Frequently Asked Questions About Insurance
AUTO INSURANCE FAQ
Car insurance protects you and others in the event of accident, theft, or damages. Accidents are impossible to predict and your auto insurance policy will cover you financially in the event the unexpected happens! When you get behind the wheel, you’re taking a risk, whether you realize it or not. Even if you’re not at fault, but the other driver doesn’t have adequate insurance, you may still find yourself paying for damages and any resulting medical bills. If you are at fault, you are typically held liable for damages to the other person’s vehicle, medical costs, and potential legal fees. To learn more about The Fundamentals of Auto Insurance, visit our blog.
Levels of coverage vary from person to person and your agent will help you determine the appropriate level of coverage and deductibles. Policies generally include:
- Liability: If you’re at fault, then your liability will pay for the damages suffered by other parties.
- Collision: If you hit another vehicle or object, collision will pay for damages and repairs to your vehicle.
- Comprehensive: If your vehicle is damaged while parked, a tree falls on your car, or a deer hits you, then comprehensive covers you.
- Medical expenses: If you or a family member is injured as a result of an accident or while riding in someone else’s car, this coverage will pay for associated medical expenses.
- Uninsured/underinsured motorist: Unfortunately, there are many drivers who carry only minimal insurance. This coverage pays for injuries and property damage when the at-fault driver can’t cover the costs.
- Optional roadside assistance: This optional coverage keeps you rolling on all four tires, ensures your batteries hum, and, if needed, provides towing services.
- Optional rental reimbursement: If your car is in the shop for several days and you can’t get by without wheels, rental reimbursement keeps you moving for a very nominal premium.
There are several factors that companies use to determine auto insurance rates. Some key considerations include: the age of your car, estimated annual mileage, your driving record, age, gender, geographic location, credit rating, car safety rating and more. Be sure to ask your agent about good-student and good-driving discounts as well.
Typically, if you rent a car in the United States, your car insurance policy will cover you with the same coverage you have shown in your policy declarations page. If you do not have collision and comprehensive coverage, damage to the rental car will not be covered. However, be sure to review your policy before declining additional coverage offered by the rental agency.
Comprehensive coverage is very important! If your car was damaged in a parking lot, if you are struck by a deer, if a squirrel decides to eat your wiring, or if your car is stolen, comprehensive covers you.
HOME INSURANCE FAQ
Homeowners insurance (also known as home insurance or property insurance) protects you and your home in the event of loss due to disaster or burglary. Your policy also protects you from potential liability claims. Unlike car insurance, homeowners insurance is not required; however, if your home is financed, your lender will probably require you to have coverage — and with good reason! A homeowners policy typically covers your home structure, attached garage, and any other structures on your property (like a barn or detached accessory dwelling unit). The policy also covers personal possessions like furniture, jewelry, appliances, and clothing and protects you from personal liability claims like bodily injury or personal property damage. In the event that your house was destroyed or severely damaged, your homeowners insurance may even pay for alternative living arrangements while your home is being repaired.
The amount of compensation you receive on a claim depends on the level of coverage you have purchased. Licensed insurance agents can help you determine the appropriate level of coverage for you and your family. An agent can also help you determine your level of risk and an appropriate policy deductible for your needs. Once you have a policy, we recommend that you regularly assess the value of your home and your possessions to make sure that your coverage is adequate.
A home inventory is a detailed record of your possessions. A meticulous inventory of your possessions helps you receive the best possible compensation from your insurance company. Be sure to discuss the difference between replacement and actual cash value with your agent! Your inventory should all major items like jewelry, art, antiques, furniture, appliances, and clothing. Whenever possible, include make, model, date of purchase, and price. Be sure to photograph each room of your house thoroughly. Store your inventory and photos in a safe deposit box or share copies with family members.
If you have purchased flood coverage provided through the National Flood Insurance Program, yes. Contact your agent to file a claim. If you live in a flood-prone area, you should strongly consider adding flood insurance to your policy.
In most cases, homeowners insurance is not included in your mortgage payment. However, many new homeowners opt to create an escrow account so that insurance premiums are bundled into your monthly mortgage payments.
RENTERS INSURANCE FAQ
While the structure you live in and pay rent on is covered by your landlord’s property insurance, renters insurance covers the contents of your apartment as well as your personal liability. In the event of theft or fire, for example, your renters insurance would help you replace your clothing, furniture, electronics, appliances, and more. In the event that the building or neighboring apartments are damaged by your actions or negligence, rental insurance offers liability protection. For example, if an unattended candle sparked a building-wide blaze, or you accidentally left the water in the tub running and it ended up in your downstairs neighbor’s living room, then you’d be protected financially.
Absolutely. Even if you live a minimal lifestyle, you’d be surprised at the replacement value of your possessions. An insurance agent can help you assess the right level of coverage that corresponds with your needs.
Renters insurance delivers great value for the cost. Most policies cost approximately $20 per month or less. So, for less than the price of a weekly coffee habit, you can enjoy the peace of mind that renters insurance delivers.
While some companies allow roommates to split the cost of a policy, it may be wise to consider separate policies. For approximately 50 cents per day, renters insurance covers all of your possessions and personal liability. In the grand scheme of things, that’s a modest investment. Furthermore, with an individual policy you don’t need to worry about false or excessive claims on your account, nor will you have to modify your policy in the event that your roommate unexpectedly moves out before the end of your lease.
If your computer, TV, or other electronics were damaged as a result of fire, theft, or vandalism, then your policy will cover it. If your computer died after a long and productive life, or from negligence or misuse, then your policy will not cover the cost of replacement.
Actual cash value is the cost of replacing your belongings, less depreciation. So if your computer cost $2000, but you bought it 5 years ago, it may only be worth about $750 today. Replacement value allows you to replace your belongings with new goods, up to a certain maximum dollar amount. Discuss your options with your agent to decide which is best for you.
CONDO INSURANCE FAQ
While your condominium association policy covers the external areas of your dwelling, condo insurance covers the interior walls of your unit, appliances, personal property, and personal liability.
Be sure to speak with your agent, but you should consider the type of policy (bare walls-in or all-in) your homeowner association (HOA) carries, the cost of rebuilding or replacing your structure, the value of your personal property, the value of your assets (to determine personal liability), and any additional expenses that may be incurred in the event of a loss or claim.
Most standard policies do not cover losses incurred as the result of flooding. Speak with your agent to determine whether or not you should purchase flood coverage through the National Flood Insurance Program.
As with homeowners, condo insurance is not typically tax deductible. However, if you rent or sublet your condo or you operate a business out of it, you may be able to deduct a portion of your insurance as applied to depreciation. Be sure to discuss your options with your accountant or tax professional.
Be sure to ask you agent about possible discounts on your policy. A few of the most common discounts are:
- Protective devices discount: if you install or already have smoke detectors, fire extinguishers or a monitored security system, you could save up to 15%.
- 55 and retired: If you’re over 55 and are retired, you may be eligible for up to 25% savings.
- New home discount: If you just purchased a newly-built condo, you may be eligible for a new construction discount.
LIFE INSURANCE FAQ
Purchasing life insurance is one of the most important decisions you can make for your family. In the event of an unexpected or premature death, life insurance can protect your family and provides peace of mind. A life insurance policy may be used to pay final expenses, pay off debt, replace income, secure an inheritance, or pay for education expenses. There’s a lot to learn about life insurance — for detailed information, please visit our blog.
Your financial advisor should be able to help you determine the amount of life insurance you need. He or she will likely consider your current income, financial responsibilities and obligations, and your family’s future fiscal needs. Coverage benefit amounts on a typical term policy can range between $50,000 to 200,000 or, in some cases, even more.
There are three different types of life insurance available for purchase in Tennessee: term, universal, and whole life. Term life is one of the most common and affordable ways to ensure the fiscal future of your family. Assuming you pay your premium as scheduled, these policies remain in effect between 5 and 20 years. Universal life insurance offers the flexibility of low-cost term life, guaranteed protection, plus an added savings component. Whole life insurance provides protection over the course of the insured’s entire life. It features steady premiums, death benefits, and cash value.
After you’ve discussed your term, whole, or universal options with your agent and have decided on a policy, you’ll need to fill out an application and then you’ll complete a detailed health questionnaire (often conducted over the phone or online). Once the survey has been completed, your insurance company will schedule an examination. Expect to confirm the details of the interview and be prepared to have your blood pressure, pulse, height, and weight confirmed. The paramedical technician will also take blood and urine samples. In many cases, the technician will come to your home or schedule a time to meet with you at your convenience.
While your age and your family history are two of the key considerations in determining the cost of your policy, here are a few suggestions for reducing your premium:
- If you smoke, quit immediately.
- If you’re overweight, make plans to lose weight now.
- Reduce or eliminate alcohol consumption.
- Drive safely: if you have multiple moving violations, you can expect higher life insurance premiums.
- Leave skydiving, scuba diving, and race car driving to others: high-risk hobbies can increase your costs.
- Limit the number of riders on your policy.
- Consider term life over universal or whole life.
UMBRELLA INSURANCE FAQ
Personal umbrella insurance, also known as excess liability insurance, offers extra liability insurance. For example, in the event that your homeowners insurance or auto insurance liability has been maxed out, then umbrella insurance has you covered. It’s designed to protect you and your assets from major claims and lawsuits. Umbrella may also cover you in the event that you’re sued for slander, libel, false arrest. Visit our blog for more information on umbrella insurance policies.
An umbrella policy kicks in when the limits of your existing property, car, boat or motorcycle insurance have been exhausted. It’s not at all uncommon for liability lawsuits to result in judgments in excess of $1 million, an umbrella can cover the difference between your policies.
In today’s litigious environment, an umbrella policy is a good idea not only for individuals with a high net worth, but also for those who are earning a good, steady livelihood. For those with a high net worth, an umbrella policy protects their assets. For those with more modest assets, a personal umbrella policy protects their future earnings as well as their current assets.
There’s no one-size-fits-all answer to this question. Discuss the value of your assets, income, property, existing financial obligations and risk tolerance with your insurance agent to determine your net worth and to establish an appropriate level of excess liability coverage for you and your family.
No, a personal umbrella policy does cover personal liability issues that may stem from your business or profession. Nor does your policy cover your possessions, contracts, or intentional criminal acts.
MOTORCYCLE INSURANCE FAQ
Yes! We recommend that you discuss the appropriate level of liability with your insurance agent; however, Tennessee’s minimum limits of liability are as follows:
- $25,000.00 for one injury or death
- $50,000.00 for all injuries or deaths
- $15,000.00 for property damage for one accident
Motorcycle insurance works much like car insurance: you determine your liability limits, select your deductible amounts, and pay a premium for coverage. As with car insurance, companies consider a number of different factors when determining your rate. Your agent will ask you questions about the kind of bike you’re riding, its age, how much the bike cost, how big the engine is, who will be driving and riding on the bike, and the number of miles you anticipate riding. Learn more about motorcycle insurance here.
There are several discounts that may be available to motorcycle riders including:
- Good rider discount: for those who go 60 months without an accident.
- Transfer discount: for those who transfer from one insurance company to another.
- Memberships: those who hold a membership in a motorcycle organization like the American Motorcycle Association may be eligible for reduced rates.
- Motorcycle safety: for riders who have voluntarily passed a motorcycle safety driving program.
If you plan on riding with a passenger on a regular basis, be sure to discuss your liability options and make sure that you have adequate coverage. If you are not responsible or held liable for an injury to your passenger, then your passenger liability will not apply. Medical payments coverage will apply, regardless of who is at fault.
Enjoy a genuine parts guarantee with your policy and rest assured that if your bike is totaled, New Motorcycle Replacement coverage will have you back on the road in no time.
ATV INSURANCE FAQ
ATV insurance typically includes liability coverage, collision and comprehensive coverage, uninsured/underinsured motorist coverage, medical payments coverage, optional equipment coverage, and transport trailer physical damage coverage.
One of the pleasures of off-roading is venturing out into the unknown. While these adventures bring thrills and excitement, accidents can happen. Even though you won’t be operating your off-road vehicle on Tennessee’s streets, ATV insurance will protect your investment from damage or theft and offers great liability protection. Furthermore, many ATV-friendly parks require your vehicle to be insured.
Generally speaking, no. ATV insurance is very affordable and may cost as little as $12 per month to protect your investment.
Vehicles that may be considered ATVs include: dirt bikes, dune buggies, golf carts, four-wheelers, motorized bicycles, and snowmobiles. Although ATVs need not be registered, they must be titled by the Tennessee Department of Revenue.
Your policy may not cover you when you’re riding or driving a vehicle you do not own. Be sure to speak with your agent or read your policy contract carefully.
BOAT INSURANCE FAQ
Although boat insurance is not required in Tennessee, boating-related theft is shockingly common. According to the Tennessee Wildlife Resources Agency, millions of dollars of insurance claims are made each year. Boat insurance also protects you in the event of accidents, damage, and from personal liability.
Boat Insurance covers you and your family should you suffer loss or damage to your boat. It covers most watercraft with motors, including fishing boats, pontoons, recreational boats, and yachts. Boat insurance does not usually cover canoes, kayaks, or personal watercrafts, which may be covered by your homeowners insurance.
Whether you’re cruising around Old Hickory Lake, the Cumberland River, or your boat is safely stored for the winter, boat insurance protects your investment. Policies typically include watercraft medical payments coverage, watercraft liability coverage, property coverage, repair costs, emergency services, uninsured watercraft coverage, personal effects, boat trailer coverage and may include an agreed value option. Speak with your agent for more information.
Boat insurance is incredibly reasonable and policies may start around $20 per month. Discounts may be available for full-pay, easy pay, and the successful completion of a boater safety course.
Throughout the years, whenever we've needed to change anything about our policy, Jan has been a fabulous help. She's friendly, thorough and responsive. I know for a fact that we would have changed companies if not for her incredible service.
All State has been my insurance company for 11 years. Over the years, I have insured my apartment, 3 different cars, my home and my life. Royce has always gone above and beyond, making me feel important and valued. Many thanks!
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Thanks for all your help in getting my car taken care of. you were on top off things when I needed it. Glad to have you on my team. Thanks again.
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