FAQ
General Questions
Q. What questions will I be asked when I apply for an insurance policy?
A. You will be asked general information questions, such as your name, address, age, gender, etc. You will also be asked questions to determine the type of insurance program you qualify for. Insurance companies offer different programs based on the risk associated with the individual being insured. For example, adults with good driving records will generally pay less for auto insurance than a young driver with traffic tickets.
Q. What are the advantages of using an agent to purchase insurance?
A. Personalized service. A local, independent agent will take the time to get to know you so they can deliver quality insurance at competitive prices that will meet your specific needs. An agent also provides the advantage of a friendly voice on the other end of the phone when you file a claim.
Automobile Insurance
Q. What are some practical things I can do to lower my automobile insurance rates?
A. First, it's important that you get quotes from several companies to compare prices. Also, determine whether you qualify for any discounts. For example, many insurers offer a discount if you insure multiple cars under the same policy and pair your auto and home insurance together for additional discounts. Good driver discounts and good student discounts are other examples of programs insurers offer. Be sure to ask us about any discount plans you may qualify for. Another easy way to lower the cost of your automobile insurance is to increase your deductible. Simply raising your deductible from $250 to $500 can lower your premium by as much as 5% or 10%.
Q. I have an older car that is not worth much - do I really need to purchase automobile insurance?
A. California requires that all drivers have automobile liability insurance. This law was enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the negligence of others. The cost of repairing an older car is often greater than its value. In this case, your insurer will usually just "total" (consider the car a total loss) the car and give you a check for the car's market value less the deductible. Many people with older cars decide not to purchase any physical damage coverage.
Q. What is the difference between collision physical damage coverage and comprehensive physical damage coverage?
A. Collision physical damage refers to losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage. Comprehensive provides coverage for loss/damages that are not the result of a collision, such as theft, fire, or a hailstorm.
Q. What factors can affect the cost of my automobile insurance?
A. A number of factors can affect the cost of your auto insurance. The type of car you drive, the amount of miles you drive, your driving record and where your car is garaged can all affect how much your auto insurance will cost you. Even your marital status can affect the cost of your insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.
Homeowners Insurance
Q. What are some practical things I can do to lower the cost of my homeowners insurance?
A. You may want to start by getting a comprehensive review of your policy and needs from your local agent. Be sure to compare prices; quotes on homeowners insurance can vary by hundreds of dollars for the same coverage on the same home. Also, determine whether you qualify for any discounts. For example, many insurers offer a discount when you insure both your automobile and home with them. Some offer discounts if there are deadbolt exterior locks on all your doors or if your home has a security system. Be sure to ask us about any discounts you may qualify for. Another way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as 5% or 10%.
Q. What does homeowners insurance cover?
A. The typical homeowner's policy has two main sections: Section I covers the property of the insured and Section II provides personal liability covered for the insured. Almost anyone who owns or leases property needs both types of insurance. Homeowners insurance is usually is required by the lender to obtain a mortgage.
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 on a replacement cost basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.
Q. What factors should I consider when purchasing homeowners insurance?
A. First, consider the amount and type of insurance you need. Your home should be covered at 100% of its replacement cost. Next consider the limits you need for personal property and personal liability. Then determine whether you want to add any endorsements to your policy, such as a personal property replacement cost endorsement. Review these factors with your agent to determine whether there are any gaps in coverage you may not have been aware of. We can explain the details of the policy's exclusions and limitations as well as recommend an insurance company that will live up to your expectations.
Q. What are the policy limits (i.e., coverage limits) in the standard homeowners policy?
A. The policy limit for the dwelling is set by the policy owner at the time the insurance is purchased. The policy limit for the other structures is usually equal to 10% of the policy limit for the dwelling, unless it is determined that you need additional coverage for a pool, guest house, cabana, etc.
The policy limit on this coverage is equal to 50%-70% of the policy limit on the dwelling.
Coverage for additional expenses incurred when the residence cannot be used because of an insured loss (loss of use) is limited to 20% of the policy limit on the dwelling.
Personal property and loss of use limits can be increased for an additional premium. The coverage limit on personal liability is determined by the policy owner at the time the policy is issued. The coverage limit on medical payments to others is usually available up to $25,000 per injured person.
Q. Do I need earthquake coverage? How can I get it?
A. The standard insurance policy pays for damages directly caused by and Earthquake. This coverage is available to all homeowners as a separate policy. If you live in an area that is more likely to have an earthquake, you'll pay more than if you live in an area that is unlikely to have an earthquake. We can help you weigh the costs and benefits of this coverage before you decide to purchase.
Renters Insurance
Q. Why should I buy renters insurance?
A. If you rent an apartment or house, renters insurance provides important coverage for both you and your possessions. A standard renters policy protects your personal property in case of theft or damage and may pay for temporary living expenses if your rental is damaged. It can also shield you from personal liability. Anyone who leases a house or apartment should consider this type of coverage.
Q. How does a renters policy protect my personal property?
A. A renters policy provides named perils coverage. This means that the policy only pays when your property is damaged or destroyed by any of the ways specifically described in the policy. These usually include:
- Fire or lightning
- Windstorm or hail
- Explosions
- Riots
- Aircraft
- Vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam
- Freezing
- Sudden and accidental damage from artificially generated electrical current
- Volcanic eruptions (not including earthquake or tremors)
Q. Why do some apartment complexes require tenants to have renters insurance?
A. Apartment complex owners buy insurance policies to cover liability, and their buildings and personal property. These policies do not, however, cover tenants' property or liability. By requiring their tenants to have renters insurance, the apartment owner ensures that tenants do not assume that their liability and personal property are covered by the owner's policy. Even though this requirement benefits the apartment complex owner, it also benefits the renter. We recommend that you purchase renters insurance regardless of what your landlord requires.
Q. What if I share my apartment with a roommate? Do we both need to have renters insurance?
A. A standard renters policy covers only you (the policy holder) and any relatives that live with you. If your roommate is not a relative, each of you will need your own renters policy to cover your personal property and to provide liability coverage for your own actions.
Other Insurance
Q. What is a personal umbrella liability policy?
A. The personal umbrella liability policy increases your liability protection. This single policy acts as an "umbrella" over all of your other personal liability policies - home, auto, boat, RV, etc. - so that you have a higher personal liability limit than what would otherwise be available. In certain circumstances, an umbrella policy may provide personal liability coverage that is otherwise excluded from your other policies.
Q. How do I know if I need a personal umbrella liability policy?
A. It used to be that the only people who needed an umbrella policy were those who stood to lose a sizable amount of assets in the event of a lawsuit. However, in our increasingly litigious society, even people with modest incomes and assets may be the subject of a large lawsuit. Umbrella policies can provide additional asset protection because they have much greater coverage limits than homeowner or automobile policies. Contact your agent to discuss your specific needs and determine whether a personal umbrella liability policy is recommended.
