Insurance FAQs

What are the factors that affect the insurance premiums paid?

• Claims activities, which include the costs of medical care, legal defense, jury awards, claims adjustments, construction, auto body repairs and insurance fraud.
• Overhead expenses such as rent, employee salaries and benefits, utilities, equipment, furniture and office supplies.
• Investment income and principal.

Auto Insurance

How does where I live affect my premium?

• Where you keep your car directly affects your chances of having an accident or becoming a victim of theft or vandalism. The likelihood of encountering these problems increases in larger, more densely populated cities, while such incidents remain relatively low in rural areas.

Do all states require some kind of liability insurance?

• No. Some states have “financial responsibility” laws that require all drivers to be able to pay for any damage or injury they might cause. All states offer UM and UIM policies, including no-fault states. Many states require that motorists carry this coverage in order to gain protection from the inadequate insurance coverage of other drivers.

 If a friend borrows my car, is that person covered by my policy? Am I still covered?

• Generally, you are still covered. Liability and coverage for physical damage (comprehensive and collision) always follows your car. If the person who borrowed your car is insured, his / her policy will also be available to cover the cost of damages and injuries. Exceptions can take place due to a poor driving history or claims experience on excluded drivers.
• If you borrow someone else’s vehicle, the same rule applies: your own insurance follows you no matter whose car you’re driving. The vehicle’s owner’s policy is the key coverage in the event of an accident. In most cases, insurance follows the vehicle first, so the insurance of the vehicle’s owner would be primary.

What is a deductible?

• This is a set dollar amount, which must be paid by the insured for each benefit period or calendar year for covered service before the insurance begins making payment.

Am I covered for “acts of nature” or natural disasters?

• Comprehensive insurance covers you for fire and theft, and generally will cover you against damage by flood, earthquake, hail and other natural perils. Comprehensive insurance does not provide coverage when your car is overturned. This is technically considered a collision. Driving into floodwaters is also considered collision.

Homeowners Insurance

Does the mortgage company or do I decide on the type of insurance coverage that is purchased?

• You make the decision and select the insurance that you feel is the best. The mortgage company collects a certain amount each month from you in order to protect their investment. They put the money in escrow and cover your insurance and taxes. The mortgage company may determine the minimum required value to insure your property.

What does a homeowner policy cover?

• The exact coverage is hard to define, as there are different policies and different companies writing Property / Casualty business in the United States. Property and liability coverage are two important areas covered by all homeowner policies. Property insurance covers structures and possessions. Liability means you’re legally obligated to pay money to another person for unintentional acts that are caused by you or your family, or property. This liability does extend to medical payments to others because of injuries caused by you or your family.

 Are floods, earthquakes and national disasters covered?

• Most catastrophes are covered. There is no coverage provided for flood and earthquake damage by a standard policy. These two perils are more common than people realize.
• Generally, earthquake coverage may be added by endorsement.
• Flood insurance is not added by endorsement. It is a separate policy and is available by many carriers. The coverage follows the same guidelines and rates. All companies are regulated by the National Floor Insurance Plan (NFIP).

Is there any exclusion that I should know about?

• Exclusions are generally listed and defined in your policy. They might include neglect, intentional loss, “earth movement,” general power failure and even damage caused by war. Ordinance or law exclusion may be one that is costly and may not be covered by your policy. This is when governmental bodies establish building codes that drive up the cost of rebuilding or repairing after a loss has occurred. You might find out when replacing damaged property that current law demands a higher grade or more expensive material than those you’re replacing. The new materials might not be fully covered.

Why does my homeowners coverage continue to increase each year?

• The coverage increases reflect the increase in the replacement cost of your home. The replacement cost was originally determined at the inception of your policy. Insurance companies will automatically update the replacement value of your home each year based on the building cost inflation factor for your zip code. Building a home may cost more than the cost to purchase a home, including the land. This is because the cost of building materials and labor increases even when real estate value has decreased.

Renters Insurance

Is renters insurance expensive?

• Renters insurance typically is available for as little as $150 a year.
• The cost of insurance depends on the amount insured and where you live.

Does my landlord’s insurance protect me?

• The answer is generally no. The landlord’s insurance covers the building itself and seldom a tenant’s possessions or liability. Check with your landlord before signing a lease.

Business Insurance

Do I need insurance immediately when I am just getting my business started?

• The answer is yes. The chance of suffering a loss begins with the first day of your business. If you have no insurance, or have improper or insufficient coverage and suffer a loss, your insurance agent can do little to help you.

If I don’t have any major business assets, do I need insurance?

• If you think about it, your business is your property and needs to be protected from loss, damage and liability just like your home or car.
• Your business is also your source of income, so you need protection from loss of this income.

Does insurance coverage vary for different businesses?

• Yes it can. Small business can choose a package policy that covers the major property and liability exposures and the loss of income. The Business Owners Policy (BOP) is the most common package policy used by small business: The BOP generally provides more complete coverage at a lower price than separate policies for each type of insurance needed.
• Letzig Group Inc can help you decide which policy or policies are right for your business and those you qualify for. Additional coverage for perils or conditions otherwise excluded (floor protection, etc.) can be obtained by endorsements to a standard policy or as a separate, second policy called a Difference in Conditions (DIC) policy.

Student / Recent Graduate Health Insurance

As a college student, am I covered by my parents’ policy?

• This depends on the policy and its terms. Most health insurance policies cover insured children up to age 18 or 22 if the child continues as a full-time student.
• So if you’re 18 and not a full time student, you will need to get your own policy.

What kinds of risks do college students face?

• Some of the risks they face as they head off to school are theft of personal property, auto accidents and risks related to attending and giving parties. A call to your insurance agent will inform you of your coverage and any limitations.