Insurance FAQs
General Questions
Auto Insurance
Home Insurance
Renters Insurance
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General Questions
Q: Why do I need to buy insurance?
A: Insurance is designed to protect your assets and your future in case of a court award. It provides for cost of defense when you are sued, and it provides financial security for you and your family in case you can’t work, get ill, or die.
State laws, or other institutions such as your mortgage company flat out require you to have some types of insurance, such as auto or homeowner insurance.
You need insurance to protect yourself and your loved ones against some of the risks in life. Granted, there is no way insurance can protect us from all the risks and “what ifs” in life – and if there was, most of us probably wouldn’t be able to afford it. Most everybody takes some risks with what they own – but the question is: How much risk are you willing to accept?
In order to find an insurance policy that is right for you, you need to determine what you want to protect, and how much risk you are willing to take.
An independent insurance agent can help you find answers to these questions.
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Q: Why Work With An Independent Insurance Agent?
A: There are thousands of insurance companies in this country, each of which offer a variety of programs and coverage options. No two companies offer the exact same policies, and they have different limits on what they will cover in case of a loss.
Of course, you can shop on the Internet and get price quotes, or you could call the companies directly, but do you get several quotes and different options in one place, without having to spend extra time shopping?
- Can you be sure that the person you are working with is licensed, and has your best interests in mind?
- Do you get help to get the best coverage at the lowest price, or confidential claims advice in case something happened?
- Can you ask questions and get explanations on everything you didn’t quite understand?
An Independent Insurance Agent can offer you all this – at no additional cost! Independent Agents offer different markets and work for you to find the best rates, and coverage – easy one-stop shopping for you. While insurance agents represent an insurance company, they are not employees of the insurer. An independent agent will also represent you and your case to the company.
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Q: What factors affect the insurance premiums I pay?
A: Your premium is affected by factors such as
Age of driver(s), type of car, driving history, claims activity, auto body repair, location of home, length of commute.
Age of a home, building type, foundation, grade, type of heating, renovation activities, age of roof, claims activity.
Age, health, number of dependents.
Investment records, credit score, legal defense, jury awards, claims adjustment, insurance fraud, good-driver records, good-student discounts, number of policies with one company.
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Auto Insurance
Q: Do all states require some kind of liability insurance?
A: No. Although not every state requires Auto insurance, some have “financial responsibility” laws mandating all drivers to be able to pay for any damage or injury they might cause. However, liability insurance is still the best way for you to meet your State’s financial responsibility requirements.
In Washington State, law requires a minimum of $25,000, $50,000, and $10,000, for Bodily Injury or Property Damage. Most people need to carry much more to protect their assets from a claim after an accident.
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Q: How does where I live affect my premium?
A: Where you keep your car directly affects your chances of having an accident or becoming a victim of theft or vandalism. The likelihood of encountering these problems increases in larger, more densely populated cities, while such incidents remain relatively low in rural areas.
Additionally, the time and efficiency of police response and law enforcement, local road and traffic conditions, and the quality of local medical services can affect regional insurance rates.
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Q: What happens when I loan my car to a friend? Is that person covered by my policy? Am I still covered?
A: Most of the time, yes. Please see bold print below. Liability and coverage for physical damage (i.e. comprehensive and collision) usually follows your car.
The vehicle owner’s policy is the key coverage in the event of an accident – “liability follows the car” first, and the driver on a secondary basis.
If you have a household member, friend or relative who regularly drives your car, make sure that you give your insurance company their name and drivers license number. If the driver is under the age of 25 years, call your agent to verify if he/she would be covered.
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Home Insurance
Q: Who decides on the insurance company for my home – the mortgage company or me?
A: You do. The mortgage company collects a set amount from you each month in order to protect their investment. This money is put in escrow and covers your insurance and taxes. However, the policy is still yours and you may select the insurance you feel offers the best coverage at the best rates.
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Q: What does a Homeowner’s policy cover?
A: There are several hundred insurance companies writing Property /Casualty business in the United States, although there are slight differences. 80% of homeowners’ policies are based on a standard form. All homeowner’s policies cover two important areas:
Property and Liability.
Property insurance covers your structures and possessions. Your homeowner's insurance will pay if you have a covered loss.
Personal liability, as its name implies, means you are legally obligated to pay money to another person for actions caused by you, your family or your property. This liability extends to medical payments to others for injuries caused by you or your family.
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Q: What does a Homeowner’s policy NOT cover?
A: While most catastrophes are covered, flood and earthquake damage are not covered by a standard policy - and both perils are more common than many people realize in Washington State.
There may be other exclusions listed and defined in your policy. These may include neglect, intentional loss, “earth movement”, general power failure, and even damage caused by war. If you fail to take care of your property for example, a leaky roof, you might not be covered.
One other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by governmental bodies that drive up the cost of rebuilding or repairing after a loss occurs might not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher grade or more expensive materials than those you are replacing, the new materials might not be covered fully.
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Renters Insurance
Q: Why do I need renters insurance?
A: Generally, the property owners insurance covers the building itself. However, the tenants’ possessions or liability are rarely covered. If you live in a rented home or apartment, you might want to consider renter’s insurance to protect your property in case of loss.
Renters insurance will protect your property (such as sports gear) even if you’re away from home, and will provide liability insurance if you have guests and someone gets injured in your home.
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Q: How expensive is renters insurance?
A: Renters insurance is typically available for as little as $ 120 a year, or $ 10 per month.
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More questions? Go to All Insurance Club and find more details and answers to tricky insurance questions.
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