FREQUENTLY ASKED INSURANCE QUESTIONS

Auto | Business | General | Homeowners | Life

 Auto Insurance FAQs:

  • Pennsylvania requires all drivers carry limits of $15,000/30,000/5,000.

    Bodily Injury Liability: $15,000 per person

    Bodily Injury Liability: $30,000 per accident

    Property Damage Liability: $5,000

    We recommend that you carry more than the minimum limits to fully protect your financial well-being during an accident.

  • When an individual gets their permit to drive, they are considered a permitted driver until they receive their license. They are covered by your auto insurance policy if they reside in your home and the parent or guardian is in the passenger seat.

    You must contact your insurance agent to add a permitted driver to the policy. There is no additional premium until he/she gets their license.

  • What happens if someone else is at fault in an accident that involves you and they do not have enough insurance to cover your damages and medical payments? This coverage also comes into play if you are the victim of a hit and run. It is a very affordable option to cover you if the other driver is unable to.

  • One easy way to remember the difference between comprehensive and collision coverage is that comprehensive covers “acts of God.” This would include animals, glass breakage, trees falling on your vehicle, etc. Collision is easily defined as colliding with anything other than an animal such as another vehicle, a house or building, a tree, or a mailbox.

  • It is commonly perceived that car insurance follows the driver. This is actually not the case. If you give someone else permission to drive your car, known as permissive use, your policy will cover the accident should there be one. Keep in mind, however, that this can result in you having to pay a deductible and possibly having your insurance premiums rise if they are at fault.

  • It is essential to check your own policy, but usually, your insurance policy will extend to cover a rental car. This includes your liability which covers bodily injury and property damage, as well as comprehensive and collision if those are elected on your policy. Be sure to make sure these coverages are on your policy before you rent a car. Carefully read any other “insurance” offers from credit card companies and the rental car company before agreeing to purchase.

  • You absolutely want to insure your classic car on a special policy. Due to the value of a lot of these types of cars, your normal personal auto policy will not be able to provide the coverage necessary to replace such a vehicle. Classic or antique auto policies are designed to provide the extra coverage needed for some of these higher valued vehicles.

  • Have you ever wondered if you hit your own vehicle how it would be handled? It is covered and would be considered a collision claim and would be subject to your deductible. Rest assured that regardless of what you hit, collision coverage is there to pay to fix your vehicle.

  • If your teenager is living under your roof and driving your car then he/she must be added to your existing insurance policy. If your teenager owns his/her own vehicle then he/she has the option of having his/her own auto policy. However, adding your teenage driver to your policy remains the least expensive option.

  • First Party Benefits are paid to you if you or your family members are in an accident, whether at fault or not. In Pennsylvania, First Party Benefits Coverage includes a minimum of $5,000.

  • The word tort can be confusing, so it is essential first to understand what it is. Any civil wrongdoing, such as negligence that causes harm towards another person, can result in legal liability which is known as a tort. Understand that this can mean more than just bodily injury; it can include mental and emotional injury as well. So any type of liability insurance that helps to cover these types of losses related to tort is considered tort protection.

Business Insurance FAQs:

  • In the course of owning a business, customers may come to your location, or you may go to them. Both of these things open you up to a possible lawsuit should bodily injury, or property damage, occurs. Liability will cover you for these things, should someone get hurt on your premises, or you damage someone else’s property.

  • The cost of business insurance varies for Pennsylvania business owners. To make sure you don't pay too much, request multiple insurance quotes from various carriers so you can compare coverages in addition to premium costs.

    The easiest way to request multiple quotes is to work with an independent insurance agent that represents more than one company.

  • Every Pennsylvania business has different needs in regards to staffing, building size, policies, and insurance is no different. We recommend that every business consider general liability, commercial property, and worker's compensation to start.

    If you offer professional advice including financial, accounting, or medical, it is also important to purchase professional liability insurance.

  • Pennsylvania law requires all businesses with at least one employee carry worker's compensation insurance that could be injured when performing activities for the business.

  • Regardless of the size, every business needs business income insurance. If there is a covered claim and you are unable to operate, you will still have your regular operating expenses. The mortgage company or employees will not care if the business is bringing in income. You want to be able to stay afloat while your business is being restored.

  • Care, custody, & control refers to tangible property that is not yours (the insured’s) but is in your possession. For example, for a garage owner, it would mean a customer’s vehicle, or for a farmer, it could be boarded horses owned by others.

  • When you run a business out of your home, it is important to check your homeowner’s policy. Most of the time anything that is business-related is excluded, including property that is used in the course of your business. This would include things like a computer, office furniture, and any stock you may have in your possession. So if you, unfortunately, had a fire, none of those items would be replaced. It is important to have separate business owner’s policy to provide coverage for your business's personal property.

  • Most personal auto insurance policies have an exclusion for business-related activities, so you do need a business auto policy. Plus, if you are doing business and are at fault in an accident, your business could be drawn into a lawsuit. Since a personal auto policy cannot cover a business; you will need the business auto insurance policy to protect your assets.

  • Regardless of the type of business, you are operating, the risk of being sued in the United States is probably higher than you think. If you have multiple entities, they should all be listed on your insurance policy in the event of a claim. Even if you are not found guilty, the expense of defense can shut down your business if you don’t have any coverage. Plus, as a member of the LLC, that leaves you exposed as well.

  • The IRS allows certain insurance premiums to be deducted as a business expense. For a full list, check out the IRS website. Some common insurance premiums that you can deduct include Commercial Property, Liability, Workers Compensation, and in addition to that if you have your Workers Compensation through a state fund, those payments can be deducted as well.

  • If you work from home for a company that provides you direct selling opportunities it may be a good idea to look into direct sellers insurance, especially if you have an inventory of significant value. Your current home insurance policy might not cover what you think in terms of your business inventory. It’s a good idea to check with your renters or homeowners insurance agent to see what is covered.

General Insurance FAQs:

  • A named insured is any individual or entity that is listed as an insured by name on the insurance policy. They are the primary party listed on the policy and in addition to having coverage and the ability to make changes, they are also responsible for paying the insurance premiums.

  • Named insureds and additional named insureds can make requests or changes to an insurance policy.

    Additional insureds are listed on the policy in certain cases but have no authority to make changes to the policy.

  • Mortgage companies and lienholders often ask to be listed as additional insureds on homeowners or auto insurance policies. This protects them in the event the home or vehicle is damaged by providing payment for the amount still owed on the loan.

  • It is a good idea to have both your auto and homeowner’s insurance with the same agency. This is the best way to avoid gaps in coverage. Having all of your insurance policies with one agent is beneficial because they will get to know you and your unique situation. It is helpful to know someone’s situation when an agent has to recommend the best coverages. Plus, you may even get a discount for having both policies with one agency.

  • In many cases, you will hear the terms replacement cost (the cost to replace something with like kind and quality) and actual cash value. In simple terms, actual cash value is replacement cost minus depreciation. For example, if you purchased a 50” television for $1,200 5 years ago, and it is damaged in a fire, the insurance company would take into account that it is 5 years old when calculating the claim payout if you have actual cash value.

  • A certificate of insurance is a document that provides evidence of the types of insurance policies, including coverages and limits, purchased by you. This is important to have if you are providing a service that could result in large losses to your clientele should something go wrong. No matter what type of business you are working with, having a certificate of insurance gives both you and your clients peace of mind.

  • A deductible is an amount of money, sometimes $500 or $1,000 depending on your policy, that is your responsibility at the time of a claim. It is the insurance company’s way to ensure that any small claims will be paid by you rather than submitted. Usually, the company will simply deduct this amount from your claim check once it is determined to be a covered loss.

  • You should review all of your insurance policies at least once a year. If you have any major life changes (births, deaths, relocation) you should review the relevant policies immediately as this can have a significant impact on your policies.

Homeowners Insurance FAQs:

  • Personal liability insurance protects you and your family from bodily injury and property damage caused by you and your residents. If someone should slip and fall, your child throws a baseball through a window, or you accidentally hit someone’s car with a golf ball, all of these things would be covered. It even includes medical payments for anyone who is accidentally injured on your property.

  • A standard homeowner’s policy will cover your jewelry up to a specified sub-limit, usually between $2,000 and $5,000. If you have some pieces that are valued high or have sentimental value, it may be best to cover them on an inland marine policy. You can schedule, or list, each piece of jewelry on this type of policy along with a value determined by an appraisal or receipt.

  • When you purchase insurance, the company will do what is called a replacement cost estimator. They will input the characteristics of the home such as year built, square footage, flooring, etc. to determine what the amount would be to completely replace your home if it should be completely lost. Please note that the replacement cost number will most likely be different from market value.

  • Your homeowner’s insurance policy will exclude boats and dirt bikes; however, these can be covered under a separate policy and it is usually very affordable. A watercraft policy will cover your boat and liability. Be sure to pay close attention to the property covered on the watercraft policy as this can vary greatly from company to company. A dirt pike policy will cover your liability and damage to the dirt bike if you so choose to include that. It will have similar coverages to an auto policy and is usually less expensive than a motorcycle policy.

  • Purchasing flood insurance or not is a personal decision. Be aware that flood is specifically excluded from a homeowner’s policy. Even if you are not in a flood zone, it may be something to consider so that if you are devastated by a flood, you will be able to easily repair or replace your home.

  • Renters insurance is a must-have for anyone who rents an apartment or home. Not only do you want to provide coverage for your stuff inside the apartment, but you should have liability coverage as well. If someone gets hurt on the premises you could be sued, even though you don’t own it. Another important coverage provided is loss of use, which will pay for you to stay somewhere else should you be displaced due to a covered incident.

  • Your homeowner’s insurance policy will provide coverage for theft, regardless of whether your garage is opened or closed. It is a good idea to keep it closed when you are not around to avoid this happening. Keep in mind, if your vehicle is stolen out of the garage, this would be covered under your auto insurance policy, not your homeowners.

  • Homeowner’s insurance covers the cost to repair a roof from a direct physical loss. A basic homeowner’s policy would include fire, wind, hail, lightning, and vandalism. Be sure to know what kind of policy you have so that you know what perils are covered by your policy. Your insurance policy will NOT cover roof repairs for normal wear and tear.

  • Your personal belongings, including electronics, are covered under your homeowner’s insurance policy. The weather-related perils that are covered on a standard policy include wind, lightning, hail, and the weight of ice, snow, or sleet. So, if your electronics are damaged by one of these, your claim will most likely be covered. Be sure to read your policy to be sure of all inclusions and exclusions.

  • Once you make sure everyone is safely out of the house and the danger has passed, you can turn to your homeowner’s insurance policy to help with damage. Call your insurance carrier and file a claim. They will walk you through the process from there.

Life Insurance FAQs:

  • Each situation is different when it comes to how much life insurance you may need. At the very least, an easy way to calculate a number is to multiply your income by ten. If you want to go even more in-depth, add up all your debt, and then add extra for college and burial expenses. Just don’t forget to take out your assets when doing the calculations.

  • Universal life insurance is a permanent life insurance policy that accumulates cash value. Unlike whole life insurance, you can adjust the premiums you pay should you need to. This will, of course, affect the cash value accumulations. It can be a great investment option.

  • Technically, the best age to begin a life insurance policy is the day you are born. A Whole Life Policy can be purchased for a child and then be transferred to them when they turn 18. The cash value grows the longer the policy is in place and can end up being used as a down payment on a house or even held longer to supplement retirement income.

  • There are three types of life insurance: Term, Universal, and Whole. Term life insurance provides coverage for a specific number of years. Universal and Whole provide permanent life insurance that accrues a cash value. As you pay your premium, part of it goes toward cash value and is invested for you by your policyholder (usually a 3.5% to 5% yearly return). This cash value can be dispersed to you while you are still living (taxes apply upon withdrawal of funds).

    A 401k is an employer-sponsored account that helps people save for retirement. This type of account cannot be withdrawn from until retirement. You may make contributions to this account above the minimum withheld by your employer (usually around 3%) and you may get free money with a contributions match offered by some employers. You also do not pay taxes on the amount you pay into your 401k. That happens when the money is disbursed to you upon your retirement.