Why do I need to buy insurance?

• Protects your assets against attachment as a result of a court award.
• Provides for cost of defense when you are sued.
• Allows you to purchase such high value items as a car or a home by insuring the collateral on behalf of the financial institution that lent you the money.
• Provides financial security for your family in the event of your death.
• Provides for the health care of you and your family through systematic payments.
• Allows you to save for retirement while deferring interest payments to a time when your income is lower, thus reducing your tax payments.
• Allows you to remain financially solvent when you’re ill and can’t work.

What factors affect the insurance premiums I pay?

• Claims activity including such costs as medical care, auto body repair, construction, legal defense, jury awards, claims adjustment, and insurance fraud.
• Overhead including rent, utilities, employee salaries and benefits, office supplies, equipment, and furniture.
• Investment income.

“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 and Liability.

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 covered?

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.

How expensive is renters insurance?

Renters insurance is typically available for as little as $100 a year.

Does my landlord’s insurance protect me?

Generally, no. The property owner’s insurance covers the building itself and seldom a tenant’s possessions or liability. Clarify this with your landlord before signing a lease.

Is my landlord is liable if someone trips in my apartment and gets injured?

Again, the owner’s policy may specifically exclude liability for something that occurs within your rented residence. You could be held liable for injury to another person or damage to another person’s property if the incident occurred within your rented residence.

I’m just getting my business started. Do I need insurance immediately?

Yes. Your chance of suffering a loss begins with the first day of business. If you suffer a loss and have no insurance or have improper or insufficient coverage, your insurance agent can do little, if anything, to help you.

Also, many states and local jurisdictions require businesses to have insurance to begin operating. And if you rent space for your business, your landlord probably requires you to obtain adequate insurance.

I don’t have any major business assets. Why do I need insurance?

Every business has some property. When you think about it, your business is your property. Just like your home and your car, your business needs to be protected from loss, damage, and liability. In addition, your business is your source of income, so you need protection from the potential loss of that income.

Does insurance coverage vary for different businesses?

It can. Many small businesses are now insured under package policies that cover the major property and liability exposures as well as loss of income. A common package policy used by many small businesses is called the Businessowners Policy (BOP).

Generally, these package policies provide the small-business owner more complete coverage at a lower price than separate policies for each type of insurance needed. Your agent can help you decide which policy or policies are right for your business. Additional coverage for property, liability or perils or conditions otherwise excluded (e.g., flood protection) can be purchased as endorsements to a standard policy or as a separate, second policy called a difference-in-conditions (DIC) policy.

Because businesses vary, it is impossible to have a standard policy to cover all contingencies. Also, some businesses, regardless of their size, do not fit the profile of a standard businessowners policy. For example, restaurants, wholesalers and garages have special liability needs that are not met in the standard businessowners policy. Your insurance agent can advise you of the best policy (or policies) to protect you and your business.

I’m a college student. Am I still covered by my parents’ policies?

It depends on the policy and its terms. For example, most Health insurance policies cover insureds’ children up to age 18, or up to 22 if the child continues as a full-time student. If you’re over 18 and not a full-time student, you’ll need your own Health insurance policy.

What kinds of risks do college students face?

College students face many new risks as they head off to school: theft of personal property, auto accidents due to driving long distances, and risks related to attending and giving parties.

How extensive are these risks?

College and university campuses aren’t immune to property crime. A 1995 FBI study reported that there were more than 100,000 property crimes on college nationwide, including burglary, theft, motor vehicle theft, and arson. Thieves took an average of $1,251 of property per offense that same year.

At least one in 10 college students revealed that they had caused an auto accident in the last two years. One in four had a speeding ticket or other moving violation. These and other offenses contribute to higher Auto insurance premiums for students.

How can an uninsured loss affect a student or parent?

An uninsured loss such as the theft of a laptop, sudden illness or a liability claim stemming from a party mishap, can deal a devastating blow to a college student’s limited bank account or the financial livelihood of a parent already struggling with high tuition bills. And contrary to popular belief, insurance can be very affordable. The risk of financial loss due to property and liability losses can be eliminated or significantly reduced with proper insurance.

College students and parents should seek information together on protecting themselves and their property with renters, auto and health insurance from an experienced, professional independent insurance agent who will help them evaluate their risks and purchase the appropriate coverage.

Important Note: This website provides only a simplified description of these coverages and is not a statement of contract. For complete details of coverages, conditions, limits, and losses not covered, be sure to read the policy, including all endorsements.