| Q: | When purchasing automobile insurance what should I consider? |
| A: | There are several things you should consider when purchasing automobile insurance that your independent agent will help you with. Here are a few:
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| Q: | Does my insurance policy cover a friend if I loan him/her my car |
| A: | When you loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy. |
| Q: | What is collision physical damage coverage? |
| A: | Collision is the loss you incur when your automobile collides with another vehicle or object like a telephone pole. |
| Q: | What is comprehensive physical damage coverage? |
| A: | Comprehensive provides coverage for direct physical damage losses you could incur to your car from something like a hailstorm. |
| Q: | How can I lower my automobile insurance rates? |
| A: | There are several things you can do to lower the cost of your automobile insurance. One way is to look for competitive pricing. An independent agent works with many companies and can provide you comparative rates and insure that your are getting the same coverage. Another way to lower the cost is to change your deductible. By raising your deductible you may lower the cost of your automobile insurance almost 10% You must be able to pay the deductible amount in case of a claim. You can also look for discounts that you may be entitled to. Some examples of discounts that may be available are: multiple cars under the same policy, carrying a homeowners policy with the same insurance company, different groups or associations. |
| Q: | What is homeowners insurance? |
| A: | Homeowners insurance is a form of personal lines insurance. The typical homeowners policy has two main sections: 1) covers the property of the insured and 2) provides personal liability coverage to the insured. |
| Q: | What do I need to know when purchasing homeowners insurance? |
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| Q: | What is "actual cash value"? |
| A: | When "actual cash value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property. |
| Q: | What is replacement cost"? |
| A: | When "replacement cost" coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices. |
| Q: | Where and when is my personal property covered? |
| A: | Coverage C of a homeowners policy provides named perils coverage. This applies to all your personal property (except property that is specifically excluded). |
| Q: | Should I purchase earthquake coverage? |
| A: | Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. If you live in an area that is prone to earthquakes, you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements. |
| Q: | Should I purchase flood coverage? |
| A: | If your property lies in a flood plain as determined by US Government Flood Maps. Ask your independent agent about a flood quote. |
| Q: | What is fire legal coverage? |
| A: | Fire legal coverage provides coverage to for you if you rent a business space and are held responsible for fire damages to that rented space. It does not apply to all business risks. |
| Q: | What is the difference between Replacement Cost (RC) and Actual Cash Value (ACV)? |
| A: | Replacement Cost is the current cost to replace property. Actual Cash Value is the replacement cost less depreciation. |
| Q: | What does 80% co-insurance mean? |
| A: | Insurance carriers require that an insured party insure at least 80% of the property's value in order to collect a partial loss in full. This is the way the insurance company encourages all insureds to adequately insure their property in relation to other insureds. |
| Q: | Does my policy cover physical damage to a vehicle I rent? |
| A: | This damage will be covered only if that type of coverage is purchased. |
| Q: | Can other people drive my business vehicle? |
| A: | Other people may drive your vehicle with your permission. It is important that they be listed on your policy if they are regular drivers of the vehicle. |
| Q: | How does an audit work? |
| A: | At the end of the policy term, the insurance company will review the policy and either charge or credit the policyholder based upon an audit of estimated figures. Examples of estimated auditable items include sales and payroll. Audits can be performed onsite by an auditor or via mail or telephone. A premium is charged for audit estimations. |
| Q: | Why do I need certificates of insurance from sub-contractors? |
| A: | An audit may require you to show proof that sub-contractors had their own insurance coverage. The sub-contractors' certificates of insurance will prevent you from being charged for their exposure. |
| Q: | What is General Liability? |
| A: | General Liability provides coverage if you are liable for damages to other individuals arising from your premises, general operations (ongoing and after completion) and products manufactured or sold. |
| Q: | What does Products/Completed Operations mean? |
| A: | Products/Completed Operations refers to the liability coverage for damages caused by your operation or products after the point at which you no longer have control of them. |
| Q: | What is Business Interruption/Extra Expense coverage? |
| A: | Business Interruption/Extra Expense coverage provides coverage for income loss and the expense of establishing a temporary site during repairs due to damages related to a fire or compensable loss. |
| Q: | What is the difference between "Named Insured", "First Named Insured" and "Additional Insured?" |
| A: | Named Insureds are those listed by name in the relevant block of the policy's declaration page. Although the named insured is commonly one person, partnership, corporation or other entity with insurable interests, multiple named insureds may be included. First Named Insured is the first "named insured" listed on the policy declarations (front page of the policy). This insured acts as the legal agent for all named insureds in initiating cancellation, requesting policy changes or accepting any return premiums. The first named insured may also be responsible for payment of the premiums. Additional Insured is an entity to which a policy's coverage is extended. An additional insured must be added to the policy prior to a claim being paid. There must be a tied to relationship between the additional insured and named insured. Being an additional insured on another's policy does not eliminate the need for someone to have his/her own Commercial General Liability policy. |
| Q: | What is a contract surety bond? |
| A: | Contract surety bonds include bid bonds, performance bonds, payment bonds, maintenance bonds, and subdivision bonds. |
| Q: | What is a bid bond? |
| A: | A bid bond is one which provides financial assurance that the bid has been submitted in good faith, and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds. |
| Q: | What is a performance bond? |
| A: | A performance bond is one which protects the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions. |
| Q: | What is a payment bond? |
| A: | A payment bond is one which guarantees that the contractor will pay certain subcontractors, laborers, and material suppliers associated with the project. |
| Q: | What is a maintenance bond? |
| A: | A maintenance bond is one which normally guarantees against defective workmanship or materials for a specified period. |
| Q: | What is a subdivision bond? |
| A: | A subdivision bond is one which guarantees to a city, county, or state that the principal will finance and construct certain improvements such as street, sidewalks, curbs, gutters, sewer, and drainage systems. |
| Q: | What is a commercial surety bond? |
| A: | Commercial surety bonds include License and permit bonds, Judicial and probate bonds (fiduciary bonds), Public official bonds, Federal (non-contract) bonds, and Miscellaneous bonds. |
| Q: | What is a license and permit bond? |
| A: | License and permit bonds are required by state law or local regulations in order to obtain a license or permit to engage in a particular business, e.g. contractors, motor vehicle dealers, securities dealers Blue Sky bonds, employment agencies, health spas, grain warehouses, liquor, and sales tax. |
| Q: | What is a judicial and probate bond? |
| A: | Judicial and probate bonds also referred to as fiduciary bonds, secure the performance on fiduciaries' duties and compliance with court order, e.g. administrators, executors, guardians, trustees of a will, liquidators, receivers, and masters. Judicial proceedings court bonds include injunction, appeal, indemnity to sheriff, mechanic's lien, attachment, replevin, and admiralty. |
| Q: | What is a public official bond? |
| A: | Public official bonds guarantee the performance of duty by a public official, e.g. treasurers, tax collectors, sheriffs, judges, court clerks, and notaries. |
| Q: | What is a federal (non-contract) bond? |
| A: | Federal (non-contract) bonds are those required by the federal government, e.g. Medicare and Medicaid providers, customs, immigrants, excise, and alcoholic beverage. |
| Q: | What does a surety bond cost? |
| A: | Surety bond premiums vary from one surety to another, but can range from one-half of one percent to two percent of the contract amount, depending on the size, type, and duration of the project and the contractor. In many cases, performance bonds incorporate payment bonds and maintenance bonds. When bonds are specified in the contract documents, it is the contractor's responsibility to obtain the bonds. The contractor generally includes the bond premium amount in the bid and the premium generally is payable upon execution of the bond. If the contract amount changes, the premium will be adjusted for the change in contract price. Payment and performance bonds typically are priced based on the value of the contract being bonded, not necessarily on the size of the bond. Commercial bonding has a greater range of pricing; high risk programs have a high premium and 10% collateral. |
| Q: | What is a surety bond? |
| A: | A surety bond is a written agreement where one party, the surety, obligates itself to a second party, the obligee, to answer for the default of a third party, the principal. There are two categories of surety bonds: Contract Surety Bonds Contract Surety Bonds provide financial security and construction assurance on building and construction projects by assuring the project owner (obligee) that the contractor (principal) will perform the work and pay certain subcontractors, laborers, and material suppliers. Contract surety bonds include:
Commercial Surety Bonds Commercial Surety Bonds guarantee performance by the principal of the obligation or undertaking described in the bond. Commercial surety includes:
Information provided by Surety Information Office |
| Q: | How much life insurance should an individual own? |
| A: | Rough "rules of thumb" suggest an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed. Important factors include:
It is recommended that a person's insurance advisor be contacted for a precise calculation of how much life insurance is needed. |
| Q: | What about purchasing life insurance on a spouse and on children? |
| A: | In certain circumstances, it may be advisable to purchase life insurance on children; generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s). It is of utmost importance that the income earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance before contemplating the purchase of life insurance on children or on a non-wage earning spouse. In a dual-earning household, it is important to protect the income earning capacity of both spouses. Life insurance on a non-wage earning spouse is often recommended for the purpose of paying for household services lost at this individual's death. |
| Q: | Should term insurance or cash value life insurance be purchased? |
| A: | Although a difficult question--one whose answer will vary depending on circumstances--several principles should be followed in addressing this issue. It must first be recognized that in any life insurance purchasing decision, there are at least two basic questions that must be answered:
The question contained in (1) involves an "insurance" decision and the question contained in (2) requires a "financial" decision. The "insurance" question should always be resolved first. For example, the amount of life insurance that you need may be so large that the only way in which this needed amount of insurance can be afforded is through the purchase of term insurance with its lower premium. If your ability (and willingness) to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the "financial" decision--which type of policy to buy. Important factors affecting the "financial" decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk. |
| Q: | How does mortgage protection term insurance differ from other types of term life insurance? |
| A: | The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25 or 30 years. Although the face amount decreases over time, the premium is usually level in amount. Further, the premium payment period often is shorter than the maximum period of insurance coverage--for example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years. |
| Q: | Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan? |
| A: | Yes; the purchase of a new mortgage protection term insurance policy is usually not required by the lender. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured's death. Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy? Credit life insurance is frequently more expensive than traditional term life insurance. Further, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advisable due to its relatively high cost. |