Top 10 Insurance FAQs
What types of things impact my insurance rate? (Red car myth!)
There are tons of factors that influence your insurance rates! Some of the most impactful are; your home (or garage) address, age, gender, driving history, claim history, whether you are currently insured or not, the limits of the coverage you have in place prior to switching, and even your credit score.
A few factors that are thought to impact your rate, but do not actually change it are the color of your car, your race, religious views, or employment status. Remember, your situation and companies' rating processes change all the time, so it’s helpful to visit with your insurance agent to review your protection plan for the best rate!
2. Why does my bill keep changing every month?
Typically, when you start your new policy your rate should be locked in for either 6 or 12 months. However, some companies do not complete thorough underwriting (checking for tickets/accidents) on the front end. This can cause your issued policy rate to be different than what your agent may have quoted, which makes your monthly bill fluctuate at the start of your renewal. If properly quoted, your rate should stay the same through the entire renewal unless you move addresses, change your vehicle and/or household drivers, or change your coverage mid-term.
3. What is the difference between comprehensive and collision coverage for my car?
Comprehensive and collision coverage are what most people refer to as “full coverage” for car insurance. Comprehensive protects the market value* of the vehicle against damage from theft, fire, vandalism, wind, hail, storm, glass breakage, hitting a flying object, or hitting an animal. Collision damage also protects the market value* of your vehicle from colliding with any freestanding object, including other vehicles - it also protects against hit and run or uninsured damage to your vehicle. It’s best to check with your insurance agent if you are requesting “full coverage” to have them explain what exactly is and is not covered on your policy before you experience a claim.
*Market Value is the depreciated value, not the cost to replace the vehicle new.
4. How do I file a claim?
For a car accident or damage: It is best to start the claims process through the at-fault party’s insurance company and alert your agent, too, if the accident was not your fault. If it is not possible to determine fault from the accident, call your insurance company claims team for their guidance on filing a claim to determine who is liable.
For damage to your home, condo, apartment, and/or belongings: It is best to determine the cause of loss and get a rough estimate on the cost to repair or replace the damages prior to starting the claims process. This prevents your loss history from receiving a negative mark if the cause of loss is not covered or the damage amount does not exceed your deductible. Once you confirm it is worthwhile to submit a claim, it is best to call your insurance company to have their claim specialists start the process with you.
Your insurance agent should be there to help advocate for you through either type of claim process, so always loop them in when you are experiencing a loss or damage!
5. If I file a claim will my rates go up and/or will I get dropped?
Filing a claim will have different effects on your policy that are dependent on the insurance company you're protected through and the type of policy you are making a claim against. It is common to get dropped on your homeowners or condo insurance coverage if you file a claim within the first few years of having the policy, however every company operates independently on making these decisions. It is less likely for you to get dropped after one accident on your car insurance, though it is also company dependent. For most companies, regardless of the policy type, you can safely assume that your rates will increase at your next policy renewal following an at-fault car insurance claim or a home/condo/renters claim.
6. How is the amount determined for the payout on my claim?
The payout amount for repairing or replacing the damages you’ve suffered through the claims process is handled by claim experts. They use live data to determine the value of goods and vehicles for loss payout purposes. Your home and/or belongings will typically be covered at replacement cost, which is the cost to replace the item in today’s dollars rather than its depreciated value (the amount you could get for selling the used item). Your car will either be repaired or considered a total loss payout from a claim. It will get repaired when the cost to do the repairs is less than its current market value (same as depreciated value). Unlike your home, you will not get paid the cost to replace your vehicle new in today’s dollars after a car insurance total loss.
7. How would my special equipment (For example, tools, sports equipment, music gear, jewelry) be covered on my renters/homeowners policy?
A good rule of thumb to follow protecting your belongings is “if I use the item to make money, it is either not covered by my homeowners/renters OR it is covered with a limitation”. High-value, hard-to-replace items can be covered by your traditional homeowners policy under your personal property limit, however we definitely recommend exploring a personal articles policy or rider on your home insurance for specific coverage on these belongings to provide the best protection to them with no limitations or restrictions.
8. If a tree on my property falls on my neighbor’s home or property, who is responsible?
This coverage myth is tricky! It really depends on the health of the tree, aka if there was negligence by the homeowner. If the tree was healthy and it came down unexpectedly, the owner of the damaged property is responsible. If the tree was not healthy and needed to be taken down, the homeowner where the tree lives is responsible due to negligence of properly maintaining their property.
9. How are my pets protected by my car and home insurance?
Insurance companies see pets as property. If someone else causes a car accident and your pet is injured, the other party's property damage coverage (considered a part of liability coverage) would cover the medical expenses of your dog or cat. However, if you are at fault in the accident, there is no coverage for your pet.
Renters and homeowners insurance may cover pet damage as part of your policy's liability coverage. This may help protect your finances if your pet injures someone else or damages their property. However, renters insurance won't cover damage to your own property that's caused by your pet. In most instances, your pet’s injuries are not covered by your homeowners’ insurance, which is why it is important to shop for Pet Insurance for your new puppy or kitten!
10. What are the advantages and disadvantages of having all of my coverage through one carrier?
The advantages of having your coverage with one carrier include, having one company to call if something goes wrong and usually benefiting from multi-policy discounts.
The disadvantage of having your coverage through one carrier is you could be missing out on greater savings or a more robust policy offering if there is a company, for example Openly, that only offers one line of coverage and has the most competitive rating regardless of multi-policy discounts.