What are the different types of auto coverage?
Liability Insurance: This coverage protects the owner against losses from legal liability arising from bodily injury or property damage caused by an automobile accident. The coverage can be a single limit, ($100,000 for each accident), or split limits such as $50,000/$100,000/$25,000 (per person/per accident for bodily injury/property damage).
Medical Payments Coverage: This provision pays medical or funeral expenses because of bodily injury. The coverage is generally in increments of $1,000 to $5,000 up to $10,000 per person per accident.
Physical Damage Coverage: This section of the auto policy is designed to cover physical damage to the insured auto. Collision covers, as the name implies, collision losses. Comprehensive (also known as “other than collision”) covers losses from non-collision incidents, such as theft, fire or storm damage. Losses for physical damage are generally based on the cost to repair or replace the damaged or stolen vehicle.
Uninsured/Underinsured Motorist: Even though many states have enacted “financial responsibility” laws, not all automobile owners comply. Uninsured motorist coverage pays for injuries sustained in an accident with an uninsured (or a hit-and-run driver). Underinsured motorist insurance covers the difference between actual losses sustained, and what an insured can collect from an at-fault driver, up to policy limits.
Personal Injury Protection (PIP): PIP provides coverage for bodily injury sustained by the insured or any family member. Coverage has a $10,000 limit and is mandatory in the state of Florida – additional limits are available.
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What’s that collision damage waiver that car rental companies want you to buy? Do I need really need it when I rent a car?
The collision damage waiver, which is a type of insurance that the rental car company tries to sell, releases you from financial responsibility should you damage their vehicle while renting it. If you have already have insurance on your own car (including collision and comprehensive coverage), and rent a car for pleasure only (e.g., when on vacation), you don’t need to buy the collision damage waiver from the rental company.
Renting a car for business purposes, however, is usually a bit different, and you should check with your insurance agent first.
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Does my auto insurance cover other people who drive my car?
Yes. Liability, collision, and comprehensive insurance follow your car. In addition, if the person who borrows your car is insured, his or her policy also will be available to cover the cost of damages and injuries should there be an accident. Keep in mind that when you borrow someone else’s car your liability coverage follows you but your comprehensive and collision do not.
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On my insurance policy, what do those three numbers divided by slashes mean?
Each of these numbers means thousands of dollars in liability coverage. For example, the numbers 100/300/100 actually mean $100,000/$300,000/$100,000.
The first number is for bodily injury coverage per person; the second number is for bodily injury coverage per accident; and the third number is for property damage coverage per accident. Thus, in the above example, your coverage:
$100,000 in bodily injury coverage per person.
$300,000 in bodily injury coverage per accident.
$100,000 in property damage coverage per accident.
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Why do insurance companies use Insurance Bureau Scores?
Insurance companies use scores to help them issue new and renewal insurance policies. Insurance Bureau Scores provide an objective, accurate and consistent tool that insurers use with other applicant information to better anticipate claims, while streamlining the decision process so they can issue policies more efficiently. By better anticipating claims, insurers can better control risk, enabling them to offer insurance coverage to more consumers at a fairer cost.
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How can I improve my score?
An Insurance Bureau Score is a snapshot of your insurance risk picture based on information in your credit report that reflects your credit payment patterns over time, with more emphasis on recent information. To improve a score, you should:
Pay bills on time. Delinquent payments and collections can have a major negative impact on a score.
Keep balances low on unsecured revolving debt like credit cards. High outstanding debt can affect a score.
Apply for and open new credit accounts only as needed.
You can increase your score over time by using credit responsibly. It’s also a good idea to periodically obtain a copy of your credit reports from three major credit bureaus to check for any inaccuracies.
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How can I keep the cost of my auto insurance as low as possible?
As with most everything else, you can shop around to find low cost auto insurance. But finding low cost auto insurance is no guarantee that you are getting the coverage you really need. There are many factors that go into determining the right coverage – and price – for your individual situation. While it can pay to shop around on your own, your shopping should also include the input and advice of an insurance agent.
In addition, there are a number of things that you can do that will enable you to get the right coverage at a lower cost. They are:
Maintain a good driving record. As pointed out earlier, maintaining a good driving record signifies that you are less of a risk than those who have a poor driving record. Your driving record is a significant factor. Simple infractions, such as a speeding ticket, can raise your rates for several years.
Take the highest deductible you can afford on collision and comprehensive coverage. The deductible is the amount of out-of-pocket expense you must pay before your insurance kicks in. For some people, the difference between $250 and $500 (common deductible amounts) is relatively insignificant, so by taking the higher deductible, premiums are lower.
Check for discounts. Many insurance companies offer discounts for such things as air bags, anti-lock brakes, alarm systems, multiple vehicles, auto and home insurance from the same company, etc. An independent agent makes it his or her business to know the ions available from a variety of companies.
Pay your premiums on time. If your auto insurance is cancelled because you failed to pay your premiums, it could be difficult finding another company to insure you. Nonpayment of premiums is regarded as a failure to assume financial responsibility, which would make you a poor risk. Remember, if you can afford to own a car, you must insure it.
Consider dropping some coverage on older cars. If your car is older and relatively low in value, you might want to drop collision and comprehensive insurance. But before doing so, get the advice of an insurance agent to see if that’s a wise choice.
Periodically review your coverage. Situations and circumstances sometimes change and may require adjustments to your insurance coverage. There’s nothing to be gained by paying more than necessary.
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What if I don’t own a home, but own a townhouse or condo?
People who own townhouses and condos also need similar protection for built ins (Additions and Alterations), contents of their home and for liability.
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What if I rent an apartment? Do I need insurance?
While you may not be required to have renter’s insurance, it’s a good idea to have it. Your personal property includes things of value and importance whether you live in an apartment, condo, townhouse, or single family home. Renter’s insurance protects the physical contents inside your apartment against loss or damage and provides liability coverage. Be sure to check your rental agreement for insurance provisions. If you have any questions, please call our knowledgeable team.
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I’ve heard that other coverage, besides property and liability, might be needed. How do I know?
Your homeowners insurance may not cover all your needs, especially if certain circumstances apply to your property and situation. For example, many homeowners policies do not include protection for damages from floods, earthquakes, or hurricanes. In fact, certain situations do affect Florida homeowners that they need to be aware of. Actually, you can buy coverage for a variety of special circumstances and contingencies. These additions to a standard homeowners policy are called riders or endorsements. Also, if you own jewelry, antiques, computer equipment, and other high-value possessions, you may need special coverage under what is called an “inland marine” policy. If you think you may need special coverage, please contact a Evergreen insurance professional.
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I operate my business from my home. Will my homeowners insurance cover my business needs?
A study conducted by the Independent Insurance Agents of America found that a high percentage of home-based business owner’s were underinsured, but believed that their homeowners insurance was sufficient. Typical homeowner’s insurance policies contain limits and exclusions that may preclude coverage of business property. Depending on the kind of business you operate, the materials and equipment used on your property, and other factors, your homeowners insurance simply may not cover your needs. If you operate a business from your home, you should consult with your insurance agent, who can help determine what kind of coverage is best for your situation.
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What should I do if I need to make immediate repairs— before the insurance company looks at my damage?
Typically, you are allowed to make immediate and temporary repairs to prevent further damage or loss. Of course, you should notify your agent or company as soon as possible. If you need to make immediate repairs, you should document your efforts, take photos, and save all receipts. Most importantly, do not enter into any agreements with repairmen, contractors, attorneys, and the like, unless you have first spoken with your insurance agent and have their authorization. Proper claims handling is essential for getting the benefits you’re entitled to.
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What should I do if someone gets hurt on my property?
First, seek professional medical assistance, if needed. Next, notify your insurance agent as soon as possible. Above all, however, do not discuss insurance-related matters with the injured party, lest you inadvertently waive some of your rights. Leave all insurance matters to your insurance agent.
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Does homeowners insurance have a deductible?
Yes, like most other types of insurance, homeowners insurance has a property and windstorm/hurricane deductible.
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How much life insurance should I buy?
That depends on a number of factors. Certainly, the amount of income you provide for your family is a major consideration. Some suggest that the amount of life insurance needed is equal to ten times your annual income. Another obvious consideration is the amount of financial liability or debt your family will be responsible for should you die prematurely or unexpectedly. Many people consider their children’s education when deciding how much life insurance to buy. Then, too, you may wish to leave money to family members or organizations. Potential inflation, estate taxes, and other financial considerations are also factors. Please try out the life insurance calculator on our website.
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What are the different types of life insurance?
There are two basic kinds of life insurance — term and cash value life.
Term life insurance covers you for a specified number of years, and pays out a death benefit only if you die within the specified term. This kind of insurance usually offers the highest degree of protection per dollar and is comparatively lower in cost, but does not build up cash value.
Cash value life insurance costs more than term life, but the part of the premium that is over and above the actual cost of insurance is invested by the insurance company; and, over time, builds up cash value. This kind of insurance is, in effect, a type of savings plan.
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I’ve also heard something about whole life, universal life, and variable life. What are they?
There are three general kinds of cash value life insurance — whole life, universal life, and variable life. The essential element of these policies is that cash value is built up over a period of time. Depending on the policy’s structure, you can even borrow money from your policy.
Whole life covers you for as long as you live. Generally, whole life policies are paid with premiums that stay the same throughout the length of the payment period.
Universal life typically offers a greater degree of flexibility, allowing you to vary your premiums and adjust the face amount throughout the length of the policy. Premiums paid (minus policy expenses) are put into a policy account that earns interest.
Variable life is funded by other kinds of investments, such as mutual funds and other investment vehicles. Thus, the amount of the death benefit paid and the amount of cash value accumulated depends on how well the investments performed over the life of the policy.
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With different kinds of life insurance, which one is right for me?
Which type of insurance is right for you depends on a number of factors including: your budget and ability to pay; your overall financial and insurance objectives; and your age, health, and family situation, to name a few. Depending on certain circumstances (e.g., health risk factors), however, you may be excluded from buying certain types of insurance or be forced to pay higher than normal premiums.
Your decision to buy life insurance should begin with a review of your needs and circumstances, what you can afford to pay, and for how long. You should also consider whether you only want simple coverage or have longer-term financial goals in mind. Because there are so many factors to consider, seeking the advice of an insurance professional could prove quite helpful.
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What else should I be aware of when considering life insurance?
There are a number of things that you should be aware of. Right now, many companies are competing in the low-cost term life insurance market, and good rates are available. In some cases, you can even purchase such insurance over the Internet with a credit card, but exercise caution. Be aware that Internet offerings sometimes gloss over important details that aren’t made available until you are contacted by a follow-up telephone call.
When purchasing life insurance, plan to keep your coverage for an extended period of time. Quitting your policy in the early years can be costly. Also, if you want to change life insurance coverage, don’t drop your present coverage until your new policy is in effect.
Remember that life insurance is often tied to your personal financial situation. Since things change over time, it may be helpful to devise a flexible strategy and make adjustments as needed. Our Evergreen insurance professionals can offer advice and suggestions for developing a good life insurance plan.
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What are the different kinds of health insurance?
In general, health insurance is divided into the two broad categories — traditional and managed care.
Traditional health insurance usually involves what are called “fee-for-service plans” — you pay a certain amount of your medical expenses (your deductible) when you require medical attention. Once your deductible is met, your health insurance pays the remainder (typically the majority) of the bill. Fee-for-service plans generally offer a higher degree of flexibility than managed care plans, but have higher premiums, higher out-of-pocket expenses, and more paperwork.
Managed care health insurance is what is making most of the insurance industry headlines lately. With managed care, an arrangement between the insurance company and a pre-selected network of health care providers guides the medical treatment you are entitled to receive under the terms of your health insurance policy. Generally, managed care plans cost less than traditional plans, but impose certain limitations and are less flexible.
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Aren’t there different kinds of managed care programs?
Yes, there are three types of managed care programs — Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service (POS) plans.
HMOs are the least expensive, but also the least flexible of the managed care health plans. HMOs may be comprised of a series of medical clinics (e.g., Kaiser Permanente) or consist of a network of individual medical practices and hospitals (e.g., Centura Health, Health South, HealthOne, Exempla, etc.). HMOs offer little or no co-pays and minimal paperwork, but require patients to receive medical services and treatment from health care providers within their network after getting a referral from a Primary Care Physician (the doctor the patient chooses).
PPOs are similar to HMOs, but offer more choices and flexibility. Patients pay small co-pays ($10-$15) every time they see a health care provider. When patients receive medical services outside their prescribed network, they usually pay about 20% of the costs out-of-pocket and the health insurance coverage pays the remainder. Plans vary and sometimes deductibles are required.
POS medical care and costs under this plan varies according to where you receive the service.
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What’s the difference between group and individual health insurance coverage?
The essential difference between group and individual health insurance plans is whether or not the plan is connected with an employer or organization.
Group plans insure the members of the group without regard to the health status of any of its members. Group plans typically cost less and offer broad coverage. People who receive health insurance as part of their employee benefits are covered by group plans. Self-employed people and other individuals who qualify for membership benefits in a particular organization or association may also be able to get health insurance under a group plan.
Individual plans, by comparison, take into account the individual’s health status. Individual plans are medically underwritten, which means that an individual’s medical records and history are evaluated for certain risk factors. Depending on the findings of the evaluation, coverage may be denied or certain exclusions can be attached to the individual policy. Individual health insurance typically costs more than group insurance, and in some cases (major health risk factors) may be extremely costly, if available at all.
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What happens to my health insurance when I leave my job?
Assuming your employer offered health insurance as an employee benefit, you can, at your ion, continue to receive health insurance under a program called COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985). This ional plan will allow you to continue your health insurance for up to 18 months, or longer, depending on your qualifying event, at your expense. You have up to 60 days from the time you leave your job to decide, and during that period it may be wise to shop around for alternative coverage. Of course, if you find another job (within 60 days) where you will again receive health insurance as part of your employee benefits, COBRA will be unnecessary.
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What can I do if my employer doesn’t offer health insurance benefits?
More and more employers are finding themselves in a position of being unable to offer health insurance benefits. In fact, the situation is becoming a nationwide issue. In addition to the individual ion (which may not be attractive), you can try to find a group policy through some other means. If group health insurance benefits are available, you may wish to join a professional organization or trade association that offers them.
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What should I think about when shopping for health insurance?
Your first thoughts should focus on your needs. If you are a healthy, younger single person, your needs may be relatively small compared to an older person with a family. For women of childbearing age, the costs associated with pregnancy should be a consideration. Your family’s medical history and possible medical predispositions are other factors. Even if your are covered by a group plan, there are issues associated with the type of plan to choose — co-pays, choice of doctors, flexibility, paperwork, etc. Our team can provide information and answers that will enable you to choose the right plan for you.
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