Insurance FAQ

What kind of deductible should I carry?

Simply put, you should carry the highest deductible you can afford to pay in the event of a loss. A deductible is the out-of-pocket amount you must pay before your insurance company will cover the cost of a loss. Deductibles affect your rates greatly, so choose them wisely.

By choosing higher deductibles, you can help avoid possible penalties for turning in losses. These penalties can include surcharges for a lower deductible, deletion of the loss-free credits and loss surcharges.

Keep in mind that the number of claims reported will affect your annual premiums. To avoid unwanted increases to your annual premium, you should try to absorb small losses yourself. Policies are designed to focus on more catastrophic losses, which would devastate you if you were without coverage.

What kinds of discounts are offered?

There are numerous credits that may apply to your policies, including:

  • Purchase home and auto from the same carrier
  • Protective devices
  • Loss-free credits
  • Being a good student
  • Insuring multiple cars with one carrier
  • Driver training
  • Defensive driver training
  • Loyalty credit
  • Anti-lock systems
  • Alarm systems
  • Notifying your carrier about any insured individuals being away at school without a car
  • New home credits

It is important that you speak with your agent. They can help you receive more discounts if they are aware of your specific circumstances.

Why should I insure my home for an amount larger than its market value?

You should always insure your home for its replacement cost, not its market value. Replacement cost is the amount to rebuild your home, as it exists, with the same features, level of quality and location. Market value is the amount for which you bought or could potentially sell your home.

Replacement cost factors include:

  • Square footage
  • Building material costs
  • Cost of labor in your area

Items that are not factored in include:

  • Market value
  • Neighborhood desirability
  • Taxes
  • School system
  • The economy
  • The land value.

ALWAYS NOTIFY YOUR AGENT OF ANY CHANGES OR UPGRADES MADE TO YOUR HOME TO ADJUST THE REPLACEMENT COST ACCORDINGLY.

What about my contents coverage, is Actual Cash Value (ACV) enough?

No. Actual cash value is the true value of the property at the time of loss, taking into account value depreciation. You need to consider replacement costs, which is the amount of money needed to completely repair or replace your home to the same standard it was at the time of loss, regardless of its age depreciation.

For example, a $700 television, purchased 5 years ago, is lost in a house fire. With actual cash value, 5 years of depreciation would be subtracted from the $700 – you would receive approximately $150 to replace it. With replacement cost, however, you would receive the full amount needed to replace the same television, no matter the amount of time it has been since it was purchased.

Does my home insurance policy include flood coverage? 

No. Flood coverage must be purchased separately from a homeowner’s policy. There is a 30-day waiting period. An average preferred flood insurance policy runs approximately $350 annually. The rates vary based on location, value of home, contents and number of levels in the home, among other underwriting factors.

What insurance endorsements do I need?

Everyone has different needs, but everyone should consider adding:

  • Identity theft
  • Water backup/sewer
  • Earthquake
  • Equipment breakdown where available
  • Umbrella
  • Life insurance