What
are the best liability policy limits?
It
is generally accepted among insurance agents that the state
minimum policy limits are not enough. Most insurance professionals
would agree for the average driver the best liability limits
to have are 100/300/100. This means:
-
100,000 per person for bodily injury
-
300,000 per accident for bodily injury
-
100,000 per accident for property damage
Since
in most areas medical treatment is in fairly the same range,
the last limit, per accident for property damage, is the
one you may want to take into account if you are not the
average driver. If you live in an area where you feel that
if there was an accident, that was your fault, and property
damage may exceed 100,000, you may want to consider higher
limits. Remember, property damage is the other person's
car and any other property damaged during the accident if
you are at fault. In some areas one's landscaping can cost
over 100,000!
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What
is the difference between comprehensive and collision?
Collision
coverage is when you have a collision with something like
another car. Comprehensive coverage is when it is anything
else other than a collision such as fire or theft. Most
people would have both coverage's when using the car on
a regular basis. Sometimes when one is just storing a car
they may only keep comprehensive coverage since they are
not using it on the road therefore, it is unlikely to be
in a collision.
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How
does my driving record affect my insurance premium?
The
premium you pay is a direct reflection of your driving record
for the past three to five years depending on the insurance
company. Insurance companies order driving records from
the DMV of your residence state and from other states where
you've been licensed. Statistics show that drivers with
tickets and accidents are more likely to have accidents
than drivers with clean records.
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Does
everyone have to have auto insurance?
Yes,
automobile liability insurance, or proof of financial responsibility
is required in all fifty states. Although each state sets
their own limits on how much insurance is needed, these
are only minimum limits and in most cases additional coverage
is needed if you don't want to have to pay additional expenses
out of pocket. If you have a lease or loan on your car you
are usually required by the lender to have comprehensive
and collision coverage in addition to the state required
liability coverage.
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What
do I do at the scene of an accident?
- Stop
immediately, but do not obstruct traffic.
- Assist
the injured. Have someone call the police, repeat after
5 minutes.
- Secure
names, phone numbers, addresses of other drivers, witnesses,
injured persons.
- Secure
make, model, license numbers of all cars involved.
- Make
rough drawings of the scene, showing positions of cars
and other details.
- Don't
hastily accept claim settlements at the scene of an accident.
- Remain
calm, courteous and consistent in your version of the
accident.
- Notify
your insurance agent as soon as possible.
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What
is homeowners insurance, and who should buy it?
Homeowners
is one of the most popular forms of personal insurance on
the market. The typical homeowners policy has two main sections:
Section I covers your property, and Section II provides
personal liability coverage (to cover you in case of lawsuits
arising from things that happen on your property). Almost
anyone who owns or leases property should have this type
of insurance. Often, homeowners insurance is required by
lenders as a requirement to obtain a mortgage.
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What
should I consider when buying homeowners insurance?
First and foremost, buy the amount and type of insurance
you need. Remember: if your policy limit is less than 80%
of the replacement cost of your home, you will face a "coinsurance
penalty," which means you'll have out-of-pocket expenses
to cover costs beyond your policy's deductible. For example:
Your home's estimated replacement value (RCV) is $100,000.
The co-insurance clause requires you carry at least $80,000
(80% of your RCV), so you would be underinsured by half
if you bought a $40,000 policy. In such a scenario, the
company would pay half of a loss less the policy deductible
- so if you had a $500 deductible and suffered a $10,000
covered loss, your policy would only pay $4,500.
Also, figure out how much personal property insurance and
personal liability coverage you need. Personal property,
like a home, should be insured for its replacement value.
Personal liability is a bit more subjective, but limits
should not be less than those on other liability insurance
such as auto. Seek advice from a financial or legal professional
if in doubt. Finally, think about the extras you could add
to your policy. For example, do you want the personal property
replacement cost endorsement or the earthquake endorsement?
Finally, once you have decided on the coverage you want,
contact Raymond A. Nalley Insurance
Agency to discuss your options.
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What
is the difference between the replacement cost and the actual
cash value of my property?
Replacement-cost
coverage pays to replace your home and belongings with materials
of "like kind and quality" at current prices.
Actual cash-value policies reimburse the depreciated value.
A replacement-cost policy will usually cost a little more.
Some companies no longer offer replacement cost coverage.
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What is the difference between an "all
risks" policy and a "named perils" policy?
A named perils policy covers losses that are due to only
those perils listed in the policy. Those typically include
fire, windstorm, hail, and other physical losses. An all
risks policy covers losses that are due to any peril except
those specifically excluded in the policy. An all risks
policy provides broader protection than a named perils policy.
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If
I have an accident I think is covered under my homeowners
policy, what should I do?
Insurance contracts are conditional contracts, which means
policy owners have certain responsibilities to meet if a
covered loss occurs. Not completing these can result in
non-payment by the insurance company for losses that otherwise
would have been covered. These include: (1) notifying the
insurance company or the agent that a loss has occurred
-- this should be done as soon as you discover the loss;
(2) protecting the property from further damage and/or making
any repairs necessary to prevent further damage; (3) preparing
a detailed list of the personal items damaged that contains
descriptions, the items' actual cash value, or their replacement
cost if you have added the replacement cost endorsement
to your policy; (4) being prepared to show the company and/or
the insurance agent the damaged items; (5) completing a
statement for the insurance company that explains how the
loss occurred -- for example, the time the damage occurred,
the cause, etc.
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