Frequently Asked Questions
We understand that insurance is a tricky business and that each person has their own set of questions unique to them. This is why we have created a Frequently Asked Questions for our clients so that they can worry less about their insurance, and enjoy their life more!
Who do I have to include on my auto insurance policy?
While each insurance carrier has slightly different rules in regards to this, essentially every licensed driver that lives in your household is required to be listed on your auto insurance policy. This could be your spouse, children or others that reside with you. There is no limit on the number of drivers you can insure on your auto policy, you just have to have a good reason to include them as a driver.
This means you cannot include someone who does not live with you, such as a child who moved out or got married and maintains their own residence. However, most companies allow you to insure a child who is away at college on your policy, unless they are going to a school out of state.
Will my auto insurance cover a rental vehicle?
Generally, your auto insurance policy coverage will extend to a rental vehicle. If you cause an accident, your liability insurance limits will come into play to cover damages to other cars or injuries to people. Likewise, if you carry comprehensive & collision coverage would take care of damages to the rental vehicle from an accident or other damages such as theft or vandalism/
However, having comprehensive and collision coverage on your regular vehicle will not protect you from every charge a rental company can impose on you. There are often additional costs such as administrative fees, loss-of-value and loss-of-use fees to cover the time the vehicle is out of use. You would still be responsible for these costs. If you purchase the rental insurance from the rental car company, typically these fees are covered by that coverage.
How much auto insurance coverage do I need?
Auto insurance policies have coverage limits in place that detail the amount of coverage the insurance company provides. If you exceed your policy’s limits, you are responsible for remaining bodily injury or property damage costs. There are 3 main types of auto insurance coverage: liability, comprehensive and collision coverage.
Liability coverage covers you for property damage and bodily injury that you are at fault for. Every state has a minimum liability limit that the state requires you by law to maintain on yourself as a driver. In a horrible accident, the minimum liability limits are often not enough coverage to cover the amount of damage whether property damage or bodily injury, that you are financially responsible for. As such, as an agency we recommend 100/300/100 coverages for people that rent their home and 250/500/100 coverages for people that own their home.
Comprehensive and collision coverage is commonly known as “full coverage” are “no-fault” coverages that cover property damage to your vehicle whether caused by an accident or something other than a collision. If you are currently making payments on your vehicle, the lending institution will require you to have these coverages, but if you own your vehicle outright you are not required to have these coverages. However, without having comprehensive and collision coverages, if you are at fault in an accident, you would have to pay out of pocket to repair or replace your vehicle. If you drive an older car, and you have money in the bank to replace if it were totaled, then it may be the right move to opt out of these coverages. Otherwise, you should ask yourself if you can really afford to not have these coverages in place.
What is PIP? Should I have it?
Personal Injury Protection (PIP) is a type of insurance coverage required in over 15 states that is similar to medical expenses coverage but has additional benefits. PIP covers in most cases the following things up to the coverage limits:
Physical or occupational therapy
Approximately 60-80% of lost wages
- Services coverage like child care, lawn care, laundry, etc. (if your accident left you unable to take care of household chores/family)
PIP does make auto insurance policies a little more expensive, but if you do elect to reject this important coverage, make sure you have good health insurance and savings in an emergency fund.
What does my homeowners insurance cover?
Your homeowner’s insurance policy provides financial protection to cover losses due to disasters, accidents, and theft. As such, this provides coverage for the structure of your home, any outside structures, your personal belongings, additional living expenses (if you had to live outside your home while your home is being repaired or re-built) and liability coverage.
Every insurance carrier specifies on their policies what specific disaster are covered, but the most common disasters covered are fire, wind, hail, and lightning coverages in regards to the structure of the home. Other structures coverage is similar to dwelling coverage (generally around 10%) and covers other structures on your property (fences, sheds, etc.).
Personal belongings coverage is generally set anywhere from 50% to 70% of the dwelling coverage of your home, and this covers your furniture, clothes, personal items, etc. if they are stolen or destroyed by fire, wind or other disasters, or if they are stolen. This includes personal belongings stored away from your home anywhere in the world (generally around 10% of your overall coverage). More expensive items such as jewelry, firearms, art, collectibles, etc. are covered, but there are generally limits to the amount of coverage if they are stolen. However, you can schedule personal property on your policy to insure particular items for their full value.
Your personal liability coverage that comes as a part of your homeowners policy covers you against lawsuits that may be brought against you or members of your family for bodily injury or property damage harm caused to others. It also covers damage caused by a pet (such as a dog bite). This coverage covers court fees and damages that may be awarded to another person. An optional coverage that can be added is personal offense coverage which covers you in the event of libel or slander lawsuits. Often homeowners policies start with only $100,000 in coverage for this. This is often not enough coverage, and so we recommend homeowners have $500,000 in liability coverage on their homeowners policies. Homeowners policies also include no-fault medical payments coverages, generally between $1,000 and $5,000 that help cover medical bills for a friend or neighbor injured in your home.
What does my homeowners insurance NOT cover?
Two big hazards that homeowners insurance policies do not cover are earthquakes and flooding. Earthquake and flood insurance policies are separate insurance policies that you can purchase. Standard home policies also limit or totally exclude mold damage coverage. If you have any sort of leak in your home, it is really important to get rid of the moisture as soon as possible. Sewer backup is also not typically covered on a standard home policy, but can often be added as an endorsement to your home policy. Expensive items such as fine art or jewelry will have limits as far as how much is covered on the insurance policy. Stolen or destroyed cash as well is often not covered beyond a small limit. As such, it is important to schedule personal property onto your homeowners insurance policy so that it can be insured at a proper value.
How much dwelling coverage do I need for my home?
Dwelling coverage (also labelled as Coverage A) on homeowners policies is the coverage in place to protect your homes structure if it is damaged or destroyed from a covered peril (fire, hail, windstorm, vandalism, etc.). It is important to understand that the intent of this coverage is to cover the replacement cost of your home and its attached structures. The cost to rebuild your home is also not the same as the current market value of your home, or what you paid for it. As such, if you live in a high value property area, your re-build cost might be $250,000 for home with a market value of $600,000. In this situation, you would want to put your dwelling coverage at $250,000. It is a good idea to understand more about the replacement value of your home by talking to a reputable home appraiser or building contractor.
Should I get an umbrella insurance policy?
Umbrella insurance policies are additional liability coverage that comes into play when your underlying auto or homeowners (or boat/motorcycle/dwelling fire policies) liability limits are exhausted. This helps protect you in the event of lawsuits brought against you for someone being injured by you in a car accident, in an accident on your property, or from slander or libel lawsuits brought against you. Umbrella insurance will not only cover medical bills costs, but also legal defense and settlement costs.
Most umbrella policy limits are at $1M or $2M, but higher liability limit options are available. In an ever-litigious culture, it is important to make sure if you are sued, your assets (and future earnings) are protected!
Water & Sewer Line Coverage
This optional coverage protects the homeowner from losses caused by water damage from a sewer drain or sump pump on their property.
How do accidents and tickets affect my auto insurance?
Minor violations such as a speeding ticket, failure to yield, etc. stay on your record for 3 years, while major violations (like a reckless driving or a DUI) stay on for 5 years!
Accidents can affect your policy a few different ways, “At Fault” accidents will show on your record for 5 years and increase your policy because of that claim. While most “Not at Fault” or “Comprehensive” claims will not affect your rate (but will show on your record for 5 years). Each accident it its own unique situation and we always recommend talking with your account manager if you are unsure if a claim needs to be turned in or have questions.
Do you have a Home-Based Business?
Ask your self a few important questions:
- Do you bring clients or customers into your house?
- Do you make more than $2,000 a year?
- Do you keep inventory in your house or off location?
- Do you maintain client or employee records on your computer?
- Would you lose income if you had to close your business because of damage that happened to your home?
If you answered “yes” to any of these questions, your homeowner’s policy may not provide enough coverage for your home-based business.
Solutions from North Town Insurance include General Liability, Business Owner’s Policy and Endorsements that can tailor these policies to your personal needs.
What does Water/Sewer Backup cover on my home insurance policy?
While insurance plans may vary, the following typically apply to water/sewer backup:
Water that backs up through sewers or drains as long as it originates on premises (toilet overflows, drain backups). It does NOT include:
- Flooding – surface water entering the house.
- Overflow originating off premises – sewer line breaking in the street and causing water flow over the surface into the house. (Can we link to the Water or Sewer Line Coverage page?).
- Sub-surface water – an example is a swimming pool or sprinkler system leaks underground causing water to seep through the foundation.
What do I do after a car accident?
- Make sure no one is injured. Stay calm and be polite.
- Exchange insurance information: name, address, phone number, insurance company, policy number, driver’s license number and license plate.
- Photograph and document the accident. User your camera/phone to document damage to all vehicles and the general area. Write down basic details of the accident.
- File an accident report. Although law enforcement may not respond, call in an accident report.
- Know what your insurance covers. Do you need a rental car? Towing? Do you have full coverage?
- Call your insurance agent – North Town Insurance 509/483-3030!
What does my credit history have to do with insurance?
Ninety-two percent of insurance companies use credit information when underwriting new policies.
Financial history is used to help classify an insured according to their potential risk. Studies have shown a strong correlation between a client’s financial history and their future insurance loss potential. Therefore, insuring companies believe the use of credit helps to underwrite an applicant at a cost that reflects their possible risk.
What do I do if a neighbor’s tree looks unhealthy?
Document, document, document.
If a healthy tree falls (due to weather, etc), it is not the responsibility of the neighbor because it was unpredictable. Your home insurance policy will be primary. The insurance company is in the business of “making us whole” and will act because you have the insurance on your home.
If an unhealthy/unmaintained tree falls, your policy will still cover so that you are “made whole”. However, they will investigate the situation and possibly subrogate to the neighbor’s policy. This is where documentation comes in! There needs to be evidence that the tree was unhealthy/unmaintained and the neighbor was notified of the same. Pictures, letters, notices are helpful.
The home insurance company will investigate during the course of the claim.