Personal Insurance

How Collision Is Different Than Comprehensive—
and Other Handy Information
The terms and jargon used by the insurance industry can be unfamiliar to many people. That’s why it is important that you clearly understand your options and know what you’re paying for. Here are some of the terms we use.
(Most policies are a combination of several or all of these coverages.)

These protect you and other people:
Liability Coverage This coverage protects you from expenses related to bodily injury or property damage you or your car cause in an accident. When choosing liability coverage, consider things like how much money you make and the property you own. Your liability coverage should be high enough to protect you if you are sued after an accident.

Medical Coverage This covers medical expenses for you and your passengers that result from an accident. If you frequently have a lot of passengers, you should consider carrying a higher amount than people who mostly drive alone.

Uninsured/Underinsured Motorist Coverage This pays for expenses associated with bodily injury or death from an accident caused by an uninsured, underinsured or hit-and-run driver who is at fault. This also covers you if you are hit as a pedestrian.

These protect your car:
Collision Coverage This pays to repair the damage done to your car due to an accident. Your agent will help you determine the amount of coverage you need based on the value of your car.

Comprehensive Coverage In most situations, this pays for damage done to your car in some way other than a collision. For example, if your car is stolen or vandalized. This also includes loss from fire, cracked windshields, floods, falling objects and wind.

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Umbrella
Why do you need umbrella insurance?
Once the liability limits are exhausted on your home, auto or other underlying insurance policies, your umbrella policy takes over and provides another layer of liability protection should you be sued and found legally liable for causing injury to someone else or damaging their property. Because the average size of jury awards has increased dramatically in the last few years, umbrella insurance has become more important.

Here are a just few situations that demonstrate the need for this insurance.

Your car slips out of gear and rolls into your neighbor’s house.

Your dog were to bite a neighbor’s child.

While on vacation, a rented boat you’re driving hits two people in a canoe.

A fire in your condo spreads to other units. If any of these unfortunate accidents happened to you, there’s a good chance that your current liability limits would not be enough to protect your assets or your future earnings. Umbrella limits start at $1 million, and higher limits are also available. This insurance covers you and all members of your household anywhere in the world.

Your agent is an advisor We can offer advice on an umbrella policy that meets your specific needs. Here are a few things to discuss so we can help you choose coverage:

Discuss your financial status, lifestyle and current and future assets.

Ask us to review the liability limits in your current policies.

Ask about the insurance company’s reputation for customer service

Ask whether it is known for paying claims fairly and promptly.

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Fraud
Insurance fraud is part of the reason your insurance premiums can increase. When someone defrauds an insurance company, everyone pays.

Facts on fraud
To make up the cost of widespread insurance fraud, the average American household pays an additional $200 to 300 per year. Fraud costs the U.S. insurance industry about $29 billion a year! According to statistics compiled by the National Insurance Crime Bureau (NICB):

1 in 3 bodily injury claims involved fraud.

25 percent of workers' compensation claims are fraudulent.

10 percent of property and casualty claims are fraudulent.

How to prevent fraud
We also encourage you to report suspected fraud, and help solve this problem. If you suspect anyone of insurance fraud please contact the National Insurance Crime Bureau, 24 hours per day at (800) 835-6422. Your call can remain anonymous! For more information about fraud, please visit the website at http://www.nicb.org.

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What does credit history have to do with insurance?
Over the last few years, many insurance companies have started using credit information to help determine what a customer pays for an insurance policy. In fact, over 90% of insurance companies use insurance scores, according to a study by Conning Research and Consulting Inc., a Hartford, Conn.-based research firm. To help you better understand how your credit-based insurance score is calculated and how that "score" impacts what you pay for your policy, we have developed the following list of frequently asked questions. Please note that the use of insurance scores varies by state.

What is an insurance score?
An insurance score is determined by reviewing a consumer's credit history. A carefully developed and tested computer model performs this analysis, and looks at information such as payment history, whether you have filed for bankruptcy, if you have bills with a collection agent, any outstanding debts you may have, and the length of your credit history. Unlike a "credit score," which is typically used when you are seeking a loan, an insurance score is used to help insurance companies accurately assign the best price available for your policy. When calculating your insurance rate, insurers typically group consumers into categories. For example, driving record and age are the most often used categories to help calculate the cost of a customer's auto insurance policy. Insurance scores are just another method insurance companies use to determine what you pay for your policy. According to extensive industry and independent research, people with certain patterns in their credit history that result in a lower insurance score are more likely to have claims that need to be paid by their insurer. For instance, keeping your credit card balances below the maximum limit and making regular, on-time payments will result in a higher score. On the other hand, if you have a history of "maxing-out" your credit cards to their limits and submitting payments late, your score will be negatively impacted, meaning a lower score. An insurance score DOES NOT take into account income, race, gender, religion, marital status, national origin, or geographic location. It only reviews your credit history.

What if I need more specific information about insurance scores?
The Insurance Information Institute Web site (www.iii.org) contains a great deal of specific information on this topic under the "Credit Scoring" link. It also contains links to other helpful resources.

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