What is the difference between ‘property damage liability insurance’ and ‘collision insurance’?
Property Damage Liability insurance is protection for the cost of damage you cause to the property of others. Collision insurance covers damage to your own car caused by a crash or upset, with exception of any deductible.
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Should I buy collision insurance if I have an older model car?
This is a personal decision. You may want to consider the value of your car or the amount of loss you can personally assume.
What is the difference between collision insurance and Comprehensive Coverage?
Collision and Comprehensive insurance may vary by state. Generally, Collision insurance covers damage to your automobile caused by collision with another object or by upset. Comprehensive insurance covers damage to your automobile from vandalism, theft or glass breakage.
If my car is stolen, will my policy pay for me to rent a car?
Yes, if you have Other Than Collision (Comprehensive) coverage. Normally, once 48 hours have passed and the theft has been reported to the police and your insurance company, the expense for a rental car is provided. Check your policy to see what auto rental coverage is applicable. The policy usually lists daily and lump sum dollar amounts.
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What are ‘uninsured motorists’ insurance and ‘underinsured motorists’ insurance?
Uninsured Motorists insurance and Underinsured Motorists insurance vary by state and are sometimes optional. Uninsured Motorists insurance pays for injury to you, family members, and passengers in your car caused by an at-fault driver who does not have insurance. Underinsured Motorists insurance provides protection similar to Uninsured Motorists coverage, but applies only when the at-fault driver¹s insurance policy does not provide sufficient coverage to pay the claim.
Are uninsured and underinsured insurances duplications of my health insurance coverage?
Sometimes they are. Many people save substantially by coordinating their health insurance coverage with auto policies.
What is "no-fault" automobile insurance?
Where applicable, No-Fault insurance generally permits automobile accident victims to be directly reimbursed for medical and hospital expenses and loss of income by their own insurance company regardless of who was at fault.
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Can I sue for damages in a no-fault state?
In some no-fault states, suing is an option only if a serious injury is incurred or a monetary threshold is met. Each state defines when and how this should work. Under no-fault, you are entitled to be promptly reimbursed for your medical expenses and loss of earnings, regardless of whether a suit can be brought.
Do I need special coverage to travel through a ‘no-fault’ state if I live in a state that does not have ‘no-fault’?
Many insurance companies now offer automobile policyholders out-of-state coverage that automatically provides the required insurance for the state or Canadian province in which you are traveling.
If my child drives another person’s car will he/she still be covered under my policy?
A daughter or son can drive someone else's car (not owned by a family member), if he or she is a resident of your household and is entitled to use that vehicle. However, if you or your child is driving someone else's car with their permission, many times, the vehicle owner's insurance covers the damage.
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Can I use my car in a car pool?
If you use your car in a typical share-the-ride pool where everyone takes turns driving, or if you drive all the time and only collect for expenses from the passengers, your policy provides regular coverage. As long as the car pool is not intended as a business operated for profit, insurance protection is not affected. However, car pooling results in an increased number of passengers in the car, so you should consider increasing liability coverage.
What are custom furnishings and equipment?
Custom Furnishings and Equipment are most commonly found in pickups and vans and include, but are not limited to: special carpeting and insulation; furniture; televisions; cooking and sleeping facilities; height-extending roofs; and custom murals, paintings or other decals or graphics. Recovery for loss to any custom furnishings or equipment is excluded unless coverage is specifically endorsed by the policy.
In many states, why are the "under-age female" rates less than those for an "under-age male"?
Insurers base rates on accident frequency and loss costs. Statistics show that under-age females have fewer accidents and better driving experiences than males. Insurers believe this good experience warrants the reduced cost.
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Do automobile insurance premium payment plans cost more?
Yes, they may. Like any installment plan, insurance premium payment plans may include interest or fees. You should ask your insurance representative how much the interest or fees will be.
Can my insurance company ask for more money once we have agreed on a policy?
Most insurance companies write non-assessable policies for which there is only one rate. Therefore, if an insurance company has a year full of catastrophes, it cannot ask the policyholder for more money. On an assessable policy, the insurance company could ask the insured for more money to cover losses.
What should I do if I am involved in accident?
You should immediately report all accidents to the police and your insurance company. The parties involved should exchange names, addresses, license and plate numbers and insurance company information. You should also note the date, time and exact location of the accident, and the names and addresses of any witnesses.
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What happens if I am driving someone else's car and get in an accident?
In most states, coverage for damage to non-owned vehicles, for example, rented or borrowed vehicles, is no longer provided under your liability coverage. If you have not purchased Collision or Other Than Collision coverage for at least one of your owned autos, you will not be covered for damage to autos that you rent or borrow.
Are my limits reduced if I have more than one accident?
Your automobile insurance protection is not reduced if you suffer more than one accident while the policy is in force. The same amount of coverage applies to each accident.
Is automobile insurance available for everyone?
Today, in almost every state, insurance companies participate in special plans to make sure that any person can obtain automobile insurance regardless of his or her driving record. While coverage in some of these plans may cost more, insurance is available for all drivers.
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Can I cancel my automobile insurance with my company?
Yes, you can cancel your insurance at any time and the insurance company will return the appropriate amount of pre-paid premium.
Can my insurance company cancel my automobile policy?
Yes, although this is rare. There are legal provisions that allow an insurance company to cancel your automobile insurance. The most frequent reason for cancellation is non-payment of premium by the insured. Insurance companies must have good reason to cancel a policy, and ample notice must always be given.
What is an endorsement?
An endorsement is an amendment to your policy written especially to cover unique items just for you. It is also a change to your policy that is made during the policy's term.
What is the meaning of "depreciation" when applied to automobile insurance?
Depreciation is a decrease in the value of your Auto due to age, wear and tear.
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What is the meaning of "actual cash value"?
The phrase "actual cash value" refers to what it would cost to replace your damaged vehicle with one in similar condition and with similar mileage. Since conditions such as mileage, un-repaired previous damage and tire wear are all considered in determining actual cash value, that sum may not equal the market price for an automobile of the same make, model and year.
What is the meaning of "subrogation" when applied to automobile insurance?
When your insurance company pays for a loss caused by another driver, your company may have the right, by law or policy provision, to recover an amount of the loss from the other person or their insurer.
What is a passive restraint system?
A passive restraint system works automatically to protect you and your passengers from severe injury during an auto accident. Air bags automatically inflate in frontal crashes and absorb the impact, and passive belts automatically wrap around the driver and passenger when the doors close. You may be eligible for a credit on your insurance premium if these systems are installed in your automobile.
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Home Insurance F.A.Q.
General Questions
What does my homeowner insurance policy cover?
Basically, homeowner insurance covers your house, any adjacent structures (such as a garage), and your personal belongings. Homeowner insurance protects you from specific types of home-related accidents and incidents. The most common types are fire, theft and vandalism.
Homeowner coverage goes beyond your home and possessions, providing for additional living expenses, such as hotel expenses, if you are temporarily unable to use your house due to an accident. The policy also provides liability protection. If you or a member of your household is responsible for injuring someone or damaging someone's possessions, your policy covers it.
When purchasing homeowner insurance, remember that you select the amount of coverage you will need to replace your home and property, and an amount to cover any liabilities. Also note that most standard policies do not cover flood damage. Especially if you live in a high-risk area, you should purchase flood insurance separately.
Is the present amount of dwelling coverage on my homeowner policy sufficient?
If your policy’s value is large enough for you to rebuild your house if a total loss occurred, then you are properly insured. You should review your insurance periodically to make sure you are adequately covered because the replacement cost of your home will change over time.
Can I change the amount of insurance on personal items in my home?
Yes. Initially, your personal property coverage usually reflects 50 percent of your home coverage. It may be increased or decreased, depending upon state requirements.
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Are there any items in my home not covered by my homeowner policy?
Most items are covered for loss or damage and are subject to limits. For example, if jewelry was stolen from your home, you may be reimbursed up to a certain limit, perhaps $1,000. Some items may not be covered unless they are specifically insured, or "scheduled." It is wise to itemize valuables to be sure that your personal property is properly insured.
If I cannot live in my home because of damage from a covered peril, will my insurance policy cover my living expenses?
Yes. Homeowner coverage allows for Additional Living Expenses. The amount of coverage is generally 20 percent of the amount of coverage on your home. If you have $100,000 coverage, you may have as much as $20,000 for additional living expenses.
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If my home or personal property is water damaged by a pipe burst in my home, what is covered under the homeowner policy?
You are covered up to your policy limits to repair or replace items damaged to your home and personal property, and for any additional damage caused while the faulty system is being repaired. For example, you are covered for the expense of tearing out the wall or ceiling to replace a broken pipe. You are not, however, covered for the cost to replace the pipe. You are not covered for the cost to repair or replace the system, unless the water damage was caused by freezing. In order for water damage to be covered, it must be sudden and accidental. Damage resulting from a slow leak over a period of time would not be covered.
What coverage do I have if my home is damaged by the plumbing or heating system freezing?
You are covered for resulting damage to your home or personal property as well as for damage to the plumbing or heating system itself. If your home is vacant or unoccupied at the time the freeze occurs, you are covered as long as you have taken the necessary precautions to keep the building heated or had the water turned off and the plumbing and heating systems drained.
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What coverage do I have if my pets cause damage to my personal belongings?
There is no coverage on the homeowner policy for loss or damage to personal belongings caused by a pet or other domestic animal.
Is there any limit on the insurance for my silverware?
In most states, there is a limit of $2,500. If you need more coverage, you should consider "scheduling" the silverware.
Do I have coverage if my home is damaged by vandalism?
You have coverage up to the limits of your policy, unless your house was vacant for 30 or more consecutive days immediately preceding the incident.
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What protection do I have if a visitor is injured on my property?
If you are legally liable for the injury, you are covered up to your policy limits under the liability portion of your homeowner policy. Usually, the insurance company will also pay for medical expenses for your visitor, up to specified limits. Exclusions and limitations vary depending upon the state in which you live.
Is my business property covered by my homeowner policy if I conduct business at home?
There is coverage up to $2,500 for property on the "residence premises" that is used at any time or in any manner for a "business" purpose.
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Does my policy cover debris removal?
Yes, in the case of a covered loss, your homeowner policy covers the expense to remove debris, such as shingles that blew off your roof.
How can I insure special items?
You can schedule the item in your homeowner policy. This means you specifically describe and insure these items. You will pay additional premium, depending upon the amount you wish to insure such items for. Most people schedule jewelry, furs, art, silver, antiques, coin and stamp collections and photographic equipment.
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Does my homeowner policy provide protection against liability for my recreational motor vehicles?
In most cases, you have liability protection on recreational vehicles such as a snowmobile as long as any bodily injury or property damage occurs on the insured's premises.
Does homeowner insurance premium plans cost more?
Usually, yes. Like any installment plan, insurance premium payment plans may include interest or fees. You should ask your insurance representative how much the interest or fees add up to.
Can my insurance company ask for more money once we have agreed on a policy?
Most insurance companies write non-assessable policies for which there is only one rate. Therefore, if an insurance company has a year full of catastrophes, it cannot ask the policyholder for more money. On an assessable policy, the insurance company could ask the insured for more money to cover losses.
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Can I cancel my homeowner policy?
Yes, you may cancel your insurance at any time and the insurance company will return the appropriate amount of pre-paid premium. However, if there is an existing mortgage on your home, be sure to have another policy in place because mortgage companies require that you have adequate homeowner insurance coverage.
Can my insurance company cancel my homeowner policy?
Yes, although this is rare. There are legal provisions that allow an insurance company to cancel your homeowner insurance. The most frequent reason for cancellation is non-payment of premium by the insured. Insurance companies must have good reason to cancel a policy, and ample notice must always be given.
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What is insurance-to-value?
Insurance-to-Value means having adequate coverage for the actual replacement value of your home in the event that a loss occurs.
What is "replacement cost" and "actual cash value"?
Replacement Cost is the amount of money you would need to spend to replace your home with another of like kind and quality on the same site. Actual Cash Value is the replacement cost, less depreciation. To determine the actual cash value, the general condition and character of your home are taken into account. Replacement Cost and Actual Cash Value are generally used in reference to the home, not to the land it is built on.
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What is coinsurance?
Coinsurance is a provision in a homeowner insurance policy that states that if you fail to carry at least 80 percent of the replacement cost of the property, you may receive a reduced loss settlement. The coinsurance clause relates to the value of the property when the loss occurs, not the time at which the policy was written. Most policies have a coinsurance provision.
Could you give me an example that explains coinsurance?
Assume that property valued at $100,000 is insured for only $40,000 and a loss of $40,000 occurred. If the policy had no coinsurance clause, you would get $40,000. If the policy contained the usual 80% coinsurance clause, you would get only $20,000. Because you carried only one-half ($40,000) of the 80% ($80,000) insurance required by the coinsurance clause, you would receive only one-half ($20,000) of the $40,000 loss.
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What is a deductible?
The deductible is the initial amount of the loss for which the policyholder is responsible. The insurance company is responsible for the amount in excess of the deductible up to specified limits.
What does "loss away from premises" mean?
Loss away from premises is a loss incurred by the policyholder while he or she is away from the home, for example, if a theft occurred in a hotel room while the policyholder was on vacation.
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