FAQS

That depends. If you own a car, for example, you need auto insurance because it's required by law. Besides protecting a valuable possession that would be expensive to replace, auto insurance includes liability insurance for the damage you cause (bodily injury or damage to others' property), should an accident be your fault. If you own a home or rent an apartment, you need homeowners or renters insurance to protect your personal property and protect yourself from liability should someone be hurt in an accident on your property. Your home and its contents are probably your most important possessions, which would be difficult and expensive to replace if you didn't have insurance. The kind of insurance you need depends on your personal circumstances. If you own a business, even a home-based business, business insurance is something you should seriously consider. If you own an RV, boat, or motorcycle, insurance for these possessions is also recommended and may even be required. Of course, most everyone needs life and health insurance. And many people make plans for retirement and can benefit from special financial products that enable them to reach those goals as well. In short, the kind of insurance you need depends on what you want to protect. There are all kinds of insurance to cover many different needs.

A deductible is the portion of out-of-pocket expense you must pay before your insurance policy takes over. Thus, the answer to this question depends on how much you can afford. If your budget and personal financial situation allows, you might opt for a higher deductible, which usually translates into lower premiums.

For all practical purposes, there is nothing to be gained by bypassing an insurance agent. Your agent is not just an order taker, but a licensed professional and an experienced advisor. Most people simply do not know enough about the insurance process, the options available, the various considerations and issues involved, and the details which go into making an informed insurance buying decision.

How insurance companies determine premiums is a complicated process that involves many factors -- risk, loss and claims experience, insurance and credit scoring, types of insurance, actuarial data, etc. While insurance companies try to be competitive with other companies, each insurance company makes decisions based on their experience, statistical information, and business objectives. Insurance companies maintain staffs of trained experts, called underwriters, whose primary job is to evaluate the amount of risk the company will assume by issuing an insurance policy for a particular piece of property or a person's life or health. If one particular company has experienced a higher rate of loss on a particular policy, its premiums will likely be higher than another company whose loss rate is lower.

To say that premiums "are not too high" is a relative term. Keep in mind that premiums or price are not the only factors to consider when buying insurance. Similar coverage from several companies will, in all likelihood, vary because of the factors noted above. When comparing insurance policies and premiums, rarely, if ever, will you be able to make a true "apples to apples" comparison because of the many variables that go into making a particular policy. For these reasons, shopping for insurance based on price alone (especially when shopping on the Internet) can be very risky. While one company's premiums may be lower, the policy may not contain all the features and coverage you want or need or may include exclusions for some coverage. The assistance and advice offered by a licensed insurance agent can be quite valuable.

For many people, insurance is a bewildering topic. Most people know that they need insurance, but don't understand much about it. Furthermore, the law requires some insurance, such as auto insurance and mandatory workers comp. Other kinds of insurance make good sense because it can help protect and replace important and valuable assets. While many insurance companies offer similar products and coverage, each company is unique with respect their own options, pricing, and many other variables. An independent agent's job is know what those variables and options might be, advise you, the insurance customer, and help you get the best coverage for your specific need and budget.

An insurance company whose rates are approved by a state; its policy holders are protected by a state’s Guarantee Fund.

A "non-admitted" carrier is NOT subject to your state regulations, and is not protected by the state’s Guarantee Fund.

A.M. Best issues financial strength ratings measuring insurance companies' ability to pay claims. It also rates financial instruments issued by insurance companies, such as bonds, notes, and securitization products. For more information visit: www.ambest.com.

Demotech, Inc is an actuarial consulting and financial analysis firm providing a wide range of services including pricing analysis, state filings assistance, Financial Stability Ratings and support for other required regulatory reporting. For more information visit: www.demotech.com.

	Financial Stability of the Carrier, this will show the claims paying ability.
	Admitted status, this is important to look at to see if the state guarantee fund will come into play.
	Length of time in business.
	Do they do business in one state only? If this is the case they may not have claims adjusters to pull in from other states to help settle claims during a catastrophe. They would most likely use independent adjusters to settle claims.
	Coverage exclusions, there are many exclusions that you need to be aware of in certain policies. Some policies may exclude animal liability coverage, wind, sinkhole coverage, replacement cost on your contents, etc. Make sure you ask your Agent about the coverage you are getting on the policy.

There are a number of things you can do to lower the cost of your homeowners insurance. The best thing to do to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount if your home has a security system or if you have fortified your home against wind damage. Be sure to ask your agent or company about discounts any that you may qualify for. Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your All Other Peril deductible from $500 to $2500 will lower your premium, sometimes by as much as five percent. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible.

Insurance carriers require you to insure your home for the total amount it would cost to rebuild in the case of a total loss not including any value for the land. In most cases a replacement cost evaluation is completed to determine the rebuild cost. It is important to know the features of your home so you can tell your insurance agent to include them in the replacement cost evaluation. For example, if you have custom cabinets and granite countertops that is important for your agent to know and include in the valuation.

Homeowners policies have limitations for jewelry, watch's, furs, fine arts, paintings, collectables. If you have these items you have a need for a separate special policy for these items. This policy is called a Personal Articles Floater Policy or Inland Marine Policy.

NO. Flood is excluded under most property policies. According to FEMA 25% of floods that have occurred have done so in areas where flood is not REQUIRED by a mortgage company (a preferred flood zone). For more information visit: http://www.fema.gov/hazard/flood/index.shtm.