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Frequently Asked Questions

Below are some of our frequently asked questions. If you have any other questions or concerns, please feel free to contact us.

  1. What is a Trusted Choice Agency?
  2. What is homeowners insurance and who should buy this type of coverage?
  3. What is the difference between "actual cash value" and "replacement cost"?
  4. What are the policy limits (i.e., coverage limits) in the standard homeowners policy?
  5. Where and when is my personal property covered?
  6. Do I need earthquake coverage? How can I get it?
  7. What factors should I consider when purchasing homeowners insurance?
  8. What is the difference between an "all risks" policy and a "named perils" policy?
  9. What can I do to lower the cost of my homeowners insurance?
  10. If I have an accident which I think is covered under my homeowners policy, what should I do?
  11. Who pays for my legal defense costs if I am sued?
  12. What is auto insurance and why do I need it?
  13. What are the most important things to consider when purchasing auto insurance?
  14. How are auto insurance rates determined?
  15. What does my auto insurance premium pay for?
  16. Why do insurance rates vary so much?
  17. What affects my individual auto insurance rates?
  18. How can I lower my rates?
  19. Why do I need to give so much personal information? Will everyone have access to my personal information?
  20. Why does my credit history affect my rates?
  21. Is the credit score used by auto insurance companies the same as that used by lenders?
  22. Will the credit history check affect my credit rating?
  23. How do I get my credit information fixed if it is wrong?
  24. Does the use of my credit information unfairly discriminate in any way?
  25. What if I forget to list something on my driving record?
  26. Can other people drive my car and still be covered?
  27. Why should I list all household members even when they don't drive my car?
  28. Does my policy provide coverage when I rent a car?
  29. What is the definition of an "accident?"
  30. What is a "Deductible?"
  31. What should I do if I am involved in an accident?
What is a Trusted Choice Agency?
Trusted Choice agencies are insurance and financial services firms whose access to multiple companies and commitment to quality service enable us to offer our clients competitive pricing, a broad choice of products and unparalleled advocacy

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What is homeowners insurance and who should buy this type of coverage?
Homeowners insurance is one of the most popular forms of personal lines insurance on the market today. The typical homeowners policy has two main sections: Section I covers the property of the insured and Section II provides personal liability coverage to the insured. Almost anyone who owns or leases property has a need for this type of insurance. And many times, homeowners insurance is required by the lender as part of the requirements in obtaining a mortgage.

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What is the difference between "actual cash value" and "replacement cost"?
Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used the policyowner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policyowner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

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What are the policy limits (i.e., coverage limits) in the standard homeowners policy?
[Note: this answer is based on the Insurance Services Office's HO-3 policy.]
Coverages A and B provide protection to the dwelling and other structures on the premises on an all risks basis up to the policy limits. The policy limit for Coverage A is set by the policyowner at the time the insurance is purchased. The policy limit for Coverage B is usually equal to 10% of the policy limit on Coverage A. Coverage C covers losses to the insured's personal property on a named perils basis. The policy limit on Coverage C is equal to 50% of the policy limit on Coverage A. Coverage D covers the additional expenses that the policyowner may incur when the residence cannot be used because of an insured loss. The policy limit for Coverage D is equal to 20% of the policy limit on Coverage A. The coverage limit on Coverage E - Personal Liability - is determined by the policyowner at the time the policy is issued. The coverage limit on Coverage F - Medical Payments to Others - is usually set at $1000 per injured person.

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Where and when is my personal property covered?
Coverage C, which provides named perils coverage, applies to all your personal property (except property that is specifically excluded) anywhere in the world. For example, suppose that while traveling, you purchased a dresser and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit - even though the dresser has never been in your home before.

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Do I need earthquake coverage? How can I get it?
Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. However, unless you live in an area that is prone to earthquakes, you probably do not need this coverage. If you do live in a part of the country with high earthquake activity you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.

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What factors should I consider when purchasing homeowners insurance?
There are a number of factors you should consider when purchasing any product or service, and insurance is no different. Here is a checklist of things you should consider when you purchase homeowners insurance. First and foremost, purchase the amount and type of insurance that you need. Remember that if your policy limit is less than 80% of the replacement cost of your home, any loss payment from your insurance company will be subject to a coinsurance penalty. Also, determine the amount of personal property insurance and personal liability coverage that you need. Second, determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement or the earthquake endorsement? Finally, once you have decided on the coverage you want in your homeowners insurance policy, you can now decide which insurer you would like to purchase the insurance from. You should also decide whether you would like an insurance agent to assist you in your purchasing decision or if you would like to buy the product directly from an insurer without the assistance of an agent.

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What is the difference between an "all risks" policy and a "named perils" policy?
A named perils policy covers losses that are due to only those perils listed in the policy. The perils typically covered include fire, windstorm, hail, and other direct physical losses. An all risks policy covers losses that are due to any peril except those specifically excluded in the policy. It is important to note that all risks policy provides broader protection than do named perils policies.

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What can I do to lower the cost of my homeowners insurance?
There are a number of things you can do to lower the cost of your homeowners insurance. The best thing to do is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Other times, insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask your agent or company about discounts any that you may qualify for. Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $500 to $1,000 will lower your premium, sometimes by as much as five or ten percent. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible.

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If I have an accident which I think is covered under my homeowners policy, what should I do?
Insurance contracts are conditional contracts, which means that policyowners have certain duties that they must perform if a covered loss occurs. Failure to complete these actions can, and sometimes does, result in non-payment by the insurance company for losses that otherwise would have been covered. Required duties include: (1) notifying the insurance company or the agent that a loss has occurred -- this should be done as soon as you discover the loss; (2) protecting the property from further damage and/or to making any repairs necessary to prevent further damage; (3) preparing a detailed list of the personal items damaged which contains a description of the items, their actual cash value, or their replacement cost if you have added the replacement cost endorsement to your policy; (4) being prepared to show the company and/or the insurance agent the damaged items; (5) completing a statement for the insurance company that details the events that led to loss -- for example, the time the damage occurred, the cause of the losses, etc.

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Who pays for my legal defense costs if I am sued?
In the unfortunate event that you are sued, your homeowners policy will not only cover the cost of your legal defense, but your insurance company will also provide the legal counsel.

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What is auto insurance and why do I need it?

An auto insurance policy is a contract between you and an insurance company. You pay the premium, and in return, the insurer agrees to pay for any car-related losses detailed in the policy. Most states require that all drivers have an auto insurance policy, or the ability to provide evidence that you have the financial resources to pay for injuries or damages. Severe civil and criminal penalties may be incurred if you do not have insurance, including:

· Vehicle impoundment
· Revocation or suspension of driver's license
· Lawsuits
· Fines
· Imprisonment



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What are the most important things to consider when purchasing auto insurance?
Here is a list of things to consider when buying auto insurance:
· Choose the amount of liability coverage that meets your needs. For example, in Arizona the minimum requirements are $15,000 per person, $30,000 per accident, and $10,000 in property damage.
· Decide if you need optional coverage. Other types of coverage include collision, comprehensive, uninsured or underinsured motorist, and towing and rental reimbursement.

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How are auto insurance rates determined?
Insurance companies use statistical history to determine current rates. Rates are based on the amount needed to pay all claims and company business expenses.

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What does my auto insurance premium pay for?
On average, during the five-year period between 1995 and 2000, each dollar consumers paid for auto insurance has gone to cover:

*Note that for the last five years, auto insurance companies on average have not made profits on the policies they have written. In other words, for every dollar in premium collected, they have paid out $1.02 in expenses. In general, most auto insurance companies do not make an underwriting profit and instead rely on profits from investments made.
Source: Best's Aggregates & Averages, 2001 Edition

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Why do insurance rates vary so much?
You might think that your auto insurance rate would be pretty much the same no matter which company you choose. But your auto insurance rates can vary widely - even hundreds of dollars -- primarily because of: Varying claims experience - Auto insurance is priced to cover the costs of accidents that may happen in the future. Of course, companies cannot see into the future, so to do this, they use information about their past claims experience. Since each company has had different claims experiences with the groups of people they insure, the rates charged customers by different companies vary.

Varying costs of doing business - Each company's cost of doing business (how much they pay to sell and service policies), along with their financial goals, is different, resulting in different prices being charged to consumers.

Auto insurance companies price policies to cover the amount they'll need to cover:
· Accidents that have occurred;
· Claims salaries, building leases, and other claims-related costs; and
· Non-claims expenses such as customer service salaries, advertising and the price of selling policies.



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What affects my individual auto insurance rates?
A number of factors can affect the cost of your automobile insurance. Age, make and model of car, driving record, purpose the car serves, where you keep and drive your car, and your credit rating all affect insurance rates.

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How can I lower my rates?
There are a number of things you can do to lower your rates. Here are some tips:
· It pays to use an Independent Agent who can shop for you. You can often find policies that vary hundreds of dollars for the same coverage on the same car.
· Choose an automobile that is inexpensive to insure.
· Ask your insurer if they offer any discount plans. Most insurance companies have both vehicle and operator discounts.
· Raising your deductible can lower your premiums. Make sure you can afford a higher deductible. · Drive defensively.
· Improve your credit history.

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Why do I need to give so much personal information? Will everyone have access to my personal information?
Auto insurance companies typically collect only the information necessary to provide accurate insurance quotes. This may include your age, gender, marital status, and driving history. This information is not generally made available to others for any other purpose. All our carriers feature a "Privacy Policy" on their web sites to provide more detailed information on how your personal information is used and protected.

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Why does my credit history affect my rates?
Surprisingly, there is a verified correlation between poor credit history and increased claim risk. Insurance companies use credit history information to determine rates because, along with your other rating information such as gender, age, and location, it is a reliable indicator of overall insurance risk.

This can work to your advantage; customers with good credit history generally can get lower rates than those without. Typically, auto insurance companies will not use your credit history to deny coverage or to cancel your existing policy.

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Is the credit score used by auto insurance companies the same as that used by lenders?
No. Lenders use your credit report to estimate your ability to repay a loan. Auto Insurance carriers use a different method to estimate the likelihood or your filing a claim. Some of the issues that may be considered to determine your auto insurance rate include:
· number and history of late payments;
· derogatory public records (bankruptcies, judgements, liens);
· outstanding balances on credit accounts, how long you have had a credit history;
· the number of non-insurance inquiries;
· the number and age of auto loans.

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Will the credit history check affect my credit rating?
Credit Report inquiries are identified by a code indicating the company making the inquiry. Inquiries by insurance companies are also identified by this code. Most leading providers of credit scores, such as Fair, Isaac, exclude insurance inquiries from their credit score calculations.

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How do I get my credit information fixed if it is wrong?
You can contact the various credit reporting agencies to order a copy of your credit report to review the information. Generally, this report is free.

Check out the FTC website to learn more about how to access your credit report.

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Does the use of my credit information unfairly discriminate in any way?
No. Your credit has nothing to do with income, race, or religion. Rather, it is based on your bill-paying behavior and how you use available credit, and is largely within your control. Since most consumers pay their bills on time, most will enjoy the benefit of a lower auto insurance rate.

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What if I forget to list something on my driving record?
Your quotes are based on information you provide. All driving and claims records are verified before a policy is issued. Any omitted information would be noted at that time and the insurance premium would be adjusted to reflect your actual driving record.

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Can other people drive my car and still be covered?
Generally, anyone who has permission to drive your vehicle is covered. All people who regularly use your car should be listed on your policy. You should check with your agent for specific details.

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Why should I list all household members even when they don't drive my car?
All family residents of your household of driving age must be listed to protect both you and your insurance carrier. Exclusions are available in some states for family members who do not require coverage.

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Does my policy provide coverage when I rent a car?
Today, most companies will provide rental car coverage only if you are renting a car on vacation. Call your insurance company to find out what rental coverage you have under your policy.

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What is the definition of an "accident?"
For most carriers, an "Accident" includes the following:
· "At Fault," where you were negligent.
· "Not at Fault," where the other party was negligent.
· Reported and unreported collisions where you were involved as a driver.
· "Not at Fault" occurrences where your parked vehicle was damaged in a collision.

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What is a "Deductible?"
A deductible is the amount of each claim you agree to pay on collision or comprehensive coverage. Your insurer will pay the difference between the claim amount and the deductible. For example, if your claim is $2000 and your deductible is $500, your insurer will pay $1500 and you will pay $500.

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What should I do if I am involved in an accident?
Follow these simple steps:
· First, make sure everyone is all right, call for medical assistance if needed, and notify the police.
· DO NOT discuss the accident with anyone except for your insurer or the police.
· Give the other driver(s) your name, address, phone number, and the name of your insurance company. Get the same information from the other drivers(s). If the other driver is uninsured, report the loss under your uninsured motorist coverage with your company.
· Gather as many details the accident as you can.
· Finally, call your insurance company or agent as soon as possible.

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