Insurance Questions & Answers

Insurance Questions & AnswersInstant Quote on Auto and/or Home Insurance

Financial Protection Insurance Broker Brian JohnsonInstant Quote on Auto and/or Home Insurance

Independent Insurance Agents of America – Questions and Answers

What is insurance and what kinds are there?

Insurance is a means of guaranteeing your financial
protection against various risks. There are different kinds
of insurance to cover different circumstances. Policies are
available for business purposes and for personal needs. Personal
insurance is divided into:

  • Property/Casualty Insurance: Provides protection for property like homes,
    cars and house-hold possessions, in addition to protection
    from liability as a result of their use.
  • Life Insurance: Provides funds to a designated beneficiary
    or beneficiaries in the event of an insured�s death.
  • Health Insurance: Pays for costs related to your health (e.g.,
    doctor visits, hospital stays and diagnostic tests).
    Disability Insurance, a form of insurance that combines
    elements of life and health insurance, pays you for
    income lost due to a disabling injury or illness. Life,
    health and disability insurance are often provided
    through employers. Ask your employer about these coverages
    and check with your agent to make sure they meet your
    needs.

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How do I decide which kinds of insurance I should buy?

You probably should consider five basic lines
to see if they apply to your situation:

  • Auto Insurance: If you own or lease a car or are planning
    to in the near future, you will want to protect that
    investment with auto insurance. This coverage helps
    you cope with the expense of accidents, vandalism or
    theft. In addition, if you are financing the vehicle,
    the lending institution probably will require that
    you carry auto insurance. Another area that needs protection
    is your liability. If you are sued because of damage
    your vehicle caused, auto insurance will help with
    legal expenses and any damages you have to pay.
  • Health
    insurance
    : To cope with today�s high medical costs,
    virtually everyone needs health insurance. Following
    graduation, you may no longer be covered by your parents� policy,
    so you may need one of your own.
  • Homeowners
    or renters insurance
    : Whether you own a home or rent
    an apartment, you want to make sure your possessions
    are protected. Both homeowners and renters insurance
    offer comprehensive coverage at home and when you travel.
    They also offer liability protection should you be
    sued.
  • Life
    insurance
    : If you have dependents or are interested
    in purchasing life insurance that builds value as you
    pay the premiums, talk with your agent about the plans
    available.
  • Disability
    Insurance
    : This is designed to provide required income
    should you be injured or disabled. The extent of coverage
    should be enough so that, when combined with your other
    assets, you would have enough to live on.

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Can I get all the insurance I need from one agent?

Yes. Most agents are licensed in their states to sell various lines of insurance.

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What
does auto insurance cover?

Auto insurance is divided into several different types of coverage:

  • Liability
    covers damage to other people�s property and injuries
    you may cause while operating an automobile.
  • Collision
    covers damage to your own vehicle in an accident.
  • Other
    than collision, or Comprehensive, covers fire damage
    to your vehicle, break-ins, vandalism or theft, as
    well as natural disasters {earthquake, hail, hurricane,
    flood, etc.: unless the vehicle is overturned, then
    it is considered a collision).
  • Medical
    payments insurance guarantees emergency and related
    medical payments, usually in the range of $5,000 to
    $10,000, for you, your passengers and other parties,
    regardless of who is at fault. It also covers you and
    members of your household in any accident involving
    an automobile, whether you are on foot, in a friend�s
    car or riding a bicycle, etc.
  • Uninsured
    motorist (UM) and under insured motorist (UIM) coverage
    protects you and your passengers if injured in an accident
    with drivers carrying insufficient liability coverage.
  • Extra
    coverages include expenses for towing, labor and temporary
    replacement vehicles, etc. These are generally defined
    as add-ons or endorsements to your policy.

Your agent can offer you more information on
the limits and types of coverage that will best suit your
situation.

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Have a question? Call 281-852-3333 / 1-877-358-2587 (toll free). Or click here to email us by our contact form.

How
do I file a claim?

You file a claim with the insurance company
that issued your policy. If you need to file an auto claim
or other property damage claim, check with your insurance
agent.

Be thorough and exact when reporting damage
and always tell the truth. Withholding vital information
or exaggerating the facts can not only lessen your chances
of the claim being settled to your satisfaction, but also
may be considered a crime. (Insurance fraud costs consumers
millions of dollars a year. In fact, a dime of nearly every
dollar of your premium is used to cover fraudulent claims.)

Once your claim has been filed, an adjustor
will be assigned by the insurance company. He or she is charged
with investigating your claim and then making a recommendation
to the insurance company. The recommendation can be to accept
the claim and pay the full amount requested, accept part
of the claim and make partial payment, or refuse the claim
and make no payment. The insurance company will then make
a decision regarding your claim and notify you of its final
decision.

The amount of compensation offered can vary
according to the adjuster�s analysis. You do not have to
accept the first amount offered if you feel it is too low.
While you may have to do some researching to prove a higher
payment is valid, it may be worth it. Your agent should be
able to assist you.

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Help!
I’ve lost everything! Where do I start?

The best place to start after a great loss
of property is with an inventory of that property. And the
best time to make an inventory is before all is lost.
If most of us suddenly found ourselves without anything due
to some calamity, we would be hard pressed to know all that
we had lost. When was the last time, for example, that you
counted the number of shoes or CDs you own, not to mention
furniture, dishes, or audio/video equipment? How much is
it all worth and where would you start if you had to replace
it?

Now is the time to make a
list of your major possessions
. Where possible, it
is wise to list the item�s serial number, date and cost
of purchase and to hold onto the receipt.

Perhaps an even easier way to inventory your
possessions is to use a still or video camera. As you take
the video, you can also talk about the items, when you purchased
them and how much they cost.

Whichever method you choose, have a copy made.
Ask a friend or family member to hold on to it. Or store
your copy in a safe deposit box. Also, check with your agent,
who may be able to store a copy for you. If the worst happens
and your possessions are destroyed, the inventory will be
safe at another location.

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What factors
affect the cost of insurance?

  • The
    likelihood of a loss occurring
    : The greater the probability
    a loss will occur can mean a higher rate {e.g., earthquake
    insurance in California).
  • The
    potential size of the claim
    : If you purchase a large
    amount of coverage (that is, if the item you are insuring
    is quite valuable), the chances are there could be
    a large claim and the premium will need to cover that
    possibility.
  • The
    percentage of loss the insurance company will be required
    to pay
    : If you have no deductible, the company will
    pay 100% on a covered loss. This increases their risk
    and your premium. To understand how a deductible works,
    consider the following: If the deductible on your auto
    insurance is $100, it means you agree to pay this amount
    first, and your insurance company will pay for damages
    exceeding this deductible. By increasing your deductible
    from $100 to $250, or even $500, this decreases the
    insurance company� risk, which may mean a savings in
    your premium.

Other factors can influence premiums such as
the number of lawsuits and the average amount awarded in
a given state. In short, your insurance company tries to
ascertain how much it needs to accumulate to cover all the
claims it will receive.

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What
should I look for in an agent?

Agents are there to help you. At the most basic
level, any agent should be able to answer your questions
about insurance, provide you with a thorough assessment of
your insurance needs and offer you a choice of insurance
products to meet those needs. Also, your insurance agency
should provide you with prompt, quality service in the case
of a claim.

Just as important is the level of professional
confidence and personal comfort you feel with the agent.
Many people stick with the same insurance agent for decades,
even generations. It helps to find an agent you can get to
know and trust.

An important, but sometimes overlooked, factor
to keep in mind is that there are two kinds of insurance
agents: those who represent only one insurance company and
those who represent more than one insurance company.

Agents offering through their agencies only
the policies of one insurance company often are referred
to as �captive agents� because the company they represent
does not allow them to offer their customers competitive
alternatives.

By contrast, agents offering through their
agencies the policies of more than one insurance company
are called �independent agents� because they can shop around
for their customers for the best insurance values among a
variety of competing companies.

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Have a question? Call 281-852-3333 / 1-877-358-2587 (toll free). Or click here to email us by our contact form.