Auto Insurance FAQs
What should I do if I'm involved
in an accident? The first priority is the condition
of those involved. Call for medical help if anyone at
the scene is injured. Notify the police as soon as possible.
Obtain the names, addresses, and telephone numbers of
all persons involved, including passengers and witnesses,
and the license plate numbers of all other cars involved.
It's best not to
admit an accident was your fault, even if you think it was. A simple apology
can be construed as an admission of fault. Let the authorities determine
who was responsible. Auto accidents can be disorienting even if you are
not physically injured. You may not be aware of all factors leading up to
the crash, so state only what you know about what happened. Contact your
insurance company as soon as possible, even if damages were minor.
[Back to Auto FAQ List]
What does it mean when a car is "totaled"? After an accident
or theft recovery, if the insurance company decides your car is "totaled,"
it means the estimate of repairs exceeds the car's value. At this point,
the insurance company will likely send you a check for your car's value.
It gets to keep your car unless you make arrangements to buy it back "as
is".
[Back to Auto FAQ List]
What should I do if another driver hits my car?
If you were not at fault in the accident, you will make
a third-party claim to the at-fault driver's insurance
company. Because you are the claimant, the insurance
company typically will issue the check directly to you.
It's your responsibility to pay the repair shop, and
the lender if you have a car loan. If the other driver
doesn't have insurance, your uninsured motorist coverage
will take effect.
[Back to Auto FAQ List]
How do I handle a claim if I cause an accident? If
you own your vehicle and have collision insurance, you
will file a first-party claim with your insurance company.
It may issue a check either to you, the shop that repairs
your vehicle, or to both of you. If you have a lease
or a loan, the lending institution may be named on the
check. Of course, you will also have to pay your deductible.
If other vehicles were involved, the insurance company
will settle with the other drivers and you probably
won't be involved.
[Back to Auto FAQ List]
What happens if my car is stolen? If your car
was stolen, be prepared to wait. Most insurance companies
will impose a waiting period to see if the police recover
your car. If your car is still missing after the waiting
period, usually 21 days, you should receive a settlement
soon after. If your car is recovered during the waiting
period, the insurance company will want to see a repair
estimate before deciding how to proceed.
If your policy has a provision for replacement transportation, you may be required to pay
for a rental car out of your own pocket and then submit a claim to the
insurance company for reimbursement.
[Back to Auto FAQ List]
What effect does my driving record have on my auto
insurance? A good driving record is critical to
your ability to obtain auto insurance. If your past
is free of tickets, accidents, and drunk driving arrests,
chances are excellent that you will pay much less than
the person who has a history of these infractions.
[Back to Auto FAQ List]
Does the kind of car I drive matter to an insurance
company? Yes! In addition to your age and driving
record, the type and value of the car you drive is one
of the most important factors in the amount of your
premium. Sports cars, for example, can cost significantly
more to insure because they may be a favorite among
thieves, because statistically people tend to drive
them faster, and because they may have a higher replacement
cost than a sedan or a van.
[Back to Auto FAQ List]
Why would I want to buy more insurance than state
law requires? If you are found to be liable for
an amount greater than the coverage limits of your policy,
you must pay the difference. If you don't have enough
cash, the injured party can go after your home, financial
assets, and even future earnings. It's wise to consider
increasing your liability limits when you own a house
or other valuable assets.
[Back to Auto FAQ List]
Why does a high deductible cause my premium to
go down? Generally, the more risk you assume, the
less risk you assign to the insurance company, which
charges according to how much risk it is insuring against.
A deductible is the initial dollar amount of a loss
that you must assume before the insurance company will
pay your claim. Auto insurance deductibles typically
range from $250 to $1,000.
[Back to Auto FAQ List]
Why does my insurance company want to know my
age? Statistically, the risk of an automobile accident
fluctuates with age. Teenagers are among the most expensive
drivers to insure because their inexperience makes them
more likely to be in an accident than drivers over age
25.
Just as a teenager
will have to pay more for being young and inexperienced, drivers can expect
to pay less as they reach the age range where they are statistically the
safest on the road, roughly from ages 40 to 55. In some cases, rates may
go up as a driver becomes elderly.
[Back to Auto FAQ List]
Can I insure my boat? Yes. Recreational boat
insurance is similar to automobile insurance. You can
purchase liability coverage and physical damage coverage.
Some policies also offer medical payments, uninsured
boater coverage, and legal defense coverage. If you
borrowed money to buy the boat, your lender will probably
require you to carry insurance.
[Back to Auto FAQ List]
I am retired, but I work part-time as a handyman.
Do I need special insurance coverage for my truck, which
I use when I'm hired to make repairs? Generally,
a personal auto policy may be all you need unless you
are driving other people around frequently. In some
cases, an independent contractor such as a carpenter
or landscaper may need a commercial policy -- if the
vehicle is used more than 50 percent of the time for
business purposes. And personal auto policies must have
increased limits to cover any equipment that is permanently
attached to the vehicle, such as an expensive generator.
[Back to Auto FAQ List]
I have towing and labor coverage on my auto policy.
Does it only come into effect after an accident?
Towing and labor coverage provides emergency road service
and pays for towing charges. This coverage is not limited
just to accidents, but can be used any time your car
breaks down. Labor such as a tire change or battery
jump-start performed at the site of a disabled vehicle
will be covered, but not the later repair work performed
in a service station. [Back to Auto FAQ List]
What is the difference between the cancellation
and non-renewal of an auto policy? A non-renewal
means only that your company does not want to offer
you a policy any longer -- possibly because of your
driving or claims record over the last three to five
years. More than likely, you will find other insurers
that are willing to provide insurance at a higher price.
Auto insurers may
cancel your policy at any time if you fail to pay your premium, lose your
driving privileges, or have not accurately reported the facts relating
to your level of risk. A cancellation will make it hard to get insurance
for a long time to come.
[Back to Auto FAQ List]
California requires minimum insurance coverage
of 15/30/5. What does that mean? Minimum liability
limits of 15/30/5 refers to $15,000 bodily injury liability
per person, $30,000 per accident, and $5,000 for property
damage. Insurance requirements vary from state to state. [Back to Auto FAQ List]
I plan on driving through several states during
my next vacation. I carry the minimum coverage allowed
by my state, but will my insurance cover me if I have
an accident in another state while I am away? Clearly,
the laws concerning insurance coverage can vary greatly
from state to state. It might be comforting to know
that if you have the minimum auto liability coverage
for your home state, but are involved in an accident
in another state, your policy will generally adjust
to meet that state's minimum legal requirements. [Back to Auto FAQ List]
Can a driver be found partially to blame for an
automobile accident? In some states, comparative
negligence laws make it possible for more than one driver
to share responsibility. If a red car is driving too
fast and rear-ends a blue car, but the blue car did
not have functioning taillights, then the red car may
be found 70 percent responsible and the blue car 30
percent. A driver may only collect damages for the percentage
of the accident that was not his or her fault, so the
driver of the blue car could recover only 70 percent
of the damages. [Back to Auto FAQ List]
What exactly are the types of coverage included in a standard personal auto policy?
- Bodily Injury Liability - Pays for medical expenses, legal expenses, and judgments against you
when you or your car is involved in an accident that causes the injury
or death of another person.
- Property Damage Liability - Pays for damages to the property of others, caused by you or your vehicle.
- Uninsured/Underinsured Motorist (UM/UIM) - Covers the costs associated with damage or injury
caused by an uninsured, underinsured, or hit-and-run driver.
- Medical Payments - Covers the 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. Collision coverage requires the payment of a deductible
by the insured.
- Comprehensive Physical Damage - Pays for damage to your car that is not the result of an
auto accident, such as theft, vandalism, fire, hail, natural disasters,
hitting a deer, etc. Comprehensive coverage also requires a deductible,
and will only pay as much as the car was worth before sustaining the damage
.
[Back to Auto FAQ List]
Home
Insurance FAQs
Home Insurance Answers:
Why should I buy homeowner's insurance?
A home can require a tremendous investment of money,
time, and energy. Homeowners insurance is designed to
protect that investment by insuring the actual structure
or structures and the personal possessions in and around
them, as well as providing liability protection for
the residents. Through homeowner's insurance, you can
protect yourself and your family from enormous loss
in the event of damage or destruction to your home and
property. Most likely, if you have a mortgage on your
home, you are required to carry homeowner's insurance.
[Back to Home FAQ List]
What is a deductible? Deductibles
place responsibility for the initial cost of certain
claims -- and some of the risk -- back on the insured.
Basically, a deductible is the amount you must to pay
out of pocket before the insurance company will step
in and pay for the loss of your property. Your deductible
has a direct effect on the amount of your premiums.
The higher the deductible -- that is, the more you have
to pay out of pocket -- the lower your premiums will
be.
[Back to Home FAQ List]
How much will I pay for homeowner's
insurance? To set the amount of your premiums, the
issuing company will first want to assess what kind
of risk you might present. Be prepared to share plenty
of information about you and your home. The company
will consider your credit rating, whether you have a
criminal record, your previous addresses, and if you
have a history of insurance claims. An insurer will
want to know what kind of work you do, your employment
history, your marital status, and your age. An insurer
will also want to know about the construction of the
home. Is it brick or wood? How many square feet is it?
How old is it? Are there any unattached structures on
the parcel? How far is the house from a fire station?
Is it perched on a cliff above the ocean? Deadbolt locks,
smoke detectors, and other preventive measures can lower
your rates. But certain kinds of pets, a pool, and other
potential opportunities for personal injury can raise
your rates. So can running a home business.
[Back to Home FAQ List]
How can I lower my premium?
If you want to lower your monthly premium, or buy more
coverage for less money, one way is to carry a higher
deductible. A higher deductible also may make sense
if you believe that your chances of making a claim are
remote enough to warrant assuming extra financial risk.
[Back to Home FAQ List]
What if I'm found liable for injuring
another person? As long as the injury was due to
your negligence and was not intentional, your homeowner's
policy should cover any medical bills and legal expenses,
up to the liability policy limits.
[Back to Home FAQ List]
What kinds of damage does a basic
homeowner's policy cover? 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 a building
- Volcanic eruption
You can also step up coverage to include:
- Falling objects
- Weight of ice, snow, and sleet
- Three kinds of water-related damage from home utilities
or appliances
- Electrical surge damage
Protection is subject to policy limits and deductibles
can vary.
[Back to Home FAQ List]
What damage to my house would not
be covered by my homeowner's policy? It depends
on the type of policy you own. But in general, unless
you buy additional coverage, you won't be compensated
for losses due to floods, earthquakes, nuclear accidents,
wars, intentional damage, and normal wear and tear.
Other exclusions may also apply.
[Back to Home FAQ List]
If my home burned to the ground,
how much money would the insurance company give me?
Insurance companies normally use one of two methods
to figure how much you will be reimbursed for a loss
if the amount is less than your coverage limits. The
most common calculation is the actual cash value, which
is the replacement value minus depreciation. The second
calculation is simply the replacement cost of the lost
property with no depreciation, but usually with a maximum
value. Also, don't forget that the company will subtract
the amount of your deductible from the settlement.
[Back to Home FAQ List]
How will I be able to recall the
contents of my home if it is destroyed?
It's wise to generate a detailed list of your possessions.
Making a video or photographic record of your possessions
is advisable, as well. You may want to consider storing
your inventory in a safe-deposit box off your property,
or at least in a lockable fireproof storage box in your
home. Not only will a record of your possessions take
most of the guesswork out of filing a claim, police
say such documentation can help you prove ownership
in case your belongings are recovered from a thief.
Also, you may want to videotape or photograph the mess
after a disaster and before you begin the cleanup. This
can help you prove the extent of damage without having
to wait to get your life back in order.
[Back to Home FAQ List]
What can I do about expensive possessions,
like jewelry and camera equipment, that are far more
valuable than the coverage limits of my homeowner's
policy? You can purchase additional coverage, through
an endorsement to your existing policy or with a separate
policy, to extend the limits of coverage for specific
items.
[Back to Home FAQ List]
I want to buy a condominium. Will
my homeowner's policy be different from the one I had
when I owned a house? Insuring a condominium is
different from insuring a house because of the way ownership
is structured. A homeowner's policy covers against losses,
and you can only suffer a loss if you have ownership.
Because there are areas of common ownership in a condominium
complex, your homeowners association may have a master
policy. The extent of the coverage you buy will depend
on what the master policy covers. The standard homeowner's
policy for condominiums is called HO-6. It will likely
cover your personal property, shield you and your family
from some types of liability, plus pay to repair any
portion of the unit you own under the terms of the condominium
or cooperative documents.
[Back to Home FAQ List]
I'm renting an apartment. Will
my landlord's insurance cover my belongings if the building
burns down? If you rent an apartment or a house,
the building owner is responsible for any perils that
befall the property. Rest assured, if the place burns
down, your landlord's insurance is responsible to compensate
him for damage to the structure. But if your personal
belongings -- your furniture, your stereo, your clothing
-- are destroyed, it's you who loses - unless you have
renter's insurance. Renter's insurance is a kind of
homeowner's policy for non-homeowners. It contains most
of the same provisions of a basic homeowner's policy,
except the part that covers the home itself. Up to certain
limits, a renter's policy covers your personal belongings
against destruction or theft, and protects you against
claims of liability if you cause injury to someone or
an individual's property.
[Back to Home FAQ List]
Besides me, who else is covered
under my homeowner's policy? In general, a homeowner's
policy will have a named insured, which is usually the
owner or tenant named on the deed or lease. The named
insured's spouse is covered as well, even if he or she
is not named on the policy declaration. Other users
and residents also may be covered to a lesser extent
by the personal property and liability provisions in
the policy. For instance, the insured's children or
someone under 21 in the insured's care would likely
be covered. Employees such as gardeners or housekeepers
may also be covered against loss of personal property
on the premises. And you may also extend coverage to
your guests if you make a request to your insurance
company in advance.
[Back to Home FAQ List] |
