beyond your control.

The number of years driving experience you have, your driving record (moving violations, accidents, DUIs, suspensions, etc.), the type of vehicle you drive, where the vehicle is garaged, the purpose the vehicle serves, and how many miles annually you put on the vehicle can all affect how much auto insurance premium you may have to pay.

Further considerations to take into account that can affect the cost of your auto insurance policy can be your marital status (discounts for married individuals), if you are in school full-time and if you maintain a 3.0 or better GPA (differs from company to company), if you belong to any of the group discounts offered (differs from company to company but includes such occupations as teachers, scientists, engineers, etc.), and if you have any other policies with the company. Back to Top

Q: What are some practical things I can do to lower the premium of my auto insurance?

A: First and foremost you want to make sure that you shop your insurance around with different insurance carriers. Insurance quotes from a variety of insurance carriers for identical coverages can vary in price drastically. Make sure if you have your insurance through an agent that they have you placed with their most competitive insurance carrier. Reviewing the insurance carrier's policy of discounts is very important so you can be sure that you are receiving all the proper discounts that you qualify for. Attaching discounts to the policy can always decrease the premium. Lastly, if you carry physical damage coverage (comprehensive and collision coverage) on your policy, increasing the deductible you maintain for your vehicle(s) will also decrease your premium. Generally, the more risk you assume, the less risk you assign to the insurance company, which is charging according to how much risk it is insuring against. A deductible is the initial out of pocket expense that you, the insured, assume before the insurance company will pay out for a loss. Therefore, the higher the deductible you choose the less risk the insurance company has, which lowers the premium. Back to Top

Q: My state requires that I carry a minimum of 15/30/5 for insurance coverages, what does this mean?

A: A minimum liability limit of 15/30/5 refers to $15,000 bodily injury liability per person, $30,000 per accident, and $5,000 property damage. Insurance requirements vary from state to state. Back to Top

Q: If the state I live in has minimum requirements, why would I want to purchase more insurance then what the state law requires?

A: If you are found to be liable for an amount greater then the coverage limits of your policy, you must pay the difference out of pocket. If you don't have enough money then the other party can go after your home, financial assets, and even have your future wages garnished. It is important when purchasing an auto insurance policy to make sure you purchase enough coverage to cover your assets. The last thing you want to have to do is liquidate all your assets to pay the other party when all you needed to do was purchase higher liability limits on your auto insurance policy. Back to Top

Q: What are the coverages included in a standard personal auto insurance policy?

A: The following is a list of the basic coverages and some additional coverages offered in the standard auto insurance policy:

Bodily Injury Liability - Coverage that pays for medical expenses, legal expenses, and judgments against you when you or your vehicle is involved in an accident that causes the injury or death of another individual.

Property Damage Liability - Coverage that pays for damages to the property of others caused by you or your vehicle.

Underinsured/Uninsured Motorists - Coverage that pays for the costs associated with damage or injury caused to you by an underinsured, uninsured, or hit-and-run driver.

Uninsured Motorists Property Damage/Collision Deductible Waiver - You would need to have uninsured/underinsured motorists coverage for one of these coverages to apply. Only one of these coverages applies - if you have physical damage coverage then you would have the collision deductible waiver, and if you do not have physical damage coverage then you would have the uninsured motorists property damage coverage. If you get into an accident with another individual that does not have insurance and they are at fault and you have physical damage coverage on your vehicle then the insurance company will waive the collision deductible. If, however, you don't have physical damage coverage on your vehicle then there is a stipulated maximum amount of coverage (usually around $3,500, but differs from company to company) that the insurance company will pay you with the uninsured motorists property damage coverage.

Medical Payments - Covers the initial medical bills of you and your passengers after an auto accident, regardless of who is at fault.

Collision - Covers the damage to your vehicle resulting from a collision, regardless of who is responsible. With collision coverage there is usually a deductible to be paid by the insured based on what amount they chose when they purchased the policy. A Collision Deductible Waiver can also be purchased to waive the collision deductible for no fault accidents involving an uninsured party.

Comprehensive - Covers the damage to your vehicle that does not result from a collision such as theft, vandalism, fire, hail, natural disasters, hitting an animal, etc. Keep in mind that some companies vary on their classification of an accident involving a natural disaster or hitting an animal as to whether it is collision or comprehensive.  With comprehensive coverage there is usually a deductible to be paid by the insured based on what amount they chose when they purchased the policy. Back to Top

Q: What is the difference between comprehensive physical damage coverage and collision physical damage coverage?

A: Both comprehensive and collision coverages relate specifically to the vehicle being physical damaged rather than the liability portion of the policy. Comprehensive and collision coverages are not necessarily required on an auto policy and are considered optional when purchasing a policy. The only time comprehensive and collision coverages may be required is if you are financing or leasing a vehicle and the lien holder or additional insured requires such coverages. Collision is defined as losses you incur when your vehicle collides with another vehicle or object. For instance, if you are involved in an accident and your vehicle collides with another vehicle, damages to your vehicle will be paid under the collision coverage. Comprehensive covers all other direct physical damage other than collision such as fire, theft, vandalism, etc. Make sure you understand the difference between the two coverages when you are purchasing an auto insurance policy so you can obtain the proper and appropriate deductibles, which can and are often different from one another. Back to Top

Q: What is the difference between cancellation and non-renewal of an auto insurance policy?

A: When your policy is non-renewed it means that the insurance company does not want to offer you another policy at the end of your current policy period. It is possible that the company is not offering you continued coverage because you don't meet their underwriting criteria any longer - maybe you lost your driving privileges, maybe you have received too many traffic violations, or maybe you have been involved in too many accidents within the last three to five years. Should this happen to you it is quite possible that you will be able to secure coverage with a different insurance carrier; however, the new carrier will probably charge you a higher premium due to the fact that you are a higher risk. Back to Top

The cancellation of a policy can occur at the request of the insured or the insurance company. An insurance company can cancel your policy for a number of reasons such as non-payment of premium or maybe you have misrepresented the necessary information to underwrite the policy. An insured can request their policy to be cancelled if they no longer need the policy or are changing carriers. Remember, many applications ask if you have ever been cancelled, declined, or refused similar coverage for any reason. Answering yes to this question could limit the available options of insurance carriers you have to choose from. Back to Top

Q: I was just involved in an accident, what should I do?

A: Your responsibilities and duties after you have an accident are stipulated both by state law and your insurance contract. Be sure you check with both. First and foremost you want to make sure that you and everyone else in your vehicle and the other vehicle are all right and call an ambulance if necessary. Second, be sure to call the police. Now, whether they come or not may differ from city to city depending on their procedures. Third, you want to exchange the necessary information with the other parties involved in the accident such as name, address, telephone number, insurance carriers, policy number, persons involved, and vehicle information. After you have done this you'll want to contact your insurance agent or insurance company as soon as possible to report the accident. Once your insurance company has been notified you will be contacted by a claims adjuster to acquire a statement from you concerning the details of the accident, and they will also begin to provide you with advise and the necessary procedures for getting your vehicle repaired. Back to Top

Q: What does it mean when a car is totaled?

A: After an accident or theft recovery, if the insurance company decides your car is totaled, it means the cost to repair your vehicle exceeds the value of the vehicle. Back to Top

Q: What happens if my car is stolen?

A: If your vehicle has been stolen, be prepared to go through a waiting period. Most insurance companies require that there be a waiting period to see if the police can recover the vehicle, which could be as long as 30 days (Huntington Beach has better than a 95% recovery rate). If your vehicle has not been recovered after the waiting period then the insurance company will settle with you on the actual cash value of the vehicle. If, however, the vehicle is recovered, the insurance company will want to see some repair estimates before proceeding. Back to Top

Q: I currently have an auto insurance policy, will that policy cover me if I drive my car into Mexico?

A: There are several important factors to keep in mind when leaving the United States and driving your vehicle into Mexico. Mexico does not recognize insurance from the United States. So, when driving into Mexico you want to make sure you have either already purchased Mexican insurance, or stop at the border and purchase insurance to cover you while you are there. If you are stopped by the Mexican police and do not have Mexican insurance, you are at their mercy and will be subjected to their laws and regulations. Keep in mind that your United States insurance policy will cover your vehicle if you have physical damage coverage on your vehicle if an incident occurs while you are in Mexico (but usually only a stipulated distance over the United States/Mexican border - ie. 50 miles); however, you would need to get your vehicle over the border and back into the United States before they can process any restitution to you. Back to Top

Q: If I lend my vehicle to a friend, are they covered under my auto insurance policy?

A: As long as you give permission to another individual to drive your vehicle and they are not already specifically excluded then it is covered under your policy. Keep in mind that they must have a valid driver's license and not be under any restrictions to drive a vehicle. Your insurance policy is primary and their insurance would be secondary, if any additional coverage were needed. Also, each company differs from the next on the amount of coverage they would provide for the driver. Your policy covers you and your vehicle to the policy limits; however, it depends on the rules and regulations of the company you are with as to whether they cover the driver of your vehicle to your policy limits or to the state minimum limit requirements. Be sure to check with your company as to their rules for permissive drivers not listed as a driver on your policy.Back to Top

Homeowners Insurance FAQ's

Q: What are the benefits of using an independent agent to purchase insurance?

A: An independent insurance agent represents a variety of insurance companies to guarantee that you are getting the most competitive rate for the best coverage based on the markets we represent. Having the ability to place your insurance needs with a wide range of available markets certifies that there is a market that meets your individual and unique needs. By using an independent agent to purchase your insurance, you can be sure that you are receiving more personal service and attention rather than dealing directly with the insurance company employees. Back to Top

Q: I'm in the process of purchasing a home, what should I keep in mind while I'm purchasing a homeowners policy?

A: There are a number of aspects you should consider when purchasing an insurance policy. With any purchase you should always be informed of your options and make sure you are fully aware of what it is you are actually buying. Here are just a couple of things you should keep in mind when you purchase homeowners insurance:

-Determine the type and amount of insurance that you need. It is very important that the coverage limit (dwelling coverage amount - Coverage A limit) of your home should equal 100% of its replacement cost. If you contact your local insurance agent they should be able to help you determine an approximate replacement value of the home (Keep in mind that you don't insure a home based on what the loan amount or market value is rather what the replacement cost of the home is since the loan amount and market value takes factors such as land and location into account.) If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company may be less than the full cost to replace your home - you'll have to pay the rest out of pocket. Also, you'll need to decide if the personal property and personal liability limits are adequate for your needs.

-Determine which, if any, additional endorsements you want to add to your policy. For example, it's a good idea to add such endorsements as personal property replacement cost, dwelling replacement cost, personal injury for liability protection, and if you have specific items of value such as jewelry or fine art you would want to specifically schedule those items.

-Once you have decided on the coverages you want in your homeowners insurance policy, be sure to consult us. We will be able to help you determine if there are any gaps in coverage that you might not be aware of, explain the details of the policy including the limitations and exclusions, as well as, recommend any additional coverages that you might need. It is important to remember that the responsibility of determining what coverages are needed or necessary and to what limit rest with the insured, but the agent is there to help assist you and explain things in further detail so that you, the insured, can make a sound and logical decision. Back to Top

Q: Why would I need to purchase homeowners insurance?

A: A home can require a remarkable amount of investment of time, money, and energy. In many circumstances the purchase of a home is one of the biggest acquisitions that an individual can make, and it is extremely important to protect that asset. The concept and reality of homeowners insurance is constructed to protect that investment by insuring the structure and personal possessions in and around them. In addition the homeowners policy is providing you with liability protection for the residents of the home in the event that a suit arises. In the event of destruction or damage to your home or personal possessions homeowners insurance is there to protect you and your family from an enormous loss. Keep in mind that homeowners insurance should be thought of as protection against substantial damage or loss and not for the incidental losses or damages that may occur. Don't think of insurance just as a tool to satisfy a lender, but a way to protect your own assets. Back to Top

Q: What are the policy limits (coverage limits) in the standard homeowners policy?

A: [Note: this answer is based on the ISO's HO-3 standard homeowners policy.]

The dwelling (Cov. A) and other structures (Cov. B) [detached structures such as a detached garage, pool, shed, etc.] on the premises are protected on an "all risks" basis up to the policy limits. The policyholder determines the policy limit for the dwelling at the time the insurance is purchased. The policy limit for the other structure coverage is usually equal to 10% of the dwelling coverage amount (may differ from company to company).

Next there is coverage for your personal property (Cov. C) on a "named perils" basis. The policy limit for personal property coverage is usually 50% of the dwelling coverage amount (may differ from company to company). There is also additional living expenses coverage (Cov. D) that the policyholder may incur when the residence cannot be lived in because of a covered loss that is usually equal to 20% of the dwelling coverage amount (may differ from company to company).

There is also coverage for personal liability (Cov. E), which is also determined by the policyholder at the time the insurance is purchased. Medical payments to others (Cov. F) is the last of the main coverages, which is usually set at $1,000 per injured person; however, this can be adjusted at the request of the policyholder at the time the insurance policy is purchased. Medical payments to others can only be paid to those that are not considered "residents" of the household.

It is important to know that these are all the basic coverages of a standard homeowners policy; however, there are many additional coverages that can and are provided for that does vary from company to company and can be requested by the policyholder. It is vital that you inquire with your insurance agent as to any optional coverages that you may need when you are purchasing a homeowners insurance policy.

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Q: What is a deductible?

A: Deductibles place the responsibility for the initial cost of certain claims - and some of the risk - back on the insured. Basically, a deductible is the amount the policyholder must pay out of pocket before the insurance company will step in and pay for the loss of your property. The deductible you choose for your policy has a direct impact on the amount of premium you will pay for a policy; the higher the deductible the lower the premium and vice versa. Back to Top

Q: When and where is my personal property covered?

A: Personal property (except property that is specifically excluded) is covered up to the policy limit when it is located at the residence described on your policy; however, you normally have 10% coverage of your total personal property away from home worldwide (this may differ from company to company). If you have personal property, however, that is far more valuable than the normal coverage limits of the homeowners policy you can purchase additional coverage through an endorsement to your current homeowners policy or a separate policy all together to extend the limits of coverage which specifically schedules the possessions of high value. Items that are specifically scheduled such as jewelry, fine arts, etc. have broader coverages that exist and you would want to check with your insurance company for the exact coverages. Normally, the piece of personal property that is specifically scheduled is covered to the full amount of value and is covered worldwide. Back to Top

Q: What kind of damage does a basic homeowners policy cover and what is not covered?

A: 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 the building
-Volcanic eruption

You can also increase the coverage to include:
-Falling objects
-Weights of snow, ice, and sleet
-Three kinds of water-related damage from home utilities or appliances
-Electrical surge damage

Coverage that is not afforded for in a standard homeowners policy can vary from company to company. However, unless you purchase additional coverage, damage caused by floods, earthquakes, nuclear accidents, wars, intentional damage, and normal wear and tear is not covered. There are other exclusions that may also apply. Back to Top

Q: What is the difference between "actual cash value" and "replacement cost"?

A: Covered losses under a homeowners policy can be paid on either an actual cash value basis or a replacement cost basis. When "actual cash value" is used the policyholder is entitled to the depreciation value of the damaged property. Under the "replacement cost" coverage, the policyholder is reimbursed an amount necessary to replace the damaged property with one of similar type and quality at the current price without taking depreciation into account. The item must be replaced in order to receive the reimbursement on a replacement cost basis. If you were to decide to take the money rather than replacing the item, you would only be reimbursed on an actual cash value basis. Back to Top

Q: What is the difference between an "all risks" policy and a "named perils" policy?

A: An "all risks" policy covers losses that are caused by any peril except those that are specifically excluded in the policy. A "named perils" policy covers losses that are caused by only those perils listed on the policy. Keep in mind that an all risks policy provides broader coverage than a named perils policy.

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Q: What if I'm found liable for injuring another person?

A: Assuming that the injury caused was due to your negligence and was not intentional, your homeowners policy would provide coverage for any medical bills and legal expenses, up to the policy limits, found under the personal liability coverage (Cov. E). It is very important to make sure your policy includes personal injury, which is not necessarily included in the policy from company to company. Back to Top

Q: In the event of a loss how will I be able to recall the contents of my home if it is destroyed?

A: In the event of a loss if your home were involved in a fire that nearly destroyed the entire home it may be very difficult to remember all of your possessions. Not only is it difficult and emotional enough going through such a catastrophic loss the last thing one can be expected to do is recall all of their possessions. It is very wise to generate a detailed list of all your possessions. It is recommended to go throughout the home with a video or photographic camera detailing and documenting all of your possessions. Once you have compiled a list it is recommended to keep it off site in a safety deposit box or in a lock box. Not only does a detailed list of your possessions help you to recall all that you have, but it will also help, at the time of a loss, provide proof that you actually had possession of the items in case the items are recovered from a thief. Also, while receipts are not necessary, they are always helpful to show proof of ownership.

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Q: I feel that I'm paying too high a premium for my homeowners insurance, what can I do to lower the cost?

A: There are several things you can do to lower the cost of your homeowners insurance. The first thing you'd want to do is shop your insurance around with a number of different insurance carriers. If you have your insurance with an agent that represents several different carriers you'd want to check with your agent to make sure they have you placed with the most competitive carrier they represent. It is not surprising to find quotes from different carriers that vary in price several hundreds of dollars for the same coverages. You do want to make sure when you're shopping your insurance around that each company is quoting you with the same exact coverages.

Another way to lower your premium for you homeowners insurance is to make sure you are receiving all the necessary discounts that apply. Many insurance companies offer discounts for deadbolt locks on exterior doors and windows, fire extinguishers, smoke alarms, and sprinkler and security systems. You can also receive a discount if you have your auto and homeowners insurance policies with the same carrier (multi-policy discount). Depending on where you live insurance carriers also offer discounts for living in a gated community or if you have a security attendant at the perimeter of the housing community.

Lastly, another way to lower your homeowners insurance premium is to increase your deductible. Increasing your deductible can sometimes impact the decrease in premium substantially. However, keep in mind that raising the deductible increases the amount of out of pocket expense you'll have at the time of a loss, so you'll want to make sure you have the necessary financial resources to handle the increased deductible. Back to Top

Q: If an accident occurs that I think is covered under my homeowners policy, what should I do?

A: The first thing to consider and understand is that if you call your agent regarding a loss that you may have just encountered, your agent is required by law to file a claim with the insurance company. Many times an insured is just calling their agent to get information or advice and later on down the road finds out that there was a claim filed whether the insured wanted to file a claim or not. It is very important to choose your words carefully when inquiring about information regarding a claim or actually filing a claim when speaking with your insurance agent. Insurance contracts are conditional contracts, which means that policyholders have certain duties that they must perform if a covered loss should occur. Failure to complete these duties, can and sometimes does, result in non-payment by the insurance company for losses that otherwise would have been covered. First, it is very important to notify the insurance company or agent that a loss has occurred as soon as you discover what has transpired. Second, you need to protect the property from further damage and/or take any necessary precautions from preventing further damage to occur. Next, you'll want to make a detailed list of what was damaged along with taking any pictures of the damage done. Pictures aren't necessarily required, but I can assure you that it will help out the process that much more when you speak with a claims adjuster. Lastly, you'll need to complete a statement for the insurance company that details the events that led up to the loss and then what actually took place causing the loss. Be prepared to show any necessary documentation and that actual damaged property to the claims adjuster when called upon to do so. It is also extremely important to keep all proper documentation showing that repairs were made and completed properly for future reference or should you decide to change insurance carriers in the future. Back to Top

Q: I don't own a house, but I rent an apartment instead, would a homeowners policy give me the protection that I need?

A: If you rent a house or apartment, the building owner is responsible for any perils that befall the property. It is the responsibility of the building owner to have insurance on the structure that would protect and compensate him if something were to happen to the structure. However, his policy does not protect you for your personal belongings. In order to receive the necessary protection for your possessions - electronics, furniture, clothing, etc. - you would need to purchase a renters insurance policy, which is a type of homeowners policy for the non-homeowner. A renters insurance policy has many of the same provisions that a homeowners policy has with the exception of coverage for the structure. It protects your personal property (Cov. C), and it protects you against claims of liability if you cause injury to someone or an individual's property. A renters insurance policy is also referred to as an HO-4 policy. Back to Top

Q: I have just purchased a condominium. Will a homeowner's insurance policy cover me in the proper way?

A: Insurance for a condominium is different from insurance for a home because of the way ownership is structured. A homeowners insurance policy covers you against losses, and you can only suffer a loss if you have ownership. Due to the fact that there are areas of common ownership in a condominium complex, your homeowner's association may have a master policy. The extent of coverage that you will need to purchase depends on what the master policy covers. It is extremely important to check with your homeowner's association to see what kind of policy they have so you know exactly what they do and do not cover as far as the structure is concerned. Condominium associations usually have one of three different types of master policies.

One is called an "all risk" policy, which is the broadest form of policies offered that basically covers anything that is "attached" to the dwelling; there is also an "original" policy that basically covers anything originally built as part of the dwelling, but not any improvements made by the owner to the unit. Lastly and most commonly is the "bare walls" policy that only covers to the inside layer of paint, placing most of the responsibility of replacing such things as fixtures, cabinets, carpets, etc. on the owner.

The standard condominium policy is called an HO-6 policy. It will provide coverage for your personal property and protect you and your family against some types of liability. The condominium policy can also have coverage for those things that the association master policy does not cover. You can get coverage for improvements and betterments as well as any other structural coverage that you would be responsible for such as cabinets, countertops, fixtures, carpets, etc. that the master policy wouldn't cover against. Be sure to talk to your agent about any other necessary coverages such as loss assessment that you may need attached to the policy. Back to Top