Insurance Q&A

The state of Pennsylvania requires all registered vehicles to carry minimum liability limits. To purchase a vehicle or renew your registration, you must provide proof of insurance.

Insurance companies use a combination of several factors to determine your rates including:

• 1) The area where you live and where you garage your vehicle
• 2) The vehicle you own
• 3) The age of the household drivers
• 4) Coverage limits
• 5) Driving experience
• 6) The use of your vehicle

There are several ways to decrease the cost of your automobile insurance. First, ask your agent if there are other companies he represents that offer competitive rates. Secondly, ask about any discounts that you may qualify for. Many insurers will offer you a discount if you insure multiple cars under the same policy. Other discounts are available for multiple policies with the same company, driver education classes, airbags, and alarm systems. Also, ask about varying your comprehensive and/or collision deductibles. Finally, ask your agent to help you evaluate the need for collision coverage on an older vehicle.

Yes, your insurance company may non-renew your insurance policy at their discretion based upon:

• 1) Not meeting acceptable company guidelines
• 2) Chargeable accidents
• 3) Excessive or major violations

Yes, you are covered if you give permission for the other person to use your car. Liability and physical damage coverage always follow your car. So, if you give permission for your neighbor to borrow your car and he has an accident, the accident could be surcharged against your policy. The owners’ policy is primary for liability while your own insurance may follow and provide benefits. First party benefits (medical, work loss, accidental death and funeral benefits) follow the driver and their own personal auto policy.

You may have coverage for a short-term rental vehicle for personal use only if you have "full" coverage on at least one of your vehicles (liability, comprehensive, and collision coverage). Insurance carriers are strongly recommending taking the physical damage protection offered by the rental company. That way any claims would not affect your rates or your policy renewability on your own personal auto insurance policy.

Homeowners insurance is one of the most popular types of personal insurance on the market today. The typical homeowners policy has two main sections:

• 1) Section I covers the property of the insured
• 2) Section II provides personal liability coverage to the insured

Anyone who owns or leases property has a need for this coverage. Many times, homeowners insurance is required by a lender as part of the requirement in obtaining a mortgage.

Several factors to consider when purchasing homeowners insurance:

• 1) Insure your home to at least 80% of replacement value to satisfy most insurers coinsurance requirements. Remember, market value does not equal replacement value of your home. Have an insurance agent help determine your home's replacement value.
• 2) Determine if you need any additional endorsements to the policy. For example, do you want replacement value on your personal property? Do you need earthquake coverage or flood coverage? Do you have high value items, like antiques, jewelry, or silverware that should be listed and covered specifically?
• 3) Determine Section II coverage limits. Do you need $100,000, $300,000, or $500,000 of personal liability, or an umbrella policy? Do you have other rental or vacation properties that you need coverage for liability?

Ask your agent to guide you through these questions. The more information you disclose, the better your agent can help protect you.

Coverage A and B provide protection to the dwelling and other structures on the premises (sheds, garages, etc.) on an "all-risk" or special form coverage up to the policy limits. The policy limit for Coverage A is set by the homeowner at the time the insurance is secured. The Coverage limit for B is usually equal to 10% of the home insurance value on the dwelling (Coverage A) for detached garages, sheds, etc. Coverage C covers losses to the insured's personal property on a named peril basis. The policy limit on Coverage C usually equals at least 50-75% of the dwelling limit. Coverage D allows for additional expenses that the policyholder may incur due to an insured and covered loss. Coverage D usually equals 20% of the dwelling limit. Finally, Coverage E- Personal Liability-is determined by the policyholder at the time the insurance is secured.

Coverage C provides coverage to your personal property (except property that is specifically excluded) on a Broad Form or named-peril basis anywhere in the world. For example, if you purchased a piece of furniture while traveling, your homeowners policy would provide coverage for the named perils while the piece is in transit, even though it has never been in your home.

There are several ways to decrease the cost of your homeowners insurance. First, ask your agent if there are other companies he represents that offer competitive rates. Secondly, ask about any discounts that you may qualify for. Many insurers will offer you a discount if you have multiple policies with the same company. Other discounts are available for smoke detectors, alarm systems, deadbolt locks, plus longevity with the same company. Finally, ask about varying your deductible.

There may be exclusions listed and defined in your policy such as neglect, intentional loss, earth movement, flood, general power failure, and even damage caused by war. If you fail to take care of your property (e.g., a leaky roof not repaired), you may not be covered. Obviously, if you intend to lose an object or damage your property, there is no coverage. In addition, one other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by local government bodies that drive up the cost of rebuilding or repairing after a loss occurs may not be covered by your insurance policy. If you discover when replacing damaged property that current law demands higher grade or more expensive materials than the original ones being replaced, the new material may not be covered for the full price. Ask about those exclusions now instead of finding out at claim time.

If you live in an apartment or rented house, renters insurance provides important coverage for both you and your possessions. A standard renters policy protects your personal property in many certain cases of theft or damage and may pay for temporary living expenses if your rental is damaged. It can also shield you from personal liability. Anyone who leases a house or apartment needs to consider this type of coverage and most times proof is required by the landlord before you move in.

Generally, no. The property owner's insurance covers the building itself and rarely a tenant's possessions. Clarify this with your landlord before signing a lease. Most landlords require tenants to provide proof of renter's insurance before moving in.

Again, your lease agreement and/or the landlord’s insurance policy may specifically exclude liability for something that occurs within your rented residence. You could be held personally liable for injury to another person or damage to another person's property if the incident occurred within your rented residence. Be sure you have adequate liability coverage on your renter's policy.

Renters insurance is typically available starting at less than $150 annually. It usually covers personal property inside your apartment on a named peril basis and includes personal liability protection. The named perils include:

• 1) Fire or lightning
• 2) Windstorm or hail
• 3) Explosions
• 4) Riots
• 5) Aircraft
• 6) Vehicles
• 7) Smoke
• 8) Vandalism or malicious mischief
• 9) Theft
• 10) Falling Objects
• 11) Weight of ice, snow or sleet
• 12) Accidental discharge or overflow of water or steam
• 13) Sudden or accidental tearing apart, cracking, burning, or bulging
• 14) Freezing
• 15) Sudden and accidental damage from artificially generated electrical current
• 16) Volcanic eruptions

Renters coverage applies to your personal property anywhere in the world.

Standard renters policies cover only you and relatives that live with you. Unfortunately, if your roommate is not a relative, each of you will need your own renters policy to cover your own property and to provide personal liability coverage for your own actions.

The personal umbrella policy is a liability insurance contract designed to accomplish two goals:

• 1) It increases the liability protection beyond what the policyholder already has on his/her auto or homeowners insurance policies
• 2) It is designed to fill in the gaps in a policyowner's liability coverage since several types of liability exposure exist that are not covered by personal auto or homeowners policies.

The only people who used to need personal umbrella policies were wealthy individuals who had sizeable personal assets. Unfortunately, in today's litigious society, many people realize they have a need for more liability insurance than what is provided under their auto and homeowners policies. The personal umbrella policy is ideally suited to provide this protection.

Yes, you do need a farmowner's policy, regardless of the value of your farm assets. You should insure your farm assets against loss. However, in today's society, the important coverage in any insurance policy is the liability protection. How would you pay for damages done by the steer that got loose through the opening in the pasture fence? Or how about the milk contamination in the bulk tank driver's last load? Or even damage to another vehicle caused by your tractor and equipment out on the road?

Equipment can be protected from losses due to fire, theft, collision, and upset. If machinery is not specifically listed on the policy, you have no coverage for those pieces. Livestock is the same way. Livestock can be insured up to its replacement value on a farmowner's policy using a brief description and value of each head. Again, if it is not listed on the policy with a description and value, you generally have no coverage.

Again, in today's society, liability protection is a major concern. Does your farm policy provide enough coverage at $300,000 limits? If you own a farm or other assets, probably not. You might be better suited to consider a farm umbrella liability policy of $1M, $2M, $5M or more. The umbrella policy offers additional protection beyond the basic liability coverage afforded under the general liability limits of the farmowner's policy.

Yes, you need WC for any and all employees, regardless of the wages paid. Pennsylvania law requires you to protect your employees against job-related injuries. As a result, WC coverage is mandatory in Pennsylvania. Call us for WC rates or to compare.

If you are using a pickup truck to service your farm property only, you may want to consider a farm sticker in Pennsylvania, instead of licensing. Also, if you go no further than a small radius of your farm, you may want to consider farm license plates for the truck. We can insure both of these types of vehicles. Call us!

Yes, you do need insurance immediately because it is now required in order to register a business in Pennsylvania, and your chance of suffering a loss begins the first day of business. If you suffer a loss and have no insurance or have improper or insufficient insurance coverage, you can't get help after the fact. You could lose everything you have put into the business, including personal assets, before you really get the business off the ground. Also, many states and local jurisdictions require that businesses be insured prior to operating. And if you rent space for your business, your landlord probably requires proof of liability insurance as well. The title of the vehicle also determines how the vehicle is insured.

Again, the answer is yes. You do need insurance for some of the same reasons above. Every business has some property. Just like your home and car, your business needs to be protected from loss, damage and liability. Also, your business is your source of income, so you need protection from the potential loss of that income.

In today's society, liability protection seems to be the more important coverage of the two. Insure your business and its assets properly with a property and liability package. In addition, if you are doing subcontract work for another party, they will require liability insurance coverage to match their own liability limits.

Yes, business policies do vary in coverage. Because businesses vary in the goods and services they provide, there is not one standard insurance policy to meet every businessowner's needs. It is impossible to have a standard policy to cover all contingencies that a business could face. However, Businessowners Policies (BOPs) provide the small businessowner a more complete coverage package to meet their business needs. Talk to us today to tailor a package to best suit your individual needs.

First, in hiring employees, be sure you are compliant with State and Federal regulations for advertising, interviewing, and hiring new employees. You may want to consult your attorney for legal advice prior to hiring your first full-time employee. You will also need to secure Workers Compensation (WC) insurance to cover the employee for work-related injuries while on the job. WC coverage is mandatory in Pennsylvania for all employers with employees.

Be sure to call your insurance agent to discuss the situation. Sometimes, vehicles used in the business may be covered under your personal auto policy. Most times, your agent will write a new commercial auto policy to cover the increased risks associated with business use of a vehicle.

Yes, even churches need insurance coverage. Property and liability packages offer comprehensive coverage for the active congregations today. As church buildings and programs grow, the chance of loss increases. You need to insure the church building and other structures against physical damage, and include liability protection for the employees, members, and volunteers of the congregation.

Yes, there are specialty church insurance carriers who write church and not-for-profit coverage only. A comprehensive church package protects the physical church building against loss (i.e., wind, fire, lightning, and other "special form" perils) and includes liability protection for activities of its members, volunteers, and employees (a church outreach/service project, a youth work camp, volunteer labor at the church, etc.). The package also includes other "incidental" coverage designed specifically for the daily operations of a church. Ask about coverage for sexual misconduct, director's & officers’ liability, non-owned & hired auto liability, employment practices liability, pastoral counseling liability, employee benefits liability, religious expression liability, and violent incident expense.

As a trained church insurance specialist, we can provide the tools and information to help you accurately value your church building, including its pipe organ, stained glass, and other valuable fixtures.

First, you will need a commercial/business automobile policy. It is important to have adequate liability coverage for not only the driver but also coverage for his passengers. Insist on a minimum of $1M liability limits to match the general liability limits of your church package policy. First party benefits can cover medical expenses of any and all passengers. Ask about the highest limits available. Also, set up driver guidelines regarding who drives it and how it is used. It is the church's responsibility to make sure qualified and safe drivers are behind the wheel of the van. Finally, assign someone to take care of the general maintenance of the van.

Workers Compensation coverage is mandatory in Pennsylvania for all employers with employees. Churches could argue pastors are self-employed and therefore do not need WC coverage. However, WC coverage is inexpensive protection for the church. If that "self-employed" pastor trips down the steps after a Sunday morning worship service, turns his ankle, and incurs medical bills and lost wages, a WC policy could provide coverage for the loss.

Fire companies are no different than churches and other volunteer organizations…they are made up of excellent people giving of themselves to help and protect others. Firehouses need the same comprehensive protection as other buildings in the community. More importantly, its volunteer members need coverage for themselves personally if they are hurt, injured, or even killed in the line of duty. Turn to a specialty carrier for your comprehensive package of protection.

Again, no policy can protect against all possible loss situations and no two policies are identical. However, a carrier who specializes in benefits for fire companies and their volunteers will have unique coverages available for you and your fellow volunteers. What seems like insignificant benefits on paper can provide significant benefits if you are the one in need of financial help due to an accident while volunteering on behalf of the local Fire Company. Call us today for your company quote.

General "rules of thumb" suggest life insurance equal to 6-10 times your annual salary. However, many factors should be reviewed in determining a more exact amount of life insurance. Those factors include:

• 1) other income sources than salary, including Social Security benefits
• 2) if married, what would be the spouse's earning capacity
• 3) number of dependents
• 4) other death benefits available (e.g.-employer coverage)
• 5) special life insurance needs (mortgage repayment, education needs, estate planning, etc.)

Call us to help you determine your need for life insurance coverage.

That is a good question! The answer will vary depending upon your circumstances. If the amount is so large, the only way to afford it might be through the purchase of term insurance with its lower premiums. However, if your ability to pay life insurance premiums is such that you can afford a fixed or permanent premium, then you need to consider other financial factors in the decision (e.g.-tax bracket, short or long-term needs, rate of return on alternative investments of similar risk, etc.)

The face amount of mortgage insurance typically decreases over time, consistent with projected decreases in the outstanding balance of the mortgage loan. Fixed term insurance, on the other hand, usually remains level in premium and death benefit for a fixed number of years. Term insurance is generally less expensive and maintains a higher death benefit than mortgage insurance.

In certain circumstances, it may be wise to purchase life insurance on children. However, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s). It is of utmost importance that the earning capacity of the primary breadwinner be fully protected through the purchase of the required amount of life insurance before contemplating the purchase of life insurance coverage on children or on a non-wage earning spouse. Life insurance on a non-wage earning spouse is often recommended for paying for household services lost at this individual's death. In a dual-earning household, it is important to protect the income-earning capacity of both spouses.

Employers typically offer benefits like health insurance on a voluntary basis to attract and retain quality employees. Cost of the insurance for the employee is usually paid in full by the employer, while employees contribute to the cost of spouse and dependent care.

Generally, your new employer will offer you their group health insurance benefits after a probationary employment period. You may continue your previous employer's coverage under Federal COBRA regulations for up to 18 months after terminating employment, but at your own cost. Generally, employees opt for their new employer's health insurance plan.

As mentioned, Federal COBRA regulations allow you to continue your current employer's health insurance plan for up to 18 months after terminating employment, but at your own cost. If your spouse is employed, check into adding the family to his/her plan. Otherwise, you will need to secure your own individual health insurance plan. Options for coverage include Short-Term Medical, Christian sharing programs, and www.pennie.com

Health Savings Accounts (HSA's) are offered to individuals and small groups as an alternative to low deductible health insurance plans. An HSA is a two-part plan. Qualified HSA medical plans offer a high deductible, or "catastrophic," health insurance coverage plus a separate account for tax-deductible, tax-deferred savings. Accumulated money in the HSA may be withdrawn for I.R.S.-qualified medical expenses that either are below the insurance plan’s deductible or not covered by the health insurance plan. Individuals and families with HSA plans may deposit maximum limits (as determined annually by the I.R.S.) to a custodial HSA account each tax year the plan is in effect.

Disability insurance (DI) provides income protection for you and your family if you become physically unable to work. Where would the cash come from to pay your monthly mortgage payments, car payment, or credit card balance? DI can put money back into your pocket to pay those fixed expenses.

The need for DI depends on several factors:

• 1) your continued monthly debt obligations
• 2) your spouse's earning ability to replace your lost wages
• 3) your cash reserve to cover unexpected periods of unemployment due to physical limitations
• 4) other sources of income.

Coverage amount depends on some of the above factors. You can usually purchase monthly benefits in an amount of up to 70% of your current income. Depending upon your occupation, you can secure benefits for 1 year, 2 years, 5 years, or "to age 65." Other options worth considering include own occupation rider, guaranteed renewable rider, and a benefit increase option.

Most people refer to nursing home insurance as Long-Term Care (LTC) insurance. However, LTC insurance can cover the whole gamut of health care including home health care, adult day care, assisted living, personal or custodial care, intermediate care, skilled care, and Alzheimer's care.

Generally, Medicare and other health insurance policies only cover limited benefits for LTC expenses. Typical individual and group health insurance policies can cover skilled nursing home stays after a 3-day hospital stay for up to 20 days. Beware: a hospital stay is an admission and not an observation. The type of stay will determine any post-hospital coverage. Typical health insurance policies pay up to 30 days of skilled care only. Other stays in adult day care, assisted living, personal care, intermediate care, or Alzheimer's care are not covered by Medicare or major medical health insurance policies (Medicare Supplement and HMO's included).

Most people rely on their own savings to pay the $10,000-15,000 plus monthly bills associated with nursing home stays. Those who have depleted their assets rely on the State Medical Assistance program to help them pay their expenses. A small percentage of people needing LTC rely on their private LTC insurance policies to help pay and supplement their income to meet monthly expenses.

In comparison to monthly nursing home charges, LTC insurance can be very affordable. However, LTC insurance is not for everyone. Finances determine your need for coverage. If coverage is appropriate, several factors affect the cost, including your age, health conditions, and policy options selected. It is best to work with an independent agent to determine your needs and investigate several options for coverage.

An annuity is issued by an insurance company to provide an income stream to a named beneficiary at some future date. It usually provides a death benefit and a guaranteed minimum interest rate on the money invested in it.

Annuities are typically used for IRAs and other situations where the owner wants to defer income and taxes on the gain until later years. Annuities incorporate an insurance product (a death benefit) and an investment vehicle into one product.