5 Common Insurance Questions Answered

As a licensed insurance professional I am asked what seems like the same questions from friends and family members all the time. I am sure these are questions a lot of people might have so I have compiled a list of the most common.

How much liability insurance do I need? This is a big one. A lot of people think insurance agents are just trying to rip them off when it is suggested that they get a higher limit. A good agent is trying to watch out for your best interests. They make money off your continued renewals so it doesn't make sense to over insure someone and have them leave when the policy is up for renewal. A good rule of thumb is to carry enough insurance to protect what you have. If you own a home and you don't have enough liability insurance when you are at fault for an accident, you could lose it. I had a case where a client was in a minor rear end collision and the other driver checked to see how much my client's house was worth the very next day! You might be surprised to find out you can usually raise your liability insurance without too much of an increase in your rates. You've worked hard to buy the things you love, protect them.

You have just been in a minor accident and know that it is going to cause your insurance rates to go up. You know you are at fault. Should you pay cash for the other guy's damages? No! If the other person is less than honest they can take your cash and then call your insurance company and file a claim anyway. The insurance company will probably pay for it because they have no way of knowing that you paid the customer. Even if you tell them they will probably still pay the claim because it is usually cheaper than going to court. You can take the gamble but it might end up costing you more.

Your friend just got this great quote for insurance because he "forgot" to mention his speeding tickets and at fault accidents. Should you try it? No. Let's say you get this great quote and buy the insurance and cancel your old policy. You pay your first months premium in advance but the next month you get a bill that is double your original rate. It is more than your old insurance so you try to go back. Except you can't get your old rate because they ran your driving history and find out about the speeding ticket they didn't know about before. Insurance companies are going to run your driving history when you buy a new policy. It may be at the time you purchase the policy or it might be later when it hits underwriting. However your current insurer may not find out about that recent speeding ticket until they rerun your record. It might be another 3 years before it shows up depending on how often your insurer checks. Go ahead and get a quote, just be honest about that driving history.

Your car once again is hit while it is parked on your street. You tell your insurance company and at your next renewal they raise your rates. Why should you have to pay for other people hitting your car? This is a very frustrating situation. You shouldn't be penalized for other people's bad driving. The thing most people forget is insurance is a business. The insurance companies are out to make money. If the people around you are idiots with no insurance and can't seem to keep from hitting your car the insurance company has to pay. They are not going to keep paying out claims without passing the cost on to you. Is it fair? The insurance company would say yes but most insured would say no.

You are driving along at night and spot a deer in the road. You can't stop in time. Should you swerve and miss the deer but plow into the trees along the side of the road or hit the deer? If you hit the animal it is a not at fault accident. If you swerve and hit something else it is an at fault accident. If you are basing this decision on dollars don't swerve because at fault accidents generally cost you more than not at faults. However this is one time where dollars should not be your number one concern. If you or your passengers are going to be hurt by hitting the animal, swerve! This is the one thing your insurance company and you will both agree upon, your safety is the number one concern.