1.1 Why should I use an independent agent to purchase insurance?

The independent agent can provide the policyholder with more personal service. As an independent agent, they work with several insurance companies to provide quality insurance with competitive pricing and local service. Direct contact and a local person can be vital when purchasing a product and filing a claim.

1.2 What kind of information is needed to purchase insurance?

The information needed by the insurance company is based on the type of insurance you are applying for. The information is used to determining the type of risk you are or how likely you are to file a claim.
If you are applying for automobile insurance, information about the type of car you drive, previous driving record, accidents, how far you drive, age, gender and credit are all factors in determining a fair price for insurance.
There are many different programs offered by different companies and information like above help determine the program that is right for you.

2.1 When purchasing what should I consider

There are several things you should consider when purchasing automobile insurance that your independent agent will help you with. Here are a few:

• Purchase the amount of liability coverage which makes sense for you.
• Select the optional coverages you want.
• Decide which company to purchase insurance from.
• Don't base your decision solely on price. Other factors like service and claim response are extremely important in selecting the right insurance.

2.2 Does my insurance policy cover a friend if I loan him/her my car?

When you loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy.

2.3 What is collision physical damage coverage?

Collision is the losses you incur when your automobile collides with another vehicle or object like a telephone pole.

2.4 What is comprehensive physical damage coverage?

Comprehensive provides coverage for direct physical damage losses you could incur to your car from something like a hailstorm.

2.5 How can I lower my automobile insurance rates?

There are several things you can do to lower the cost of your automobile insurance. One way is to look for competitive pricing. An independent agent works with many companies and can provide you comparative rates and insure that your are getting the same coverage. Another way to lower the cost is to change your deductible. By raising your deductible you may lower the cost of your automobile insurance almost 10% You must be able to pay the deductible amount in case of a claim. You can also look for discounts that you may be in titled to. Some examples of discounts that may be available are: multiple cars under the same policy, carrying a homeowners policy with the same insurance company, different groups or associations.

3.1 What is it?

Homeowners insurance is a form of personal lines insurance. The typical homeowners policy has two main sections: 1) covers the property of the insured and 2) provides personal liability coverage to the insured.

3.2 What do I need to know when purchasing homeowners insurance?

Get the amount and type of insurance that you need.
Determine the amount of personal property insurance and personal liability coverage that you need.
Select any additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement?

3.3 What is "actual cash value"?

When "actual cash value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property

3.4 What is replacement cost"?

When "replacement cost" coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

3.5 Where and when is my personal property covered?

Coverage C of a homeowners policy provides named perils coverage. This applies to all your personal property (except property that is specifically excluded).

3.6 Should I purchase earthquake coverage?

Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. If you live in an area that is prone to earthquakes, you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.

3.7 Should I purchase flood coverage?

If your properties lies in a flood plain as determined by US Government Flood Maps. Ask your independent agent about these maps.

4.1 Why would I want to buy renters insurance?

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 certain cases of theft or damage and may pay for temporary living expenses if your rental is damaged. (including loss of use). It can also shield you from personal liability. Anyone who leases a house or apartment needs should consider this type of coverage.

4.2 How does a renters policy protect my personal property?

A renters policy provides named perils coverage. This means your property is protected from all the perils that are specifically listed on your policy. These usually 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
• Sudden and accidental tearing apart, cracking, burning, or bulging
• 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.

4.3 Why do some apartment complexes require tenants to have renters insurance?

The owners of these apartment complexes require their tenants to have renters insurance to ensure that they have personal liability coverage. Owners of apartment complexes carry property insurance to protect themselves in the event that the apartment building is damaged. However, if a negligent tenant causes damage, the owner's insurer will sue the responsible tenant for the amount of damage they caused. The owner wants to make sure that the tenant has insurance coverage that will protect him or her in this event.

4.4 What if I share my apartment with a roommate? Do we both need to have renters insurance?

Standard renters policies cover only you and relatives that live with you. If your roommate is not a relative, each of you will need your own renters policy to cover your own property and to provide you liability coverage for your own actions.

5.1 What is fire legal coverage?

Fire legal coverage provides coverage to for you if you rent a business space and are held responsible for fire damages to that rented space. It does not apply to all business risks.

5.2 What is the difference between Replacement Cost (RC) and Actual Cash Value (ACV)?

Replacement Cost is the current cost to replace property. Actual Cash Value is the replacement cost less depreciation.

5.3 What does 80% co-insurance mean?

Insurance carriers require that an insured party pay 80% of the replacement cost in order to collect a partial loss in full. This is the way the insurance company encourages all insureds to adequately insure their property in relation to other insureds.

5.4 Does my policy cover physical damage to a vehicle I rent?

Physical damage coverage on a rental vehicle does not have to be purchased if there is physical damage coverage on the vehicle it is being substituted for.

5.5 Can other people drive my business vehicle?

Other people may drive your vehicle with your permission. It is important that they be listed on your policy if they are regular drivers of the vehicle.

5.6 How does an audit work?

At the end of the policy term, the insurance company will review the policy and either charge or credit the policyholder based upon an audit of actual figures. Examples of estimated auditable items include sales and payroll. Audits can be performed onsite by an auditor or via mail or telephone. A premium is charged for audit estimations.

5.7 Why do I need certificates of insurance from sub-contractors?

An audit may require you to show proof that sub-contractors had their own insurance coverage. The sub-contractors' certificates of insurance will prevent you from being charged for their exposure.

5.8 What is General Liability?

General Liability provides coverage for other individuals who are on your property and/or exposed to your operations.

5.9 What does Products/Completed Operations mean?

Products/Completed Operations refers to the liability coverage for damages caused by your operation or products after the point at which you no longer have control of them.

5.10 What is Business Interruption/Extra Expense coverage?

Business Interruption/Extra Expense coverage provides coverage for income loss and the expense of establishing a temporary site during repairs due to damages related to a fire or compensable loss.

5.11 What is the difference between "Named Insured", "First Named Insured" and "Additional Insured?"

Named Insureds are those listed by name in the relevant block of the policy's declaration page. Although the named insured is commonly one person, partnership, corporation or other entity with insurable interests, multiple named insureds may be included.
First Named Insured is the first "named insured" listed on the policy declarations (front page of the policy). This insured acts as the legal agent for all named insureds in initiating cancellation, requesting policy changes or accepting any return premiums. The first named insured may also be responsible for payment of the premiums.
Additional Insured is an entity to which a policy's coverage is extended. An additional insured must be added to the policy prior to a claim being paid. There must be a tied to relationship between the additional insured and named insured. Being an additional insured on another's policy does not eliminate the need for someone to have his/her own Commercial General Liability policy.

5.12 What is a peril?

A peril is the cause of a possible loss (examples include fires or windstorms).

5.13 What is Business Income Coverage (Time Element)?

Business Income Coverage provides coverage for loss of earnings and ongoing expenses when operations are curtailed or suspended due to property damage resulting from a covered cause of loss.

5.14 Should I purchase special coverage for my computer equipment?

Electronic Data Processing (EDP) equipment can be covered as unscheduled business personal property in "commercial property" forms such as the building and personal property coverage. An EDP equipment floater can provide added benefits. Many EDP floaters cover special perils such as mechanical or electrical breakdown and typically cover property in transit.

5.15 What is co-insurance?

In property insurance, co-insurance is a clause under which the insured shares in losses to the extent that he/she is underinsured at the time of a loss. You may have heard of co-insurance relative to health insurance; this is a provision in which the insured and the insurance company will share covered losses in an agreed proportion.

5.16 What is a third party claim?

A third party claim is a claim brought against you by someone other than an insured.

5.17 Does my General Liability Policy provide coverage if my company is sued for pollution?

This insurance does not apply to bodily injury, property damage, advertising injury or personal injury arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollution.

5.18 Does my General Liability Policy provide Liquor Liability Coverage?

Yes, your General Liability policy provides liquor liability coverage unless you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. These types of businesses need to purchase additional coverage specific to liquor liability coverage.

5.19 What is Fire Legal Liability coverage?

Fire Legal Liability provides coverage against liability for fire damage to premises rented to the named insured or temporarily occupied by the named insured with the owner's permission. Most Commercial General Liability policies provide a separate limit of $50,000 to cover this exposure.

5.20 Will my liability insurance cover me if I am sued in another country?

Most liability policies provide coverage for lawsuits only if they are brought in the United States, its territories and Canada.

5.21 What is the difference between Employee Benefits Liability Coverage and a Fiduciary Bond?

The Employee Benefits Liability policy was designed primarily for a variety of benefit plans to provide coverage for administrative errors and omissions. The Fiduciary Bond policy was designed to cover a fiduciary's ERISA (Employee Retirement Income Security Act) exposures that are caused by a "wrongful act." Fiduciary coverage responds to claims for damages arising out of improper investments as well as plan and employee advice.

5.22 What is an Umbrella Policy?

An umbrella policy provides additional limits of insurance over and above underlying coverages found on a General Liability, Automobile or Workers' Compensation policy. If there is a claim, the underlying policy will pay its limits of liability and the umbrella policy coverage would then be activated.

5.23 When do I need to purchase Workers' Compensation Insurance?

Most states require an employer to purchase workers' compensation insurance as soon as they have employees. These states also consider a corporate entity to have employees from the moment the corporation is formed.
Workers' compensation insurance will provide medical expense and disability income for injured employees as required by the laws of each state. In addition, the insurer will defend any claim proceeding or suit against the insured for benefits payable under the policy.
Premium shall be computed on the basis of the total remuneration (payroll) paid or payable by the insured for services covered by the policy.

5.24 What should be included in the remuneration?

In addition to ordinary wages or salaries, remuneration includes several other types of compensation. These include:

• Bonuses
• Extra pay for overtime work except as provided in Rule V-E
• Pay for holidays, vacations or periods of sickness
• Payment by an employer of amounts otherwise required by law to be paid by employees to statutory insurance or pension plans
• Payment to employees on any basis other than time worked, such as piece work, profit sharing or incentive plans
• Payment or allowance for hand tools or power tools used by hand and provided by employees and used in their work operations for the insured
• The rental value of an apartment or house provided for an employee based on comparable accommodations
• The value of lodging received by employees as part of their pay
• The value of meals received by employees as part of their pay to the extent shown in the insured's records
• The value of store certificates, merchandise, credits or any other substitute for money received by employees as part of their pay.

Items not included are:

• Tips and other gratuities received by employees
• Payments by an employer to group insurance or group pension plans for employees other than payment covered by Rule V-B.2e
• The value of special rewards for individual invention or discovery
• Dismissal or severance payments except for the time worked or accrued vacations

6.1 How much life insurance should an individual own?

Rough "rules of thumb" suggest an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed. Important factors include:

• Income sources (and amounts) other than salary/earnings
• Whether or not the individual is married and, if so, what is the spouse's earning capacity
• The number of individuals who are financially dependent on the insured
• The amount of death benefits payable from Social Security and from an employer sponsored life insurance plan
• Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need), etc.

It is recommended that a person's insurance advisor be contacted for a precise calculation of how much life insurance is needed.

6.2 What about purchasing life insurance on a spouse and on children?

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 before contemplating the purchase of life insurance on children or on a non-wage earning spouse. In a dual-earning household, it is important to protect the income earning capacity of both spouses. Life insurance on a non-wage earning spouse is often recommended for the purpose of paying for household services lost at this individual's death.

6.3 Should term insurance or cash value life insurance be purchased?

Although a difficult question--one whose answer will vary depending on circumstances--several principles should be followed in addressing this issue. It must first be recognized that in any life insurance purchasing decision, there are at least two basic questions that must be answered:
1. "How much life insurance should I buy?" and
2. "What type of life insurance policy should I buy?"
The question contained in (1) involves an "insurance" decision and the question contained in (2) requires a "financial" decision.
The "insurance" question should always be resolved first. For example, the amount of life insurance that you need may be so large that the only way in which this needed amount of insurance can be afforded is through the purchase of term insurance with its lower premium. If your ability (and willingness) to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the "financial" decision--which type of policy to buy. Important factors affecting the "financial" decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk.

6.4 How does mortgage protection term insurance differ from other types of term life insurance?

The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25 or 30 years. Although the face amount decreases over time, the premium is usually level in amount. Further, the premium payment period often is shorter than the maximum period of insurance coverage--for example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.

6.5 Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan?

Yes; the purchase of a new mortgage protection term insurance policy is usually not required by the lender. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured's death.
Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy?
Credit life insurance is frequently more expensive than traditional term life insurance. Further, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advisable due to its relatively high cost.

7.1 What is a personal umbrella liability policy?

The personal umbrella liability policy is an insurance contract designed to accomplish two goals.
First, it increases the liability protection beyond what the policy owner already has in his or her homeowners and automobile insurance policies.
Second, the personal umbrella policy is designed to fill in the gaps in a policy owner's liability coverage since several types of liability exposures exist that
are not covered by automobile and homeowners policies. Together with homeowners and automobile insurance policies, broad personal liability protection is attained through the purchase of a personal umbrella policy.

7.2 How do I know if I need a personal umbrella liability policy?

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, many people are realizing that they have a need for more liability insurance than what is provided under their homeowners and automobile insurance policies. The personal umbrella policy is ideally suited to provide this protection.