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Home & Auto Insurance Questions

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When is it no longer worth carrying full coverage insurance on your vehicle?

Do you have discounts on combining home and auto insurance?

In general, what is an appropriate amount of renter’s insurance?

Parents have a child that no longer lives with them and is not enrolled in school.  They buy a car for their child because they can’t afford, they also add this vehicle to their personal auto insurance policy.  Child is in accident, will the insurance company pay out on the claim?  If they pay out on the claim will they cancel the policy?

What are the minimum requirements for auto insurance?

We have insurance on our primary home but are renting a mostly furnished apartment for a work assignment.  We had renter's insurance for the last assignment but we provided all our own furnishings. Should we have renter's insurance for a furnished apartment? What does the renter's insurance actually cover?

One of the reasons our insurance went up is because of our age (72). I have gotten proof that the older people today in their 70's are better drivers than our predecessors. I’m sure you know that too. Why does old age play a factor in increased auto rates?

 

 

 


  

Q.
When is it no longer worth carrying full coverage insurance on your vehicle?
A.
Determining this point takes a bit of math, but it’s fairly straight-forward, so no worries! First, look at your auto policy “declarations page” for the premium you’re paying for Collision coverage.  Now, determine your deductible for that coverage.  Add the two together.  This total represents your cost.  Next, determine the value of your vehicle.  Various sources, such as NADA, are tools to obtain the value.  Now, compare the two numbers.  If they’re close to each other, you may be at the tipping point where carrying collision does not make sense.  If the car is still worth far more than your cost, better keep it.
 


Example 1:

In Example 1, you would receive $4000 for the Pontiac, if it was totaled ($5000 less your deductible.)  You’ve invested $513 in premium for that---a good investment.


Example 2:

In Example 2, you would receive $1325 for the Trailblazer, if it was totaled ($2325 less your deductible.)  You invested $602 in premium.  At this point, it’s questionable whether buying collision is worth it.

Don’t like math?  Question whether you’re calculating it correctly?  We’re happy to do the analysis for you and talk you through the best decision.  We are just a phone call away [800-241-5133] or click here to contact us!

A final PS.  We hardly ever recommend that you go without Other Than Collision coverage.  This coverage pays for the car if it is stolen or vandalized.  The premium is fairly inexpensive.

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Q.
Do you have discounts on combining home and auto insurance?
A.

Yes.  Every company we represent offers a discount between 10% and 20% if you write both home and auto.  Oftentimes, drivers who don’t own a house, but just rent, can get renters insurance with the savings, so it’s definitely worth investigating!

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Q.
In general, what is an appropriate amount of renter’s insurance?
A.

The biggest mistake people make when thinking about the value of their “stuff” is to only consider furniture. Think about every single thing that you moved into your apartment—towels, dishes, DVDs, clothes, toiletries, pots and pans.  It adds up to more than you’d think!  Also remember that even though your furniture may be used, if you buy Replacement Cost coverage, you’ll get today’s cost to replace the furniture—without depreciation.  We recommend a minimum of $35,000; lots of people buy $50,000.

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Q.
Parents have a child that no longer lives with them and is not enrolled in school.  They buy a car for their child because they can’t afford, they also add this vehicle to their personal auto insurance policy.  Child is in accident, will the insurance company pay out on the claim?  If they pay out on the claim will they cancel the policy?
A.

Great question, and it happens all the time, so let’s clear this up. The stipulation in your scenario that makes all the difference is the “child no longer lives with them.” When that adult child moves out of the parent home and is removed from the parent’s policy, s/he ceases to be a resident relative, and coverage for that child restricts to permissive driver coverage.  Now, will a claim be paid?  It depends on the carrier and policy language.  Some take a very hard stance and will deny coverage; others will provide coverage, but demand that the car be removed from the policy or risk cancellation.

How should insurance be written for this scenario?  The parent can still buy the car for the child.  The parent can even pay the insurance premium for the child, if desired.  Here is the method that protects all parties?



Will the insurance be more expensive vs. on the parent’s policy?  Likely, yes.  However, would you rather pay a little more premium and have no worries about a claim being covered OR pay a lesser premium and come up empty-handed at claim time?

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Q.
What are the minimum requirements for auto insurance?
A.

Ohio recently increased its minimum limits of auto insurance liability to $25,000 bodily injury per person and $50,000 bodily injury per accident; $25,000 property damage per accident. In plain English, this means that if you injure someone in an accident, you have $25,000 to pay for medical bills per person injured.  If you damage someone’s car or property (fence, building, etc.), you have $25,000 to pay for the damage.

In today’s terms, $25,000 doesn’t go very far for medical bills, and we all know cars on the road that cost more than $25,000.  These minimum limits don’t adequately protect you, in our opinion.  Our minimum recommendation is $300,000 for bodily injury and property damage, but most of our clients buy $500,000.

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Q.
We have insurance on our primary home but are renting a mostly furnished apartment for a work assignment.  We had renter's insurance for the last assignment but we provided all our own furnishings. Should we have renter's insurance for a furnished apartment? What does the renter's insurance actually cover?
A.

There are two coverage parts to renters insurance: contents and liability.  Your primary home policy provides coverage for your contents anywhere in the world.  (Some carriers limit the contents coverage to 10% of your value when at a leased location.)  Additionally, your primary home policy can be endorsed to provide liability coverage for your temporary apartment.  With these two extensions from your primary home insurance, buying a separate renters policy is often unnecessary.

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Q.
One of the reasons our insurance went up is because of our age (72). I have gotten proof that the older people today in their 70's are better drivers than our predecessors. I’m sure you know that too. Why does old age play a factor in increased auto rates?
A.

Carriers continually review their rate structure against claim history for each demographic group. Rates are calculated based on age, driving record, geographic area, and type of vehicle.  Today, rates are calculated based on all of those things PLUS a predictive tool called insurance score.  The insurance score allows carriers to develop pricing based upon the likelihood of losses.  All of this makes it harder to determine what single thing caused rates to increase for an individual.  In most cases, it’s the combination of all of these factors.

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