Purchasing property and casualty insurance revised sep 2013

Assistant Vice President em Southern Insurance Company of Virginia
24 de Sep de 2013

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Purchasing property and casualty insurance revised sep 2013

  1. Purchasing Property and Casualty Insurance Don’t try this at home – Get an Expert! Get an Agent.
  2. “Inside information” How are your rates determined? Auto Insurance  Credit  Location (rural vs. urban)  Vehicle  Age & marital status of drivers  Driving record Property Insurance  Credit  Local Fire Dept. rating: 1 – 10  Replacement Value of property  Prior claims
  3. “Inside information” How can you purchase insurance? With an Agent  Product knowledge  Helps you to pick proper coverages & limits  May be able to select from many different companies  Can save you the time of searching yourself Without an Agent  Online access – you can do it anytime from anywhere  You will have to choose the proper coverages & limits  Difficult to compare prices & factor in company strength, different policy benefits  Can be time consuming
  4. “Inside information” OK, so I’m going through an Agent; how do I pick one? Captive  Represents 1 primary company (Ex. Allstate, State Farm)  Limited number of products; some don’t offer commercial insurance coverage  Can’t switch you to another company if your situation changes & your rates increase or you’re cancelled Independent  Represents several companies  Wide variety of products for many types of individual and business clients  Can switch you to another company if your situation changes or you don’t like the company or service
  5. How do I compare Agents?  Are they qualified? Which companies do they represent?   Do they belong to a professional association?  
  6. Purchasing Auto Insurance  What coverages do I need? Bodily Injury and Property Damage Liability  This pays the injured party if you are at fault  This is the basic required coverage in Virginia and in most states Uninsured Motorist and Underinsured Motorist  This pays you if the party at fault has no insurance or not enough insurance  In Virginia, this coverage amount must be equal to or greater than the Bodily Injury & Property Damage Liability amount, unless you sign a waiver
  7. Purchasing Auto Insurance, cont’d  How much Liability coverage do I need? How much damage are you going to cause?  State minimum: $25,000 per person/$50,000 per occurrence and $20,000 property damage;  Is that enough? Hint: do you see many $25,000 lawsuits? Might you pay more than $25,000 for a hospital visit, Doctor’s care, surgery, rehabilitation for the person(s) you injured to get well after an accident? Suggestion: get as much as you can afford. You are legally responsible for any damages not covered by your insurance policy.
  8. Virginia Drivers: Insurance Requirements  If you are caught driving without insurance or you did not pay the uninsured motorist fee, DMV will suspend your driving privilege until you:  pay a $500 fee, and  Pay a $145 reinstatement fee and  Buy insurance and have your insurance company file a certificate certifying that you have a policy with the required coverage limits. Every company charges a fee for this service. You will have to file this certificate of insurance for three years from the date you regain your driving privileges.
  9. Purchasing Auto Insurance, cont’d Other Optional Personal Auto Coverages:  Coverage on Property Damage to your vehicle  Collision – your vehicle hit something or was hit by another vehicle, and the other party was not at fault  Comprehensive (aka “Other than Collision”) – damage not due to a collision  Glass breakage, Fire, theft, vandalism, hail, pet chews the upholstery  It also pays for collision from an animal (deer, for example)
  10. Purchasing Auto Insurance, cont’d Other optional coverages:  Medical Expense and Income Loss  Pays all reasonable and necessary medical and funeral expenses for you or others injured or killed in an accident while riding or driving in your auto.  Includes hospital, surgical, rehabilitative, chiropractic, x-ray, dental, professional nursing, prosthetic, and funeral expenses.  It will also cover you or members of your family if you are struck by an auto while walking or while riding in another auto.  This coverage will pay for medical and funeral expenses even if you cause the accident  Payments are not “coordinated” with any other medical coverage
  11. Medical Expense and Income Loss Examples: 1) “Soccer Mom” has a fender bender while driving team to practice. Could pay for x-rays & checkup at local ER 2) You are in a car pool and the driver of your car pool is at fault, but you find out they are uninsured. Your Medical Coverage would pay up to your policy limit.
  12. Purchasing Auto Insurance, cont’d Other optional coverages:  Medical Expense and Income Loss, cont’d Loss of Income Benefits Coverage  Pays you, your family, or others in your auto for loss of income up to $100 per week for a period not to exceed 52 weeks.  Pays a weekly amount X the number of vehicles insured; for example, a 3-car auto policy would pay $300/week  Not coordinated with any other benefits (Workers Comp or Disability payments, for example)
  13. Purchasing Auto Insurance, cont’d Other optional coverages to consider:  Transportation Expense (Rental Reimbursement)  Reimburses you for the expense of renting a substitute vehicle if your auto is withdrawn from use for longer than 24 hours and the withdrawal is caused by a collision or by a comprehensive loss  Towing & Labor Costs  Auto Loan/Lease (“Gap” insurance)  Repair or Replacement Cost  Trip Interruption  Extended Non-owned coverage
  14. Purchasing Homeowner Insurance Why do you need it?  Required for a mortgager to approve a loan  Secures financial investments of insureds  Protects insured’s future with liability coverage  Repairs the home after disasters and catastrophes
  15. Purchasing Homeowner Insurance, cont’d  Dwelling Coverage for all real property and improvements to land  Home, other structures, piers, wharves, docks, fences, swimming pools, tennis courts, etc.  Personal Property  Personal property of the owner on and off (limited) the premises  Furniture, clothing, appliances, equipment, household items, books, other personal items  Additional Living Expense  Added cost if you are forced to leave the home due to a covered loss (Ex: Fire forces you to move to an apartment – monthly cost of the apartment, increased food expenses, having clothes cleaned commercially instead of at home, etc.)
  16. Purchasing Homeowner Insurance, cont’d  Personal Liability and Medical Payments to Others Personal Liability – minimum is $100,000 and can purchase higher limits
  17. Purchasing Homeowner Insurance, cont’d Optional Homeowner Coverages  Water Backup of Sewers or Drains & Sump Overflow  Ordinance or Law Coverage  Identity Fraud Expense  Personal Property Replacement Cost  Personal Injury  Loss Assessments  Scheduled Personal Property  Incidental Motorized conveyances
  18. Purchasing Business Insurance  What will you be insuring?  Property  Building, if owner  Contents  Furniture, equipment, vehicles used in business, data, intellectual property  If you’re a tenant – tenant betterments & improvements  Liability  Property damage  Medical Payments  Personal injury – libel, slander, false arrest
  19. Purchasing Business Insurance  What will you be insuring…cont’d Workers Compensation  Injuries on the job to employees  Medical expense  Rehab  Weekly compensation  Payments to dependents for injuries resulting in death  Protects employer from suit by employee for injuries on the job
  20. Purchasing Business Insurance, cont’d  What determines your premium? First – do you qualify for standard insurance or must you go to the Excess & Surplus Lines market?  Years in business (3+ is standard)  Prior claims  Credit rating  Type of business
  21. Purchasing Business Insurance, cont’d  What determines your premium? Type of business – level of risk for the insurance company (Ex.: health care facility vs. gift shop) Amount of coverage  Building value  Contents  Payroll
  22. Purchasing Business Insurance, cont’d  Determining premium, continued Type of policy Deductible Prior claims Location Endorsements added to the basic policy (“Bells & whistles”)
  23. Purchasing Business Insurance, cont’d  How can you help lower your premium?  Run a tight ship  Drug free  Background checks on employees  DMV license checks on drivers  Fire, smoke & burglar alarms  Safety talks  Risk review with your Agent  Higher deductibles  Maintain good credit
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