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Q: What kinds of questions should I be expected to answer when I am applying for an insurance policy? Why do insurers need so much information? A: When applying for an insurance policy, you will be asked a number of questions. For example, the agent might ask you your name, age, gender, address, etc. In addition, you may be asked a number of other questions which will be used to determine how likely you are to make a claim. Depending on the type of insurance policy you are seeking you may be asked additional questions about the structure you want to insure, the vehicle you want to insure, and/or the types and limits of coverage you are seeking. <<Return to top Q: What are the advantages to using an agent to purchase insurance? A: By using an agent to purchase insurance, the policyholder receives more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. A local, independent agent is able to deliver quality insurance with competitive pricing and local personalized service. <<Return to top Q: What is the difference between cancellation and nonrenewal of a policy? A: There is a big difference between an insurance company canceling a policy and choosing not to renew it. Florida law states an insurance company cannot cancel a policy that has been in force after a certain number of days (depending on the type of policy), except when you fail to pay the premium or you have committed fraud or made serious misrepresentations on your application. Nonrenewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days’ notice (depending on the type of policy) and explain the reason for not renewing the policy before it nonrenews your policy. The underwriting company may have decided to drop that particular line of insurance or to write fewer policies where you live, so the nonrenewal decision may not be because of something you did. On the other hand, if you did do something that raised the underwriting company’s risk the premium may increase or you may not have your policy renewed. <<Return to top Business FAQs Q: What does a businessowners policy (BOP) cover? A: Underwriting companies that provide business insurance usually offer policies that combine protection from all major property and liability risks in one package, i.e., one policy. The companies may also provide the coverage separately. One package policy purchased by small and mid-sized businesses is the businessowners policy (BOP). Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face. BOPs may include property insurance for buildings and contents owned by the company, business interruption insurance, extra expense coverage, liability protection and/or other coverages depending on the type of business. Policies may vary so it is important to discuss all coverage options available to your business before you purchase a policy. BOPs do NOT provide coverage for professional liability, auto insurance, worker’s compensation or health and disability insurance. Separate insurance policies cover professional services, vehicles and your employees. Q: Do I need professional liability insurance? A: Professionals that operate their own businesses need professional liability insurance in addition to a businessowners policy. Professional liability insurance protects against financial losses from lawsuits filed against the businessowners by their clients. Professionals are expected to have extensive technical knowledge or training in their particular area of expertise. They are also expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they cause to another person or business. When liability is limited to acts of negligence, professional liability insurance may be called “errors and omissions” liability insurance. Professional liability insurance is NOT provided under homeowners endorsements, in-home business policies or businessowners policies (BOPs). <<Return to top Homeowners FAQs Q: What are some practical things I can do to lower the cost of my homeowners insurance? A: There are a number of things you can do to lower the cost of your homeowners insurance. The easiest thing to do is get a comprehensive review of your policy and needs from your local agent. It is not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage. Another way 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 when you place both your automobile and homeowners insurance with them. Other times, insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask about any discounts for which you may qualify. Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 or $1,000 will lower your premium, sometimes by as much as five or ten percent. Be sure to ask what deductible options are available. <<Return to top Q: What does homeowners insurance cover? A: The typical homeowners policy has two main sections: Section I covers the property of the insured and Section II provides personal liability coverage for the insured. Almost anyone who owns or leases property has a need for this type of insurance. Usually, homeowners insurance is required by the lender to obtain a mortgage. <<Return to top Q: What is the difference between "actual cash value" and "replacement cost"? A: Covered losses under a homeowners policy can be paid on either an “actual cash value” basis or on a “replacement cost” basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices. <<Return to top Q: What factors should I consider when purchasing homeowners insurance? A: There are a number of factors you should consider when purchasing any product or service, and insurance is no different. A few of the things you should consider when you purchase homeowners insurance are as follows: Determine the amount and type of insurance that you need. The coverage limit of your house should equal 100% of its replacement cost. If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home -- you'll have to pay the rest out of your own pocket. Also, decide if the personal property and personal liability limits are adequate for your needs. Determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement, an earthquake endorsement or a jewelry endorsement? After you have decided on the coverage you want in your homeowners insurance policy, consult your agent. Your agent will be able to help you determine if there are any gaps in coverage you might not have been aware of, explain the details of the policy's exclusions and limitations as well as recommend an insurance company that will best meet your needs and expectations. <<Return to top Q: Where and when is my personal property covered on my homeowners policy? A: Personal property (except property that is specifically excluded) is covered anywhere in the world. For example, suppose that while traveling, you purchased a dresser and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit -- even though the dresser has never been in your home before. <<Return to top Renters FAQs Q: Why should I want to buy renters insurance? A: If you live in an apartment or a rented house, renters insurance provides important coverage for both you and your possessions. A standard renters policy protects your personal property in many cases of theft or damage and may pay for temporary living expenses if your rental is damaged. It can also shield you from personal liability. Anyone who leases a house or apartment should consider this type of coverage. <<Return to top Q: How does a renters policy protect my personal property? A: A renters policy provides named perils coverage. This means that the policy only pays when your property is damaged or destroyed by any of the ways specifically described in the policy. These usually, but not in all policies, include: · Fire or lightning · Windstorm or hail · Explosions · Riots · Aircraft · Vehicles · Smoke · Vandalism or malicious mischief · Theft · Falling objects · Weight of ice, snow, or sleet · Accidental discharge or overflow of water or steam · Freezing · Sudden and accidental damage from artificially generated electrical current · Volcanic eruptions (but this doesn't include earthquake or tremors) Renters coverage applies to your personal property no matter where you are in the world. This means you're covered when you are on vacation as well as at home. <<Return to top Q: What if I share my apartment with a roommate? Do we both need to have renters insurance? A: Standard renter's policies cover only you and relatives that live with you. If your roommate is not a relative, each of you will need your own renter's policy to cover your own property and to provide you liability coverage for your own actions. <<Return to top Wind FAQs Q: Why do I need a “wind only” insurance policy? A: If your home is located in a “high risk” area and/or the “wind pool”, underwriting companies may not provide coverage for a loss or claim due to damage caused by wind in a standard homeowners’ policy. In these instances, you will need a separate “wind only” policy to provide coverage for your home or personal property. In some instances, wind insurance may also be referred to as “hurricane” insurance, although a “wind only” policy provides coverage for wind damage even when not caused by a hurricane. <<Return to top Q: What can I do to lower the cost of my wind insurance? A: One way to lower the cost of your wind insurance is to increase your deductibles. Be sure to ask what deductible options are available to you. Another way to lower the cost of your wind insurance is to look for any discounts or credits that you may qualify for. For example, an underwriting company may offer a discount or credit when you have protective devices, FBC equivalent roof covering, certain roof-wall connections, certain roof-deck attachments, impact resistant coverings (shutters), impact resistant doors, and/or impact resistant glazing (windows, skylights, sliding glass doors, and windows). Be sure to ask about any discounts for which you may qualify. <<Return to top Flood FAQs Q: What causes flooding? A: Some of the causes of flooding in our area are as defined below: · Storm Surge: Storm surge is a large dome of water, often 50 or more miles wide, that sweeps across the coastline near where a hurricane makes landfall. Storm surge is the greatest threat to property and life along the effected coast. · Flash Flooding: Intense rainfall in a brief period leaves more water than the ground can absorb. When this happens, flash flooding can occur. Flash floods occur with little or no warning, move at very fast speeds and can reach a peak in a few minutes. They can roll rocks, tear out trees and destroy buildings and bridges. · Urban Development: New construction and paving alter land's ability to drain properly. As a result, run-off can increase 2 to 6 times greater run-off than would occur on natural terrain. <<Return to top Q: What is considered a flood? A: The National Flood Insurance Program (NFIP) legally defines a flood as a general and temporary condition of partial or complete inundation of normally dry land by: · The overflow of inland or tidal waters. · The unusual and rapid accumulation or runoff of surface waters from any source. · Mudslides (i.e., mudflows) which are proximately caused by flooding and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, including your premises, as when earth is carried by a current of water and deposited along the path of the current. · The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in a flood. · To qualify as a general and temporary condition, the flood must affect either two or more adjacent properties or two or more acres of land and have a distinct beginning point and ending point. Also, to qualify, the flood waters can only be surface water that covers land that is normally dry. <<Return to top Q: Will my homeowners policy cover flood damage? A: A homeowners policy may cover fire, tornado or even earthquake damage but seldom does it cover damage from flooding. <<Return to top Q: What are my chances of flooding? A: If you live in a high-risk area, you have a 1 in 4 chance of flooding during the life of a typical 30-year mortgage. You are also 5 times more likely to experience flooding than fire. You don't have to live in a high-risk zone to be a victim. Almost 25% of all flood claims come from low-to-moderate risk areas. <<Return to top Q: What flood zone am I in? A: There are three major categories of flood zones. However, A & V zones have several subcategories. To get the specifics on what flood zone you live in, contact your local planning and/or zoning department. The three major categories of flood zones are as follows: V zones are usually located near the ocean. This makes them particularly vulnerable to storm surges (flooding caused by hurricanes). V Zones represent the areas at highest risk, and premiums in this zone are the most expensive. A zones are usually located near a river, lake or stream - making them the second highest risk zone. B, C, X, and A99 zones are less prone to flooding. Remember that almost 25% of all flood claims come from these "low-risk" zones. <<Return to top Q: Can I wait for a flood warning to buy a flood policy? A: Delaying the purchase of flood insurance is not recommended as there is normally a 30-day waiting period on most new flood policies. However, there is usually no waiting period for flood insurance when it is purchased in connection with a new loan, or when increasing, renewing, or extending a loan. <<Return to top Q: What can a flood policy cover? A: Usually, but not in all policies, a flood policy covers: · Flood debris cleanup · Structural damage (walls, stairways, ceilings, floors) · Household appliances damaged by floodwater (refrigerators, air conditioners, heat pumps, circuit breaker boxes, washers/dryers) · Wall-to-wall carpeting, tile and other flooring surfaces Exactly what will be covered by your flood policy will be determined by your individual policy at the time it is written. <<Return to top Q: What can “contents” coverage include? A: A good rule of thumb is if you turn your home upside down and an item falls out, then the item is usually, but not in all policies, considered “contents”, also known as personal property. “Contents” coverage usually, but not in all policies, covers the following: · Furniture (beds, couches, dressers, entertainment centers, tables) · Collectibles, artwork, knickknacks · Clothing, shoes, accessories, jewelry <<Return to top Q: Why is my neighbor's rate higher or lower than mine? A: A lot of factors determine flood insurance rates. Some of these factors include: · Flood zone · Amount of coverage · Location of structure · Age and design of structure · Building occupancy · Structure elevation if located in a Special Flood Hazard Area When calculating a rate these factors, and other information, are taken into consideration. Therefore, because your flood policy is written based upon your structure, its location and your insurability, your neighbor’s rate may be higher or lower than yours. <<Return to top Q: When is a standard flood policy not enough? A: If it would cost more than $250,000 to replace or repair your home, a standard flood policy is not enough. Let's assume it would cost $750,000 to rebuild your home. If your home were to be totally destroyed by a flood that leaves $500,000 not covered by a standard flood policy. In the event of total loss due to flood, your policy will only pay the policy limits – up to $250,000. What do you do to cover the additional $500,000 not covered by a standard flood policy? Simple - you purchase additional coverage. Excess Flood Insurance can increase your standard single-family coverage by up to an additional $500,000 - covering up to $750,000 total. If you have a business insured, you could extend your structure coverage from $500,000 up to $1 million. <<Return to top Auto FAQs Q: What kinds of questions should I be expected to answer when I am applying for an auto policy? A: When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, it will want to know about the person's previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured. Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than will a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you. In addition to your age, gender and driving experience, information about the vehicle you drive, and how you drive it, is also needed to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact; and, someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends. <<Return to top Q: What other factors can affect the cost of my automobile insurance? A: A number of factors can affect the cost of your automobile insurance -- some of which you can control and some that are beyond your control. The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost you. Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people. <<Return to top Q: What is the difference between “collision” physical damage coverage and “comprehensive” physical damage coverage? A: Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage. Comprehensive provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm will be covered under your comprehensive coverage. <<Return to top Watercraft FAQs Q: How much does boat insurance cost? A: Like all types of insurance, your insurance cost will depend on a variety of factors, including, but not limited to, your boat's location, where you use it, the age and experience of the primary operators, the boat's size, type, age, power type, and other factors related to the boat. <<Return to top Q: How can I save money on my boat insurance? A: Some additional factors that influence the cost of boat insurance are: · Boating safety education. You may receive a discount from some underwriting companies if you have completed a safety course approved and/or given by the U.S. Coast Guard, Power Squadron, or National Association of State Boating Law Administrators (NASBLA). · The amount of the deductible you select. The higher your deductible the lower your premium. · You may receive a discount on your boat insurance premium if you have your automobile and/or homeowners insurance with the same company. · If your boat is equipped with such items as a VHF ship to shore radio, depth finder, vapor detection system, a built-in CO2 fire extinguishing system, a burglar alarm, or operable radar, LORAN or Satellite Navigation systems you may qualify for a Protective Devices discount with some underwriting companies. <<Return to top Personal Umbrella FAQs Q: What is a personal umbrella liability policy? A: A personal umbrella liability policy is designed to increase your liability protection. This single policy acts as an "umbrella" over all of your other personal liability policies -- home, auto, boat, RV, etc. -- so you have a higher personal liability limit than what would otherwise be available. In certain circumstances, an umbrella policy may provide personal liability coverage that is otherwise excluded from your other policies. For example, an umbrella policy provides coverage anywhere in the world, whereas your auto policy usually provides coverage in the United States and Canada only. <<Return to top Q: How do I know if I need a personal umbrella liability policy? A: It used to be that the only people who needed personal umbrella liability policies were wealthy individuals who had sizable amounts of personal assets that would be at risk in a lawsuit. However, in our very litigious society, even individuals with modest incomes and assets are often subjects of large lawsuits. Since they are even less able than a wealthy individual to pay large damage awards, they recognize the need to have coverage limits greater than what can be obtained from their homeowner, auto or boat policies. As monetary damage awards from lawsuits continue to increase, a personal umbrella policy will provide you with an extra layer of liability coverage in the event that your auto, home or boat policies’ internal liability limits are exhausted. <<Return to top Life FAQs Q: How much life insurance should an individual own? A: "Rule of thumb" suggests an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account when determining the right amount of life insurance for you and your family. Important factors to consider include:
<<Return to top 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. This should be done before contemplating the purchase of life insurance on children or on a non-wage-earning spouse. Life insurance on a non-wage-earning spouse is often recommended for the purpose of paying for household services lost due to this individual's death. In a dual-earning household, it is important to protect the income earning capacity of both spouses. <<Return to top |
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