10 Reasons to Review Your Coverage

Courtesy of iii.org

Coverage needs change as circumstances in our lives change; an annual insurance review will ensure you have the proper coverage for your needs and budget.


Our insurance needs change as circumstances in our lives change, which is why we recommend doing an annual insurance review. When you’re reviewing your insurance coverage, these ten questions can help you figure out whether you may need to talk to your insurance professional about making a change to your coverage.

1. Have you gotten married or divorced?

If you have gotten married, you may qualify for a discount on your auto insurance. Couples may bring two cars into the relationship and two different auto insurance companies, so take the opportunity to review your existing coverage and see which company offers the best combination of price and service.

If you are merging two households, you may need to update your homeowners insurance. And you may want to consider increasing your insurance for any new valuables received, such as wedding gifts, and for jewelry, such as wedding and engagement rings.

After getting married, it is important to review your life insurance needs. If one spouse is not working, he or she might be dependent on the working spouse’s income; if so, reviewing life and disability insurance coverage is prudent. The spouse who is not working outside the home should also consider having a separate life insurance policy because, in the event of premature death, the services he or she provides for the household would need to be replaced, and that could prove costly to the surviving spouse. Moreover, even if both spouses are working, couples often make financial commitments based on both incomes so the loss of one spouse’s income due to death or disability could be financially devastating without adequate insurance.

In the other hand, if you got divorced over the past year, you will probably no longer be sharing a car with your former spouse and have likely moved to a different residence. If this is the case, you should inform your insurer as you will need to set up separate auto and homeowners policies.

2. Have you had a baby?

If you have recently added a child to your family, whether by birth or adoption, it is important to review your life insurance and disability income protection.

If you are planning for your life insurance to match your survivors’ expenses after your death, the new child will no doubt add to those expenses, requiring more life insurance to keep your family secure. If you plan to save for your child’s college education, life insurance can assure completion of that plan. And if you keep your current life insurance policy, don’t forget to update the beneficiary designations to include the new child.

3. Did your teenager get a drivers license?

It is generally cheaper to add your teenagers to your auto insurance policy than for them to purchase their own. If they are going to be driving their own car, consider insuring it with your company so you can get a multi-car discount. And choose the car carefully—the type of car a young person drives can dramatically affect the price of insurance. You and your teens should choose a car that is easy to drive and would offer protection in the event of a crash.

Also, encourage your kids to get good grades and to take a driver training course. Most companies will give discounts for getting at least a “B” average in school and for taking recognized driving courses.

If your teenagers move at least 100 miles from home—for example, to go to college—you can get a discount for the time they are not around to drive the car (assuming they leave the car at home).

4. Have you switched jobs or experienced a significant change in your income?

If you had life and disability insurance through your former employer, and your new employer does not provide equivalent protection, you can replace the “lost” coverage with individual policies.

In the case of an income increase, you may have taken on additional financial commitments that your survivors will depend on. Make sure to review your life and disability insurance to ensure it is adequate to maintain those commitments.

If your income decreased, you may want to cut your life insurance premiums. Term life insurance is a good option, as the premium rates are very reasonable. And if you already have two or more policies you might be able to replace both with a single policy at a lower rate because you may reach a “milestone” amount of insurance. (For example, at many life insurance companies, $500,000 of insurance costs less than $450,000 because of the milestone discount.) But don’t drop existing life insurance until after you have a new policy in place.

5. Have you done extensive renovations on your home?

If you have made major improvements to your home, such as adding a new room, enclosing a porch or expanding a kitchen or bathroom, you risk being underinsured if you don’t report the changes to your insurance company. An increase in the value of the structure of the home may require an increase to your homeowners insurance coverage limits.

And don’t overlook new structures outside of your home. If you built a gazebo, a new shed for your tools or installed a pool or hot tub, you should speak to your insurance professional.

If, as part of a renovation, you purchase furniture, exercise equipment or electronics, you may need to increase the amount of insurance you have on your personal possessions. Keep receipts and add any new items to your home inventory.

6. Have you decided to buy a second home?

If you are searching for a vacation home or a second home you might retire to, make sure you research the availability and cost of homeowners insurance before you commit to the purchase.

The very factors that make a vacation home seem ideal, whether it is a waterfront property or a mountain retreat, can often introduce risks that make it costly and difficult to insure, such as proximity to the coast and the likelihood that it will be vacant for long periods of time.

In the event you have already bought a vacation home, don’t skimp on the insurance. The risk of theft or disaster is just as significant, if not more so, in a second home as in your primary residence.

If your new property is close to the water, be sure to ask about flood insurance. Damage to your home or belongings resulting from flood is not covered under standard homeowners insurance policies. Flood insurance is available from the National Flood Insurance Program (NFIP), as well as some private insurers, and is generally sold though private agents and brokers. You can ask your insurance professional whether your home is at risk for flood, or enter your address on the NFIP website to find out whether your home is in a flood zone. If you have a very valuable home, some homeowners insurers offer excess flood coverage over and above that provided by the NFIP policies.

7. Have you acquired any new valuables such as jewelry, electronic equipment, fine art, antiques?

A standard homeowners policy offers only limited coverage for highly valuable items. If you have made purchases or received gifts that exceed these limits, you should consider supplementing your policy with a floater or endorsement, a separate policy that provides additional insurance for your valuables and covers them for perils not included in your policy, such as accidental loss. Before purchasing a floater, the items covered must be professionally appraised. Keep receipts and add the new items to your home inventory.

8. Have you signed a lease on a house or apartment?

If you are renting a home, your landlord is responsible for insuring the structure of the building, but not for insuring your possessions—that is up to you. If you want to be covered against losses from theft and catastrophes such as fire, lightning and windstorm damage, renters insurance is a good investment. Like homeowners insurance, renters insurance includes liability, which covers your responsibility to other people injured at your home, or elsewhere, by you and pays legal defense costs if you are taken to court.

Regardless of whether you are a renter or an owner, you will have the following options when it comes to insuring your possessions:

  • Actual cash value pays to replace your home or possessions minus a deduction for depreciation.
  • Replacement cost pays the cost of rebuilding or repairing your home or replacing your possessions without a deduction for depreciation.

Think carefully about what your financial position would be in the aftermath of a disaster, and make sure you have the type of policy that is right for you.

9. Have you joined a carpool?

If you are a frequent carpool driver, whether it is to work, or ferrying kids to school and other activities, your liability insurance should reflect the increased risk of additional passengers in the automobile. Check with your insurance professional to make sure your coverage is adequate.

10. Have you retired?

If you commuted regularly to your job, in retirement your mileage has likely plummeted. If so, you should report it to your auto insurer as it could significantly lower the cost of your auto insurance premiums. Furthermore, drivers over the age of 50-55 may get a discount, depending on the insurance company.

What is Business Interruption Insurance?

Courtesy of iii.org

Business interruption insurance can be as vital to your survival as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire and windstorms. But too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not sold separately. It is added to a property insurance policy or included in a package policy.

A business that has to close down completely while the premises are being repaired may lose out to competitors. A quick resumption of business after a disaster is essential.

  1. Business interruption insurance compensates you for lost income if your company has to vacate the premises due to disaster-related damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
  2. Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take more time than many people anticipate to get the business back on track. There is generally a 48-hour waiting period before business interruption coverage kicks in.
  3. The price of the policy is related to the risk of a fire or other disaster damaging your premises. All other things being equal, the price would probably be higher for a restaurant than a real estate agency, for example, because of the greater risk of fire. Also, a real estate agency can more easily operate out of another location.

Extra expense insurance

Extra expense insurance reimburses your company for a reasonable sum of money that it spends, over and above normal operating expenses, to avoid having to shut down during the restoration period. Usually, extra expenses will be paid if they help to decrease business interruption costs. In some instances, extra expense insurance alone may provide sufficient coverage, without the purchase of business interruption insurance.

2018 Guide for Renter’s Insurance

Courtesy of iii.org

If you rent a house or apartment and experience a fire or other disaster, your landlord’s insurance will only cover the costs of repairing the building. To financially protect yourself you will need to buy renters or tenants insurance.


Renters insurance protections

Like homeowners insurance, renters insurance includes three key types of financial protection:

  • Coverage for personal possessions
  • Liability protection
  • Additional living expenses (ALE)

The big difference is that renters insurance doesn’t cover the building or structure of the apartment?that’s the landlord’s responsibility.

The following questions will help you choose the right coverage when you are shopping around for renters insurance or discussing your needs with an insurance professional.

Coverage for personal possessions

Coverage for your personal property is a key component of renters coverage, protecting you from theft, fire and a host of other unfortunate events.

1. How much insurance should I buy?

Make sure you have enough insurance to replace all of your personal possessions in the event of a burglary, fire or other covered disaster. The easiest way to determine the value of all your personal possessions is to create a home inventory?a detailed list of all of your belongings along with their estimated value.

2. Should I choose replacement cost or actual cash value coverage?

Actual cash value policies include a deduction for depreciation (that is, the idea that items lose value over time). Replacement cost coverage is pricier but can be well worth the extra expense if your belongings are damaged or destroyed (think about how much you’d get for your TV used versus how much it would actually cost to replace).

3. What disasters are?and are not?covered?

Renters insurance covers you against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and certain types of water damage (such as from a burst pipe or when the tenant upstairs leaves the water running in the bathtub and floods your apartment).

Like standard homeowners policies, most renters insurance policies do not cover floods or earthquakes. Flood coverage is available from the National Flood Insurance Program and a few private insurers. You can get earthquake insurance as a separate policy or have it added as an endorsement to your renters policy, depending on where you live.

4. What is my deductible, and how does it work?

A deductible is an amount of money you responsible for paying before your insurance coverage. For example, if you have a $500 deductible and a fire destroys $5000 worth of furniture, the first $500 is your responsibility and your insurance company will cover $4500.

Renters insurance deductibles are generally specified as a dollar amount, which can be found on the Declarations page of your policy. In general, the larger the deductible, the lower your insurance premium.

5. What is a “floater” and do I need one?

A floater is a separate policy that provides additional coverage for more costly valuables if they are lost or stolen. If you have expensive jewelry, furs, collectibles, sports equipment or musical instruments, consider adding a floater to your policy to protect against their loss.

6. Am I covered if I am traveling or away from home?

Most renters polices include what is called off-premises coverage, which means belongings that are outside of your home are covered against the same disasters listed in your policy. For example, property stolen from your car or a hotel room while you’re traveling would be protected.

Liability protection

7. What is liability insurance?

Renters insurance provides liability protection that covers you against lawsuits for bodily injury or property damage done by you, your family members and even your pets. This coverage pays for the cost of defending you in court, up to the limit of your policy.

Your renters policy should also include no-fault medical coverage as part of the liability protection. Medical payments coverage allows someone who gets injured on your property to simply submit his or her medical bills directly to your insurance company so the bills can be paid without resorting to a lawsuit.

8. Do I have enough liability insurance?

Make sure the amount of liability coverage provided by your policy is sufficient to protect your financial and other material assets in the event of a lawsuit.

9. Do I need an umbrella liability policy?

If you need a larger amount of liability protection, consider purchasing a personal umbrella liability policy. An umbrella policy kicks in when you reach the limit on the underlying liability coverage provided by your renters or auto policy. It will also cover you for things such as libel and slander.

Additional living expenses

Additional living expenses (ALE) coverage provides coverage if your home is destroyed by an insured disaster and you need to live elsewhere for a time.

9. What does ALE cover?

The additional living expenses portion of your rental insurance policy pays for hotel bills, temporary rentals, restaurant meals and other expenses you incur while your rental home is being repaired or rebuilt. Essentially, it covers the expenses you would not have to incur if you had your usual roof over your head.

10. How much does ALE cover?

Most policies will reimburse you the full difference between your additional living expenses and your normal living expenses; however, there are generally limits as to the total amount the insurer will pay or time limits specifying how long you’re eligible for the ALE payments. Make sure you’re comfortable with the limits of the policy you choose.

Multiple policy and other discounts

10. What types of discounts are offered on renters insurance?

Insurance companies often offer discounts on renters insurance if you have another policy with them?for example, car insurance or business insurance.

You may also get a discount if you:

  • Have a security system
  • Use smoke detectors
  • Use deadbolt locks
  • Have good credit
  • Stay with the same insurer
  • Are over 55 years old

Discounts may vary widely by insurance company and by state, so review your options carefully. As always, the same rule-of-thumb applies: shop around for the best deal.

Beneficiaries & Life Insurance

Courtesy of iii.org

A beneficiary is the person or entity you name in a life insurance policy to receive the death benefit. You can name:

  • One person
  • Two or more people
  • The trustee of a trust you’ve set up
  • A charity
  • Your estate

If you don’t name a beneficiary, the death benefit will be paid to your estate.

Two “levels” of beneficiaries

Your life insurance policy should have both “primary” and “contingent” beneficiaries. The primary beneficiary gets the death benefits if he or she can be found after your death. Contingent beneficiaries get the death benefits if the primary beneficiary can’t be found. If no primary or contingent beneficiaries can be found, the death benefit will be paid to your estate.

As part of naming beneficiaries, you should identify them as clearly as possible and include their social security numbers. This will make it easier for the life insurance company to find them, and it will make it less likely that disputes will arise regarding the death benefits. For example, if you write “wife [or husband] of the insured” without using a specific name, an ex-spouse could claim the death benefit. On the other hand, if you have named specific children, any later-born or adopted children will not receive the death benefit?unless you change the beneficiary designation to include them.

Besides naming beneficiaries, you should specify how the benefits are to be handled if one or more beneficiaries can’t be found. For example, suppose you have two children and you name each one to receive half of the death benefit. If one of the children dies before you do, do you want the other child to get the entire death benefit, or the deceased child’s heirs to get his or her share?

If the death benefit goes to your estate, probate proceedings could delay distributing the money, and the cost of probate could diminish the amount available to your heirs.

Choosing beneficiaries, and keeping those choices up-to-date, is an important part of owning life insurance. The birth or adoption of a child, marriage or divorce can affect your initial choice. Review your beneficiary designation as new situations arise in order to make sure your choice is still appropriate.

What Happens if Your Car Insurance is Cancelled?

Courtesy of iii.org

There’s a difference between an insurance company cancelling a policy and choosing not to renew it. Learn why your insurance might not be renewed

Auto insurance cancellation

Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:

  • You fail to pay the premium
  • You have committed fraud or made serious misrepresentations on your application
  • Your drivers license has been revoked or suspended.

Auto insurance non-renewal

Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days notice and explain the reason for not renewing before it drops your policy (the exact timeframes and rules will depend on the state in which you live).

There are a number of reasons an insurance company may choose not to renew a policy, and it may have nothing to do with you personally. For example, your insurer may have decided to drop that particular type of insurance or to write fewer policies where you live.

However, a nonrenewal can also be due to your record or your actions. Doing something to considerably raise the insurance company’s risk—like driving drunk—would be cause for non-renewal.

If you’ve been told your policy is not being renewed and you want a further explanation or think the reason is unfair, call the insurance company’s consumer affairs division. If you don’t get a satisfactory explanation, contact your state insurance department.

Note that nonrenewal at one insurer doesn’t necessarily mean you’ll be charged a higher premium at another insurance company.

Should I Insure Household Help

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Accidents happen—and if they happen to people you’ve hired to come into your home or onto your property to work, you’re financially liable. It makes sense to understand how you’re already covered and when to further insure household help.


Appropriate and adequate insurance coverage depends on the nature of the employee’s position and the assets you’re protecting. As always, consult your insurance professional with any questions or requested changes to your policy. Here’s some information to get you started.

If you contract a worker with an outside firm

For many household and in-home care needs—for example, for a nurse, a physical therapist, a cook or a housekeeper—you may decide to contract with a business or agency that provides these types of pros.

  • Determine who is the employer. When you’re dealing with a firm or agency, in most cases the worker you hired is an employee of that business and insured under their auspices. (If for some reason you’re the employer, read on to the situations below and talk to your insurance professional.)
  • Ask the firm for a copy of its certificates of insurance, which provides documentation that the firm provides workers compensation for its employees. If the firm also offers health and disability insurance, you can feel comfortable that any worker injured on your property will receive medical treatment.

If you hire occasional workers

If you occasionally hire a babysitter to take care of your children or a young person in your neighborhood to rake leaves or clean the garage, review your current insurance and:

  • Learn about the current no-fault medical coverage in your homeowners policy or renters insurance. If someone other than an immediate family member is injured on your property, you can submit their medical bills directly to your insurance company for reimbursement. Make sure your policy limits are adequate to your needs.
  • Check your liability insurance. Depending on your current homeowners and renters coverage and your assets, you may elect to raise the amount or buy more coverage through an umbrella liability policy.

If you hire permanent full- or part-time employees

If you hire one or more home workers on a permanent, regularly scheduled basis, consider purchasing workers compensation insurance. Workers comp provides coverage for medical care and physical rehabilitation for an employee who is injured on the job, as well as lost wages if the employee is severely hurt and no longer able to work. In the worst-case scenario, it also provides death benefits.

  • Find out if your state requires workers compensation for the type of employees you’re hiring (ex. housekeeper, gardener, etc.). Your state workers compensation board or agency can provide this information.
  • Determine the mandatory requirements workers comp coverage. For instance, some states may require an employer who hires a certain number of employees to buy workers compensation. In other states, the determination might be based on the number of hours an employee would work.
  • Don’t ignore the law. It’s important to note that if you’re required by law to buy workers compensation insurance and you fail to do so, your homeowners or other applicable policies will not pay for any fines, court awards or any other penalties against you.

If your employee is going to drive your car

Whatever the nature of the employee relationship, it’s important to inform your auto insurance company if the person you hire is going to drive your car. For example, if you’re going to lend your car to a worker to pick up groceries or take an aging parent to the doctor, your insurer needs to know about the additional driver for auto insurance purposes. Whatever the employee car usage, your insurer can explain your options.

Next steps link: Do you anticipate lots of workers because you’re renovating? Know the insurance implications of remodeling your home.

Dog Bites & Homeowners Insurance

Courtesy of iii.org

Almost 90 million dogs are owned as pets in the United States according to a 2017-2018 survey by the American Pet Products Association.

According to the Centers for Disease Control and Prevention, about 4.5 million people are bitten by dogs each year. Among children, the rate of dog-bite–related injuries is highest for those 5 to 9 years old. Over half of dog-bite injuries occur at home with dogs that are familiar to us.

Homeowners and renters insurance policies typically cover dog bite liability legal expenses, up to the liability limits (typically $100,000 to $300,000). If the claim exceeds the limit, the dog owner is responsible for all damages above that amount.

Dog bite liability and homeowners insurance

Some insurance companies will not insure homeowners who own certain breeds of dogs categorized as dangerous, such as pit bulls. Others decide on a case-by-case basis, depending on whether an individual dog, regardless of its breed has been deemed vicious. Some insurers do not ask the breed of a dog owned when writing or renewing homeowners insurance and do not track the breed of dogs involved in dog bite incidents. However, once a dog has bitten someone, it poses an increased risk. In that instance, the insurance company may charge a higher premium, nonrenew the homeowner’s insurance policy or exclude the dog from coverage.

Some insurers are taking steps to limit their exposure to such losses. Some companies require dog owners to sign liability waivers for dog bites, while others charge more for owners of breeds such as pit bulls and Rottweilers and others are not offering insurance to dog owners at all. Some will cover a pet if the owner takes the dog to classes aimed at modifying its behavior or if the dog is restrained with a muzzle, chain or cage.

Homeowners insurance liability claims

  • Homeowners insurers paid out over $686 million in liability claims related to dog bites and other dog-related injuries in 2017, according to the Insurance Information Institute (I.I.I.) and State Farm®.
  • An analysis of homeowners insurance data by the I.I.I. found that the number of dog bite claims nationwide increased to 18,522 in 2017 compared to 18,123 in 2016—a 2.2 percent increase.
  • The average cost per claim for the year increased by 11.5 percent. The average cost paid out for dog bite claims nationwide was $37,051 in 2017, compared with $33,230 in 2016. The average cost per claim nationally has risen more than 90 percent from 2003 to 2017, due to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, which are trending upwards.
  • California continued to have the largest number of claims in the United States, at 2,228 in 2017, an increase from 1,934 in 2016. The state with the second highest number of claims was Florida at 1,345. Florida had the highest average cost per claim at $44,700. The trend in higher costs per claim is attributable not only to dog bites but also to dogs knocking down children, cyclists, the elderly, etc., which can result in injuries that impact the potential severity of the losses.

State and local legislation

Dog owners are liable for injuries their pets cause if the owner knew the dog had a tendency to bite. In some states, statutes make the owners liable whether or not they knew the dog had a tendency to bite; in others, owners can be held responsible only if they knew or should have known their dogs had a propensity to bite. Some states and municipalities have “breed specific” statutes that identify breeds such as pit bulls as dangerous; in others individual dogs can be designated as vicious. At least two states, Pennsylvania and Michigan, have laws that prohibit insurers from canceling or denying coverage to the owners of particular dog breeds. In Ohio, for example, owners of dogs that have been classified as vicious are required to purchase at least $100,000 of liability insurance.

The American Kennel Club reports that while many municipalities have enacted bans on specific breeds, several states have laws barring municipalities and counties from targeting individual breeds.

  • Dog owners’ liability: There are three kinds of law that impose liability on owners:
    1) A dog-bite statute: where the dog owner is automatically liable for any injury or property damage the dog causes without provocation.
    2) The one-bite rule: where the dog owner is responsible for an injury caused by a dog if the owner knew the dog was likely to cause that type of injury—in this case, the victim must prove the owner knew the dog was dangerous.
    3) Negligence laws: where the dog owner is liable if the injury occurred because the dog owner was unreasonably careless (negligent) in controlling the dog.
  • Criminal penalties: On January 26, 2001, two Presa Canario dogs attacked and killed Diane Whipple in the doorway of her San Francisco, California, apartment. Marjorie Knoller, the owner of the dogs, was convicted of involuntary manslaughter for keeping a mischievous dog that killed a person. She was sentenced to four years in prison for involuntary manslaughter and was ordered to pay $6,800 in restitution. Her husband, Robert Noel, was convicted on lesser charges but also received a four-year prison sentence. Knoller became the first Californian convicted of murder for a dog’s actions. This was only the third time such charges have been upheld in the United States, the first coming in Kansas in 1997.

Car Insurance Terms-What They Mean

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Don’t be intimidated by specialized insurance language. Below you’ll find definitions of some of the most common terms used when dealing with auto insurance.

Adjuster

An insurance company employee or contractor who reviews the damages and injuries caused by an accident and okays claims payments.

Bodily injury liability

Usually mandated by state law, this insurance provision covers costs associated with injuries and death that you or another driver causes while driving your car.

Claim

The formal request to an insurer for payment under the terms of your policy.

Collision coverage

Optional coverage that reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object?e.g., a tree or guardrail?when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.

Comprehensive coverage

Coverage against theft and damage caused by an incident other than a collision, such as fire, vandalism, hail, flood, falling rocks and other events.

Credit-based insurance score

A confidential ranking developed by insurance companies based on your credit history that may be used to determine the cost of your insurance policy. A good credit score?an indication of responsible money management?has been shown to be a good predictor of whether someone is more likely to file an insurance claim.

Deductible

The amount subtracted from an insurance payout that you are responsible for. For instance, if you have a $500 deductible for your collision coverage, and an accident causes $2,000 of damage to your car, you pay $500 and your insurance covers the remaining $1,500. There is no deductible for your liability coverage.

Defensive driving

Driving in a way that reduces that chance of an accident. Defensive driving techniques include maintaining a safe following distance, scanning the road ahead, keeping both hands on the wheel and much more. If you take a defensive driving course, you may be able to get a discount on your auto insurance.

Diminished value

The value of a car after it has been in an accident and repaired. Even though the car may look fine, it is worth less than its value before the accident. If you’re the victim of an accident, you may be able to collect payment for the diminished value of your car, beyond the repair costs.

Distracted driving

Driving your car while distracted is dangerous and often illegal. Texting and using your phone are the most well-known distractions, but fiddling with your radio, looking at a map or GPS system, eating and drinking, talking to passengers and applying makeup also take your eyes off the road?and raise the risk of getting in an accident. Traffic tickets for texting or using your phone, as well as accidents caused by distracted driving, can drive up your insurance rates.

Gap insurance

As soon as you drive a new car off the dealer’s lot, its value begins to depreciate. And if you lease or finance the car, you’ll be responsible for the full amount you still owe should something happen to it, but your collision and comprehensive insurance will only cover the actual market value of the car. Gap insurance covers the difference between these two amounts?what the vehicle is worth and what you owe on it. The coverage can be purchased from the auto dealer or directly from your insurance company. For leased vehicles, gap insurance is usually rolled into the lease payments.

Liability

Your legal obligation to reimburse others for damage or injury that you cause. Nearly every state requires that you have liability insurance for your car so that if you or someone driving your car causes an accident, the victim will receive appropriate compensation.

Medical payments/Personal injury protection (PIP)

Coverage that provides reimbursement for medical expenses for injuries to you or your passengers stemming from an accident where you or someone using your car is at fault. This coverage may also pay lost wages and other related expenses.

OEM and generic auto crash parts

Crash parts are those that form the outside “skin” of a vehicle?such as fenders, hoods and doors panels?and are the most frequently damaged in auto accidents. Replacement parts provided by the manufacturer of your car are called original equipment manufacturer (OEM) parts. Parts that are made by another manufacturer are known as generic or aftermarket crash parts and are generally a lower cost, equally safe match for an OEM auto part.

Premium

The cost of your insurance policy, payable annually, semiannually or in monthly installments.

Property damage liability

Insurance coverage that reimburses others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.

Totaled

A car is totaled if the cost of repairs exceeds the car’s value. If your car is totaled and you have comprehensive and/or collision coverage, an insurer will pay you the full market value of your car or the limit of the policy, less your deductible if you are at fault.

Umbrella liability

Extra coverage beyond the limits of your regular liability policies. This will provide an additional layer of protection for your assets in the event you are sued. Your umbrella policy also covers claims that fall under your homeowners insurance policy.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage will reimburse you when an accident is caused by a driver who lacks insurance?or in the case of a hit-and-run. In the case of a serious accident, underinsured motorist coverage will make up the difference between your losses and the coverage limit of the policy held by the driver who causes the accident.

Motorcycle Insurance Coverage

Courtesy of http://www.iii.org/article/motorcycle-insurance. Choosing the right insurance policy is much like choosing the right motorcycle. You want it to fit your needs and lifestyle, but at the same time be within your budget. Although most states require you to carry a minimum amount of liability coverage, other types of coverage are usually optional. Always ask your insurance agent or company representative which laws apply in your state.

In order to find out what coverage is best for you, it is important to understand all the options available.

Liability coverage

Liability insurance covers bodily injury and property damage that you may cause to other people involved in an accident. It doesn’t cover you or your motorcycle. Find out if your coverage includes Guest Passenger Liability, which provides protection in the event that a passenger is injured on the motorcycle. Whether or not this is included depends on the laws of your state and the company issuing the policy.

Collision coverage

Collision insurance covers damage to your motorcycle if you are involved in an accident. Your insurance company pays for damages, minus your deductible, caused when you collide with another vehicle or object. Collision insurance usually covers the book value of the motorcycle before the loss occurred.

Comprehensive coverage

Comprehensive coverage pays for damages caused by an event other than a collision, such as fire, theft or vandalism. However, just like collision coverage, your insurance company will pay for damages, minus your deductible, and will cover only the book value of the motorcycle.

Keep in mind most comprehensive and collision coverages will only cover the factory standard parts on your motorcycle. If you decide to add on any optional accessories such as chrome parts, a custom paint job, trailers or sidecars, you should look into obtaining additional or optional equipment coverage.

Uninsured/underinsured motorist coverage

Uninsured/underinsured Motorist Coverage covers damages to you and your property caused by another driver who either doesn’t have insurance (uninsured) or doesn’t have adequate insurance (underinsured) to cover your damages.

This coverage typically pays for medical treatment, lost wages and other damages. If your uninsured/underinsured motorist coverage includes property damage, then your motorcycle would also be covered under the same circumstances. Check with your insurance professional to see if property damage is included or needs to be purchased separately.

Tips for the cost-conscious rider

Many factors can play a role in determining what your insurance costs will be such as your age, your driving record, where you live and the type of motorcycle you own, or being a graduate of a rider-training course.

  • Many companies offer discounts from 10 to 15 percent on motorcycle insurance for graduates of training courses, such as the Motorcycle Safety Foundation (MSF) rider course. Riders under the age of 25, usually considered a higher risk, may see some savings by taking this course. It?s also a good idea for cyclists who have already had accidents.
  • Maintaining a good driving record with no violations will also help reduce your premiums.
  • In many northern states, riders may save money by buying a “lay-up” policy. With a lay-up policy, all coverage except comprehensive is suspended during winter months.
  • Find out what discounts your insurance representative offers. Multibike discounts for those insuring more than one bike, organization discounts, if you?re a member of a motorcycle association, and mature rider discounts for experienced riders, are just a few possibilities. Discounts can range anywhere from 10 percent to 20 percent, depending on the company and your state. Availability and qualifications for discounts vary from company to company and state to state.
  • Keep in mind that the type, style (such as a sports bike vs. a cruiser) and age of the motorcycle, as well as the number of miles you drive a year and where you store your bike may also affect how much you pay for your premium.

Home-Based Business & Insurance

Courtesy of iii.orgWhether you’re running a part-time, seasonal or full-time business from your home, you’ll want to carefully consider your risks and insurance needs. Starting a business—even at home—can be a challenging venture, and having the right insurance can provide a financial safety net and peace of mind.

Your insurance choices should, in part, be based on the type of business you operate. For instance, if you’re a sole practitioner home-based accountant, you’ll have very different insurance needs than your neighbor who runs a childcare business. When considering insurance for your business, here are some questions to ask yourself:

  • What type of business do I run? What are the potential risks faced by your type of business?
  • What is the value of my business property? Do you have expensive equipment, such as cameras or commercial printers? Do you stock valuable business inventory, such as gemstones?
  • Does my business have employees?
  • Do customers or contractors visit my business at my home?
  • Do I use my car or other vehicles in the course of my business operations?
  • Does my business store customers’ financial and personal information on a computer or through a cloud computing service?

The answers to these questions will guide which types of insurance to purchase—and how much coverage you’ll need. For your home-based business, the main types of insurance to consider include the following:

Property and liability insurance

Depending on the nature of your home-based business, you’ll need insurance to protect the value of your business property from loss due to theft, fire or other insured perils. You’ll also need liability protection to cover costs if someone is injured as a result of visiting your business or using your product or service. Your homeowners insurance may provide some protection for your business, but it may not be sufficient. Options for property and liability insurance for home-based businesses include:

  • Adding an “endorsement” to your homeowners policy
  • Stand-alone home-based business insurance policies
  • A Business Owners Policy—or BOP—which combines several types of coverage

Business vehicle insurance

Your personal auto insurance may provide coverage for limited business use of your car. But if your business owns vehicles or your personal vehicle is primarily used for business purposes, you’ll need business vehicle insurance.

Workers compensation insurance

If you have employees, you’ll want to strongly consider purchasing workers compensation insurance to cover costs if an employee is hurt on the job. Workers compensation insurance provides wage replacement and medical benefits to employees injured in the course of employment, in exchange for relinquishing the right to sue the employer. In some states, workers compensation insurance is mandatory, so be sure to check your state’s workers compensation website for local requirements.

Other types of insurance may be suitable for your home-based business as well. Your insurance professional can help you evaluate your needs and select insurance to meet your budget.