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Frequently Asked Questions
Why do I need to buy insurance?
- Protects your assets against attachment as a result of a court award.
- Provides for cost of defense when you are sued.
- Allows you to purchase such high value items as a car or a home by insuring the collateral on behalf of the financial institution that lent you the money.
- Provides financial security for your family in the event of your death.
- Provides for the health care of you and your family through systematic payments.
- Allows you to save for retirement while deferring interest payments to a time when your income is lower, thus reducing your tax payments.
- Allows you to remain financially solvent when you're ill and can't work.
- What factors affect the insurance premiums I pay?
- Claims activity including such costs as medical care, auto body repair, construction, legal defense, jury awards, claims adjustment, and insurance fraud.
- Overhead including rent, utilities, employee salaries and benefits, office supplies, equipment, and furniture.
- Investment income.
AUTO INSURANCE and BOAT INSURANCE
How does where I live affect my premium?
Where you keep your car directly affects your chances of having an accident or becoming a victim of theft or vandalism. The likelihood of encountering these problems increases in larger, more densely populated cities, while such incidents remain relatively low in rural areas.
Additionally, the time and efficiency of police response and law enforcement, local road and traffic conditions, and the quality of local medical services can affect regional insurance rates. Some insurers even factor in the litigation rates in a given area (how many lawsuits are filed, go to trial, out of court settlements, and their amounts).
Do all states require some kind of Liability insurance?
No. Although not every state requires Auto insurance, some have "financial responsibility" laws mandating all drivers to be able to pay for any damage or injury they might cause. However, Liability insurance is still the best way for you to meet your state's financial responsibility requirements.
By law, all states offer UM and UIM policies, including no-fault states. In fact, some states require all motorists to carry this coverage in order to gain protection from inadequate insurance coverage of other drivers.
How do I keep my insurance company from canceling my policy?
Besides maintaining a clean driving record, consider investing in special safety and security features for your car. If you've been in an accident, consider taking a defensive driving course.
What happens when I loan my car to someone? Is that person covered by my policy? Am I still covered?
Yes. Liability and coverage for Physical Damage (i.e. Comprehensive and Collision) always follow your car. Plus, if the driver of your car is insured, his/her policy will also be available to cover the cost of damages and injuries.
The same rules apply when you borrow someone else's vehicle; your own insurance follows you no matter whose car you're driving. But the vehicle owner's policy is the key coverage in the event of an accident.
Am I covered for natural disasters or "Acts of God"?
Comprehensive insurance, which covers you for fire and theft, generally covers you against damage by flood, earthquake, hail, and other natural perils, except when your car is overturned (which is technically considered a collision). If you have specific concerns about the safety of your vehicle in natural disasters, contact us for information on catastrophic coverage.
How can I challenge my insurers if they refuse to cover a claim?
Usually, insurers that refuse to cover a claim have a strong legal reason for doing so — even if you disagree. First, contact us if you feel you're being treated unfairly. Your agent is your strongest advocate in insurance matters. But if it's a legal problem, you might have to hire a lawyer.
What can I do to lower my auto premiums?
Be sure to talk to Mallory Agency about all available discounts on car or auto insurance such as: multi-car, renewal, claim-free, student discounts, driver training, defense driver course, anti-lock brakes, air bags, anti-theft devices, and auto/home discounts. Ask how much you can save by increasing your deductibles.
What's "full coverage"?
The term "full coverage" is a term that means the legally required or most commonly requested coverage. The term "full coverage" does not mean that everything is covered no matter what happens. "Full coverage" typically includes Bodily Injury, Property Damage, Uninsured and Underinsured Motorist, Damage to a covered vehicle (also known as Comprehensive and Collision) and any other coverage available such as: rental car towing, road service or additional equipment coverage. Your auto insurance policy declaration page lists the coverage you have selected.
Am I covered if I drive someone else's vehicle?
The coverage provided varies from state to state and you should consult with your Mallory Agency agent for details. Generally, you are covered only for liability to the third parties unless the owner is a resident of your household, or the vehicle is furnished for your regular use. In many states, you are not covered for physical damage to the borrowed vehicle. Any coverage provided is over and above the collectible coverage provided by the owner of the vehicle.
When renting a vehicle, should I buy the insurance coverage offered by the car rental company?
If you have auto insurance protection on your personal vehicles, you do not need to buy extra insurance.
If my car is in the shop and I need to rent a temporary vehicle, is the rental car covered on my auto insurance policy?
Rental car coverage is only for vehicles that have been in an accident, not for cars experiencing mechanical failure.
When my child gets his/her driver's license must I add him/her to my insurance policy?
Yes. All licensed drivers living in the household need to be listed on the auto policy unless they have their own auto insurance elsewhere.
Who is usually covered under an auto insurance liability policy?
An auto insurance liability policy usually covers the following people:
- · Named insured -- the person or people named in the policy, no matter what car they are driving.
- · Spouse -- even if the spouse of the named insured is not named on a policy, liability insurance almost always covers him or her, unless the couple does not live together.
- · Other relative -- anyone living in the household with the named insured related to the insured by blood, marriage or adoption, usually including a legal ward or foster child.
- · Anyone driving the insured vehicle with permission -- someone who steals the car is not covered.
How can I lower my Boat Insurance premiums?
Safety Equipment Discounts are available for safety equipment. If your boat is equipped with any of the following, check with your agent or broker to see if you qualify: GPS, Ship to Shore, VHF, Depth Sounder, Halon system, Fume detector, Alarm System and Loran. If you have taken the Coast Guard certification course or other Boating Safety Courses, check with your current company as to the availability of a discount.
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HOMEOWNERS INSURANCE
What kinds of records are needed to substantiate a homeowner claim?
It is recommended that you keep a booklet detailing the items or a videotape of your personal property. Having a complete inventory record at the time of loss could save you thousands of dollars because no one remembers everything, and unless written down, lost items will go unclaimed. The booklet should be kept in a safe place, preferably not at home. Keep it in a safe deposit box or with your insurance agent. It is also a good idea to retain all bills for major purchases and additions too the structure of your home. These could serve as proof of purchase in the event of a claim and should also be kept in a safe place. Finally, take pictures or videotape of all these items. Lay china and silverware on a table so that the picture will show the number of pieces and other details such as the design. Keep the pictures and all receipts in a safe place.
Who decides on the type of insurance, the mortgage company or me?
You do. The mortgage company collects a set amount from you each month in order to protect their investment. This money is put in escrow and covers your insurance and taxes. However, the policy is still yours and you might select the insurance you feel offers the best coverage at the best rates.
What exactly does a Homeowners policy cover?
"Exact" coverage is impossible to define because there are different policies and about 900 insurance companies writing Property/Casualty business in the United States. However, 80% of Homeowners policies are based on a standard form. All Homeowners policies cover two important areas: Property and Liability.
Property insurance covers your structures and possessions. Personal Liability, as its name implies, means you're legally obligated to pay money to another person for actions caused by you, your family, or your property. That liability extends to medical payments to others for injuries caused by you or your family.
Are floods, earthquakes, and other natural disasters covered?
Most catastrophes are covered. Flood and earthquake damage, however, are not covered by a standard policy and both perils are more common than many people realize. We can advise you on such normally excluded conditions as floods and earthquakes.
Are there exclusions I should know about?
Exclusions listed and defined in your policy might include neglect, intentional loss, "earth movement," general power failure, and even damage caused by war. If you fail to take care of your property (e.g., a leaky roof), you might not be covered. Obviously, if you intend to lose an object or damage your property, there's no coverage.
One other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by governmental bodies that drive up the cost of rebuilding or repairing after a loss occurs might not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher grade or more expensive materials than those you're replacing, the new materials might not be covered fully.
How can I lower my homeowner insurance premiums?
Insurers frequently award lower rates to homeowners who guard against theft, accidents and other losses. And companies may provide discounts to premium for multiple-policy customers (home and auto). Here are some things you can do that generally qualify for lower premiums:
- · Secure your home with dead bolts and window locks.
- · Install a security system with outside signal and connection to local police.
- · Install and maintain smoke detectors.
- · Install a sprinkler system for fire.
- · Install a fire alarm that automatically alerts the local fire department.
- · Stop smoking.
- Keep walks and entrance ways clear of snow and ice.
Purchase your auto and home insurance from the same company.
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RENTERS INSURANCE
How expensive is renters insurance?
Renters insurance is typically available for as little as $100 a year.
Does my landlord's insurance protect me?
Generally, no, the landlord's insurance does not protect the tenant. The property owner's insurance covers the building itself and seldom a tenant's possessions or liability. Clarify this with your landlord before signing a lease.
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BUSINESS INSURANCE
I'm just getting my business started. Do I need insurance immediately?
Yes. Your chance of suffering a loss begins with the first day of business. If you suffer a loss and have no insurance or have improper or insufficient coverage, your insurance agent can do little, if anything, to help you.
Also, many states and local jurisdictions require businesses to have insurance to begin operating. And if you rent space for your business, your landlord probably requires you to obtain adequate insurance.
I don't have any major business assets. Why do I need insurance?
Every business has some property. When you think about it, your business is your property. Just like your home and your car, your business needs to be protected from loss, damage, and liability. In addition, your business is your source of income, so you need protection from the potential loss of that income.
Does insurance coverage vary for different businesses?
It can. Many small businesses opt for package policies that cover the major Property and Liability exposures as well as for a loss of income. A common package policy used by many small businesses is called the Business Owners Policy (BOP).
Generally, BOPs provide more complete coverage at a lower price than separate policies for each type of insurance needed. We can help you decide which policy or policies are right for your business. You can also purchase additional coverage for perils or conditions otherwise excluded (e.g., flood protection) as endorsements to a standard policy or as a separate, second policy called a Difference in Conditions (DIC) policy.
We can advise you of the best policy (or policies) to protect you and your business.
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STUDENT/RECENT GRADUATE INSURANCE
I'm a college student. Am I still covered by my parents' policies?
It depends on the policy and its terms. For example, most Health insurance policies cover insureds' children up to age 18, or up to 22 if the child continues as a full-time student. If you're over 18 and not a full-time student, you'll need your own Health insurance policy.
What kinds of risks do college students face?
College students face many new risks as they head off to school: theft of personal property, auto accidents due to driving long distances, and risks related to attending and giving parties.
How extensive are these risks?
College and university campuses aren't immune to property crime. A 1995 FBI study reported that there were more than 100,000 property crimes on colleges nationwide, including burglary, theft, motor vehicle theft, and arson. Thieves took an average of $1,251 of property per offense that same year.
At least one in 10 college students revealed that they had caused an auto accident in the last two years. One in four had a speeding ticket or other moving violation. These and other offenses contribute to higher Auto insurance premiums for students.
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