How does where I live affect my premium?
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. Some insurers even factor in the
litigation rates in a given area (how many lawsuits are
filed, go to trial, out of court settlements, and their
Do all states require some kind of Liability insurance?
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.
By law, all states offer UM and UIM policies, including
no-fault states. In fact, some states require all motorists
to carry this coverage in order to gain protection from
inadequate insurance coverage of other drivers.
How do I keep my insurance company from canceling my policy?
Besides maintaining a clean driving record, consider
investing in special safety and security features for your
car. If you've been in an accident, consider taking a
defensive driving course.
What happens when I loan my car to someone? Is that person
covered by my policy? Am I still covered?
Yes. Liability and coverage for Physical Damage (i.e.
Comprehensive and Collision) always follow your car. Plus,
if the driver of your car is insured, his/her policy will
also be available to cover the cost of damages and injuries.
The same rules apply when you borrow someone else's vehicle;
your own insurance follows you no matter whose car
Who decides on the type of insurance, the mortgage company
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 might select the
insurance you feel offers the best coverage at the best
What exactly does a Homeowners policy cover?
Exact coverage is impossible to define because there are
different policies and about 900 insurance companies writing
Property/Casualty business in the United States. However,
80% of Homeowners policies are based on a standard form.
All Homeowners policies cover two important areas: Property
Property insurance covers your structures and possessions.
Personal Liability, as its name implies, means you're
legally obligated to pay money to another person for actions
caused by you, your family, or your property. That
liability extends to medical payments to others for injuries
caused by you or your family.
Are floods, earthquakes, and other natural disasters
Most catastrophes are covered. Flood and earthquake damage,
however, are not covered by a standard policy and both perils are more common than
many people realize. We can advise you on such normally
excluded conditions as floods and earthquakes.
Are there exclusions I should know about?
Exclusions listed and defined in your policy might include
neglect, intentional loss, earth movement, general power
failure, and even damage caused by war. If you fail to take
care of your property (e.g., a leaky roof) you might not be
covered. Obviously, if you intend to
lose an object or damage your property, there's no coverage.
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're replacing, the new
materials might not be covered fully
Do I need life insurance?
You need life insurance if anyone depends on your income.
In such cases, life insurance solves many personal and
business financial problems.
As a young parent; you may need life insurance on your own
life to enable a surviving spouse to raise the children.
When you are older, you may need life insurance if you are
financially responsible for an aging parent or want to
provide funds to take care of final expenses, debts or
A general rule suggests buying protection equivalent to FIVE
TO EIGHT TIMES YOUR ANNUAL INCOME. Your needs may vary
according to your financial assets and liabilities.
Life insurance can solve your heirs' immediate and long-term
- Immediate needs include: funeral expenses, unpaid medical bills, debt
and taxes. Having money to pay immediate expenses may
give your heirs time to readjust their lives, free from
- Long-term need for the care of dependents, college expenses and, in
general, providing financial resources.
Life insurance is often the solution to:
a key person and provide the funds to cover the costs of
locating and training a replacement.
- Continuation of the business when a proprietor, partner
or co-owner dies.
What is a beneficiary?
This is the person or financial institution (a trust fund,
for instance) named in an insurance policy as the recipient
of the funds in the policy, in the event the policyholder
In addition to naming a specific beneficiary to receive the
proceeds of your life insurance policy (permanent or term),
you should name a secondary or "contingent" beneficiary,
just in case you outlive the first beneficiary.
If there is no living beneficiary, the proceeds will be paid
to your estate and have to go through probate proceedings,
resulting in a possible delay before your family receives
the money. If the proceeds go into the estate, these
proceeds may be subject to estate taxes.
How can I locate a lost life insurance policy?
If you suspect that someone who has died may have had a life
insurance policy and named you beneficiary, there are
several steps you can take to track down the missing policy:
1. Call your state’s department of unclaimed property to see if the
insurance company put the policyholder’s name on their list.
2. Check the deceased’s safety deposit box at the bank, their file
cabinets and personal computer records to see if you can
find the policy.
3. Look for old checks written to insurance companies in the past to
trace old policies.
4. Ask older relatives if the deceased ever mentioned that they had a
life insurance policy and which company they had it with.
5. Call the insurance company that provided auto and home insurance to
the deceased, because they might have used the same company
for life insurance.
Where can I get additional information on life insurance?
For more detail on life insurance, you can contact:
What are the advantages/disadvantages of term and permanent
There are pros and cons to buying either term or permanent
(cash value) insurance. Each has advantages and
disadvantages. One or the other or both may be appropriate
to meet your insurance needs.
The advantages of term policies include:
1. Term premiums are lower than those for permanent insurance so you
get more insurance coverage for less money. This allows you
to buy more coverage when you need it the most, such as when
you have young children.
2. Because term provides insurance for a specific period of time, it
is ideal for covering specific financial needs such as
covering your life until your children are through college,
until they are self-supporting, or covering your life until
you pay off your mortgage.
disadvantages of term policies include:
1. Premiums increase every time a policy is renewed, so the cost of
term insurance can become prohibitive as you near your late
50s and 60s.
2. Term life doesn't provide a savings feature known as cash value.
Term policies only pay benefits if you die while the policy
is in force.
3. If your insurance company wants you to take a medical exam when you
want to renew your policy, you may be turned down if your
health condition has deteriorated.
4. You could outlive your coverage, because term insurance is
generally not renewable after age 70 or 75, depending on
your state insurance regulations.
Permanent (Cash Value) Insurance
The advantages of permanent insurance are:
1. You lock in a premium rate at whatever age you start the policy and
the benefits are guaranteed for as long as you live.
2. Your policy accumulates cash value that grows tax-deferred. Your
premiums are invested by the insurance company in stocks,
bonds, real estate, venture capital and other funds, and you
receive a return on your money in the form of annual
dividends, which increase your cash value.
3. You can tap that cash value while you are alive with low-cost
loans. Any outstanding loans will reduce your policy's cash
value by the amount of the loan. Or you can withdraw the
cash value, though you will have to pay income taxes on
those withdrawals. You can also convert your cash value
into an annuity that will provide fixed-income throughout
your retirement years.
4. If you surrender your policy by discontinuing to pay premiums, you
will receive any accumulated cash value.
5. Dividends can be used to pay your premium in whole or in part.
6. Once you have passed the medical tests and have been issued a
policy, your policy cannot be cancelled for medical or any
other reasons if you continue to pay the premium.
disadvantages of permanent insurance are:
1. It is far more expensive than term insurance. This means that you
can usually afford far less permanent coverage than you can
afford term. If you start a permanent policy and then must
drop it because you cannot afford the premiums, you will
have lost a great deal of money.
2. Insurance companies invest your cash value quite conservatively so
it is possible that you could earn higher returns on your
own if you are a skillful and knowledgeable investor.
3. The return you earn on your cash value is determined by current
interest rates in money markets. So if interest rates are
high, your cash value will grow much more quickly than if
interest rates are low. Periodically, the insurance company
deducts its expenses and a mortality charge from your cash
balance. The mortality charge is the amount of money, based
on a premium rate per thousands of dollars of death
benefits, required to provide you with life insurance. The
company will guarantee a minimum interest rate and a maximum
mortality charge. Some will also guarantee a maximum
Can I replace my old policy with a new one?
Yes! But, if you already own a life insurance policy, think
carefully before you replace it with another. Do not give
up your old policy, until you can determine if you are:
1. Still insurable.
If your health has deteriorated, you may be refused coverage
after a medical exam by the new insurance company.
2. Going to save money.
You are now older than when you bought the existing policy
and your premiums will be higher based on your age alone.
3. Not giving up valuable benefits.
Your older policy may have protections, dividend rates or
other provisions that the newer policy may not offer.
4. Not leaving behind cash value.
Ask your agent what will happen to any cash value that has
accumulated in your old policy if you replace it with a new
It is possible that a new policy will offer superior
features, lower premiums and more coverage that would make a
switch worthwhile. Just make sure before you proceed with