We recently asked our fans to tell us the most common questions about insurance that they have or that they hear from others. Here are some simple answers for those questions.
• Why did my premium go up when I haven’t had any claims?
Premiums may have gone up for all insureds in your class. Insurance involves a lot of people sharing the losses of a few people. When, overall, losses go up, your share (in the form of your insurance premium) goes up.
• Why did the amount of coverage on my house go up when the value has gone down?
That depends on how you define “value.” If you’re talking about market values which have declined in the current real estate market in the past couple of years, the resale value of your home may be depressed. However, insurance covers the cost to rebuild or replace your home or property. The real estate market has little to do with that. If construction costs rise, your policy limits should increase accordingly.
• Do I need to buy the coverage when I rent a car?
We suggest that you purchase the loss damage waiver in case the vehicle is damaged. While most auto insurance extends to rental cars, your policy probably has exclusions that aren’t in the loss damage waiver. Likewise, there are things the loss damage waiver doesn’t cover that your insurance does. Having both makes it less likely that you will have an uncovered loss.
• Why did my business liability insurance after 18 years and never had a claim go from $17,000 a year to almost $30,000 a year?
Premiums may have gone up for all insureds in your class. Insurance involves a lot of people sharing the losses of a few people. When, overall, losses go up, your share (in the form of your insurance premium) goes up. In addition, your premium may be based on payroll, sales, or some other factor that has increased substantially. If your business is growing rapidly, your exposure to loss probably is too. Your insurance premium may be reflecting that growth.
• Is it true a red sports car costs more to insure than a black sports car (same year, make & model)?
Nope. The color of your car has absolutely nothing to do with the cost of insurance. This myth may be based on the premise that a red sports car is flashier than a black one and might attract the attention of local law enforcement if you’re driving a bit too fast. Getting speeding tickets almost certainly will increase your insurance costs.
• Why does my car insurance go up when my car keeps getting older?
The component of your premium that pays for physical damage claims to your car usually goes down with age. However, other coverages like liability might go up. In addition, experience for that model car or for all insured cars in general may be going up so your increase is similar to that being experienced by others insured by your insurance company.
• What’s my credit got to do with my insurance?
Statistical studies have demonstrated that loss experience is directly proportional to an insured’s credit score. For that reason, some insurance companies use that as a factor in establishing rates if permitted by law in your state.
Courtesy: The Trusted Choice
Notifying employees of health coverage options – materials to help employers meet the FLSA mandate by Oct. 1, 2013.
A new provision of the Fair Labor Standards Act (FLSA) requires that all employees must receive notification of the health coverage options becoming available in 2014. The FLSA outlines specific information that employers must provide all employees by Oct. 1, 2013. The goal is to help employees determine if they should opt out of employer-provided benefits to shop for insurance on the public exchange.
This requirement applies to ALL employers that come under the FLSA – whether you offer health insurance coverage to your employees or NOT. Check to see whether the FLSA applies to your business.
The Department of Labor has provided templates for creating the employee notifications. They include customizable areas and general information about the public exchange.
Templates can be downloaded from the links below:
It’s a rite of passage for college students to don cap and gown and march for graduation ceremonies- in fact, according to the National Center for Education Statistics (NCES), nearly 1.8 million students will graduate with a bachelor’s degree in 2012. As those 1.8 million make the transition from undergraduates to careers, pursuit of advanced degrees or back into mom and dad’s basement, it’s critical that they understand how walking across that stage may have changed their insurance needs.
While every individual’s needs are unique, Jon Jepsen of SentryWest Insurance in Salt Lake City, UT, discusses five basic insurance coverages that all college grads should consider, to see if they apply:
A shiny new car, whether owned or leased, holds appeal for newly employed college grads. Auto insurance helps cope with the expenses of accidents, vandalism or theft. A lender or leasing company that finances the vehicle will require auto insurance. Car accidents can create large liabilities for a driver, so the liability portion of auto coverage helps protect the bank account. Plus, auto insurance covers many legal expenses if a driver is sued. If a graduate who already owns a car is moving, where they keep and register the car, especially from one state to another, can impact coverage. It’s important for new graduates to let their insurance agent know about these moves to make sure their current coverage will still apply, or if they’ll need a new policy.
Under the new federal health care law, children can remain on their parent’s health insurance policy until age 26. With unemployment and underemployment high among those in their early twenties, this can provide many recent grads with health insurance until they are able to get it through their employer or an individual policy. Individual policies can be pricey and differ significantly in coverage, so talk with a Trusted Choice® insurance professionalabout what makes the most sense.
Homeowners or renters insurance
College grads starting out may not own a home yet, but may rent a residence. To make sure their possessions are protected, homeowners and renters insurance offer comprehensive coverage whether at home or traveling. Liability insurance included in renters and homeowners coverage also helps protects against the risk of being sued. There usually are limitations on renters coverages within a group house—a typical post-graduate arrangement—so it is important to understand the details of a policy.
New grads may find a job with an employer that offers group term life insurance coverage. However, those with children may find it worthwhile to buy additional term life insurance or permanent life insurance, which builds cash value over time.
This is a vital but often-overlooked insurance coverage. It provides income when a person is injured or disabled, whether on the job or off. A Trusted Choice® insurance professional can calculate the right amount of coverage to help a person live while recovering.
New college grads may want to lean financially on their parents’ insurance coverages as long as possible (though mom and dad might feel a little differently!). While that makes sense, it’s not always viable. For instance, auto insurance companies will require an owner or lessee of a car to carry their own coverage. There are plenty of insurance policies out there that new grads won’t need, unless there are special circumstances, such as air travel insurance, contact lens insurance or cancer insurance. Typically, it is better to have comprehensive policies like renters or health.
Parents of new graduates also should take this time to review their own insurance portfolios, as there may be opportunities to reduce their premiums when child moves out of the home.
Jon Jepsen of SentryWest Insurance in Salt Lake City, Utah, a Trusted Choice® insurance professional, can help new grads and their families navigate these waters, to provide sensible coverage that won’t break the bank.
Jonny Jepsen, CIC