Purchasing Property
and
Casualty Insurance
Don’t try this at home –
Get an Expert! Get an Agent.

“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

“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

“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

How do I compare Agents?
 Are they qualified? Which companies do
they represent?
http://www.scc.virginia.gov/boi
 Do they belong to a professional
association?
www.piavadc.com
http://www.iiaba.net/VA/default?ContentPreference

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

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.

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.

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)

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

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.

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)

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

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

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.)

Purchasing Homeowner Insurance,
cont’d
 Personal Liability and Medical Payments
to Others
Personal Liability – minimum is $100,000 and
can purchase higher limits

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

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

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

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

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

Purchasing Business Insurance, cont’d
 Determining premium, continued
Type of policy
Deductible
Prior claims
Location
Endorsements added to the basic policy
(“Bells & whistles”)

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

Thanks for attending!