Top 10 Insurance FAQs

1. Do I need to purchase the additional rental car coverage?
When you travel, the rental car company will likely offer you additional coverage for physical damage to the vehicle. Your personal auto policy does provide coverage for physical damage liability to unowned vehicles, but that would require you to file a claim against your own policy for a vehicle that you don’t own. We always recommend our clients avoid this hassle and potential increased cost on their personal auto policy
for three years from the date of incident, and simply choose to pay for the extra coverage. Peace of mind is worth a few extra dollars per day that you are traveling.

 2. If I’m driving for my job/business, and something happens, do I have coverage for my vehicle?
If you are driving your personal vehicle on an errand or a sales call for your employer, you will want to make sure that they have “Non Owned & Hired Auto Coverage” on their business insurance policies. If you are a business owner yourself, and you use the same vehicle for both personal and business use, you should have the vehicle(s) rated on your personal auto policy for “business use.” This means that the vehicle will enjoy
coverage even when it’s being used for business purposes. A Commercial Auto policy is only necessary when a vehicle is owned by a business, or one primarily uses it.

3. What is an Umbrella policy, and do I need one?
A Personal Liability Umbrella policy, commonly called simply an “Umbrella policy”, provides an extra layer of protection above and beyond your other personal policies, like your home and auto insurance, as well as any other personal policies you have, such as a motorcycle, RV, boat or rental property.

There are 4 categories of people who we strongly recommend should carry an Umbrella policy.
1) Anyone with a pool or trampoline in their yard.
2) Anyone with drivers under 21 in their home.
3) Anyone in a public facing position at work.
4) Anyone who owns investment properties.

4. What is excluded from coverage in my policies?
Every company handles things differently, so you should definitely talk with your local agent and ask about exclusions, and available endorsements to get extra coverage you’re concerned about. With homeowner’s policies, the most common exclusions are for willful non-reporting of damage in a timely manner by the policyholder, slow water leaks that take weeks/months to become a real problem, or foundation damage that is caused by shifting or settling soil. Also, flood damage is usually excluded, as this is covered under a separate policy through the National Flood Insurance Program.

5. Which deductibles should I select?
The general idea with choosing the right deductibles is that you want the deductibles as high as you can reasonably afford for coverage types that you are unlikely to use on any regular basis, and then as small as possible for coverage types that you are likely to need to use more often. These answers will be different for every client or local area, but here in Texas we have many different types of weather incidents to be concerned about, so we always recommend the lowest possible weather related deductibles.
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6. Can my friend/family drive my car? Can I drive theirs?
There are two answers to this question, one for matters of liability and the other for matters of physical damage to the vehicle in question. Generally speaking, for liability claims, the insurance for the person driving the vehicle will be “primary” or first to act. The insurance for the person who owns the vehicle will be “secondary” or excess, in case the damages exceed the limits of coverage on the primary policy. For physical
damage claims, the insurance for the owner of the vehicle provides the coverage. As the saying goes, “when you loan your car, you also loan your insurance”, but only with regard to physical damage. Also, any licensed driver legally allowed to drive can be covered under this provision. However, there is generally no coverage for someone who steals the car, or otherwise drives the car without the permission of the owner.

7. I have life insurance through my job, why do I need more?
Many people are surprised to learn that their life insurance and other benefits through their employer do not follow them once they resign or are terminated. Further, in most situations, the coverage available through your employer is capped at 2-3 times your annual salary. It is critically important to secure privately owned life insurance, especially if you are a homeowner, a business owner or if you have kids.

8. Do I need insurance on my ATV, golf cart, etc.?
Far too often, vehicles that aren’t regularly driving on public streets are entirely overlooked when enacting an insurance program. The fact is that any motorized vehicle, of any value, has the potential to cause bodily harm or property damage to another party, and therefore should be properly insured.

9. How is the value of my home determined?
This is definitely one of the most frequent questions we get from our new or prospective clients. It is one of the most common misconceptions as well. On any piece of real estate, there are three separate valuations that can exist at any time. They are the:

1) The market value; what someone is willing to pay to purchase the property. This valuation is the most unstable and variable.
2) The appraised value; the valuation assigned by the municipal or county appraiser’s office, used to calculate the amount of property taxes due.
3) The replacement value; the amount necessary to completely rebuild the entire property from scratch. This is the only valuation relevant to your homeowner’s policy.

10. Is my ________ covered by our policy?
Some categories of personal property have limits of coverage on the basic policy. Generally, items of jewelry above $1,000 in value, some electronics, firearms, silverware, fine art and musical instruments should be added to a “personal articles floater” that provides specific coverage based on an agreed or appraised value.