Insurance can be a confusing, complex entity. For clarity, Haslett & Associates Insurance offers these explanations to frequently asked questions.
What is included in my homeowner’s insurance policy coverage? Is there anything specific I need to keep in mind before buying a policy?
Your homeowner’s insurance covers your house, any permanent fixtures and fittings, garden walls, gates, fence, pool, and your personal belongings. Homeowners insurance should protect you from any types of home-related accidents and incidents except when specifically excluded in the policy. The most common types are exclusions are flood, earthquake, damage caused by animals and insects. It also provides additional living expenses such as hotel expenses in case you are unable to stay in your home due to accidents or other incidents. The policy also provides liability protection. Ideally, you should select the amount of coverage which can replace your home and personal property. Also, if you are staying in a flood or earthquake-risk area, you should separately purchase flood/earthquake insurance as basic homeowner’s insurance doesn’t usually cover flood and earthquake.
Can I lower my home insurance premium?
Yes, you can lower your homeowner insurance premium by asking for discounts on your current policy, holding multiple insurance policies with your insurance carrier, and increasing your deductible.
What do I do if I have a car accident?
First, you need to notify the police if the accident occurs on public property or if anyone is injured. A police report can document your claim if you were not at fault or only partially at fault. Otherwise, facts can be subverted and it becomes your word against theirs. Exchange information with the other driver(s) involved in an accident. Next, immediately contact your insurance agent or company. Do what the insurance company or agent advises you to do.
Is there any advantage of buying car insurance online?
The common misconception is that you save by dealing direct with the insurance company’s automated policy systems or employee representatives. However, an independent insurance agent can compare rates with many different carriers at the same time, finding the best coverage for the lowest price. A professional insurance agent knows all of the in’s and out’s of saving money on insurance, just like a professional tax preparer or accountant knows the in’s and out’s of saving money on taxes. Any initial savings on service fees may be greatly offset by the cost of what you don’t know about taxes and the deductions that you may have missed. What you don’t know about insurance could cost you just as much.
What is Term Insurance and how does it differ from Whole Life Insurance?
There are two main types of life insurance policy. Term Insurance pays out a sum if the holder dies during the fixed period of the policy, usually 10, 20 or 30 years. The premiums are lower and the policy is designed to protect the income stream of families during the working years. Universal or Whole Life Insurance also offers a lump sum payout to dependents should the policy holder die during the period of the policy; but the policy is designed accumulate higher premiums early and build cash value to offset future higher cost of insurance, keeping the policy in force for the lifetime of the insured. Life Insurance is also seen as an important estate planning tool to pass assets on with minimal to no taxation to one’s beneficiaries.
Why do my insurance rates increase even though I’ve had no claims?
Your rates are affected by the overall claims expenses incurred by your insurance company.
If your rates have gone up, chances are your insurance company has paid more claims than they were expecting and they have to pass on the additional expense to all of their policyholders. You may need to switch to an insurance company that’s had better overall claims experience to get a better rate.
Are the proceeds of life insurance policy taxable?
Generally they aren’t subject to income taxes. However, they may be subject to estate taxes such as inheritance tax.
How can different insurance companies claim to save me hundreds of dollars by switching to them?
What they say in the advertisements is that “people who switched” from XYZ Insurance to them saved hundreds of dollars. However, people probably wouldn’t have switched if they weren’t going to save money. Those that didn’t save and switch weren’t included in this limited sample of people they are referring to….possible only very few people actually saved that much money.
How much liability insurance should I carry?
Liability Insurance protects you against civil claims made by others against you for injury or damage to property for which you may be legally liable. The liability limit that you should carry depends on several factors.
A liability claim can result in a civil judgment against you for the amount of damages claimed.
Your liability limits should be sufficient to protect all of your current assets and future income against such claims. In other words, is the available insurance money (your liability limit) sufficient or will a plaintiff go after your property, your savings, your investments, and potentially your future income because the insurance limits on your policy are relatively small in comparison. Also, one should consider the potential severity of possible injury claims such as from the use of their automobile or if they have a swimming pool other potentially serious hazards.
What does my credit score have to do with my insurance rates?
Your credit score is a significant factor in setting your rate level for most kinds of insurance and is used by almost all insurance companies. It is used as a predictor of future behavior. Insurance companies have concluded that groups of people who take financial risks such as running high credit balances are more likely to take more risks in other aspects of their lives which can result in more insurance claim activity for this group.
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