Purchasing Property andCasualty Insurance

Don’t try this at home –

Get an Expert! Get an Agent.

“Inside information”How are your rates determined?

Auto Insurance Credit Location (rural vs.

urban) Vehicle Age & marital status

of drivers Driving record

Property Insurance Credit Local Fire Dept.

rating: 1 – 10 Replacement Value

of property Prior claims

“Inside information”How can you purchase insurance?

With an Agent Product knowledge Helps you to pick proper

coverages & limits May be able to select from

many different companies Can save you the time of

searching yourself

Without an Agent Online access – you can do it

anytime from anywhere You will have to choose the

proper coverages & limits Difficult to compare prices &

factor in company strength, different policy benefits

Can be time consuming

“Inside information”OK, so I’m going through an Agent;

how do I pick one?Captive

Represents 1 primary company (Ex. Allstate, State Farm)

Limited number of products; some don’t offer commercial insurance coverage

Can’t switch you to another company if your situation changes & your rates increase or you’re cancelled

Independent Represents several companies Wide variety of products for

many types of individual and business clients

Can switch you to another company if your situation changes or you don’t like the company or service

How do I compare Agents? Are they qualified? Which companies do

they represent?http://www.scc.virginia.gov/boi

Do they belong to a professional association?www.piavadc.comhttp://www.iiaba.net/VA/default?ContentPrefer

ence=VA&ActiveTab=STATE&ActiveState=VA

Purchasing Auto Insurance What coverages do I need?

Bodily Injury and Property Damage Liability This pays the injured party if you are at fault This is the basic required coverage in Virginia and in

most statesUninsured Motorist and Underinsured Motorist

This pays you if the party at fault has no insurance or not enough insurance

In Virginia, this coverage amount must be equal to or greater than the Bodily Injury & Property Damage Liability amount, unless you sign a waiver

Purchasing Auto Insurance, cont’d

How much Liability coverage do I need?How much damage are you going to cause?

State minimum: $25,000 per person/$50,000 per occurrence and $20,000 property damage;

Is that enough? Hint: do you see many $25,000 lawsuits? Might you pay more than $25,000 for a hospital visit, Doctor’s care, surgery, rehabilitation for the person(s) you injured to get well after an accident? Suggestion: get as much as you can afford. You are legally responsible for any damages not covered by your insurance policy.

Virginia Drivers:Insurance Requirements

If you are caught driving without insurance or you did not pay the uninsured motorist fee, DMV will suspend your driving privilege until you:

pay a $500 fee, and Pay a $145 reinstatement fee and Buy insurance and have your insurance company file a

certificate certifying that you have a policy with the required coverage limits. Every company charges a fee for this service. You will have to file this certificate of insurance for three years from the date you regain your driving privileges.

Purchasing Auto Insurance, cont’d

Other Optional Personal Auto Coverages: Coverage on Property Damage to your vehicle

Collision – your vehicle hit something or was hit by another vehicle, and the other party was not at fault

Comprehensive (aka “Other than Collision”) – damage not due to a collision

Glass breakage, Fire, theft, vandalism, hail, pet chews the upholstery

It also pays for collision from an animal (deer, for example)

Purchasing Auto Insurance, cont’d

Other optional coverages: Medical Expense and Income Loss

Pays all reasonable and necessary medical and funeral expenses for you or others injured or killed in an accident while riding or driving in your auto.

Includes hospital, surgical, rehabilitative, chiropractic, x-ray, dental, professional nursing, prosthetic, and funeral expenses.

It will also cover you or members of your family if you are struck by an auto while walking or while riding in another auto.

This coverage will pay for medical and funeral expenses even if you cause the accident

Payments are not “coordinated” with any other medical coverage

Medical Expense and Income Loss

Examples: 1) “Soccer Mom” has a fender bender while

driving team to practice. Could pay for x-rays & checkup at local ER

2) You are in a car pool and the driver of your car pool is at fault, but you find out they are uninsured. Your Medical Coverage would pay up to your policy limit.

Purchasing Auto Insurance, cont’d

Other optional coverages: Medical Expense and Income Loss, cont’d

Loss of Income Benefits Coverage Pays you, your family, or others in your auto for

loss of income up to $100 per week for a period not to exceed 52 weeks.

Pays a weekly amount X the number of vehicles insured; for example, a 3-car auto policy would pay $300/week

Not coordinated with any other benefits (Workers Comp or Disability payments, for example)

Purchasing Auto Insurance, cont’d

Other optional coverages to consider: Transportation Expense (Rental Reimbursement)

Reimburses you for the expense of renting a substitute vehicle if your auto is withdrawn from use for longer than 24 hours and the withdrawal is caused by a collision or by a comprehensive loss

Towing & Labor Costs Auto Loan/Lease (“Gap” insurance) Repair or Replacement Cost Trip Interruption Extended Non-owned coverage

Purchasing Homeowner Insurance

Why do you need it? Required for a mortgager to approve a

loan Secures financial investments of insureds Protects insured’s future with liability

coverage Repairs the home after disasters and

catastrophes

Purchasing Homeowner Insurance, cont’d

Dwelling Coverage for all real property and improvements to land Home, other structures, piers, wharves, docks, fences,

swimming pools, tennis courts, etc. Personal Property

Personal property of the owner on and off (limited) the premises

Furniture, clothing, appliances, equipment, household items, books, other personal items

Additional Living Expense Added cost if you are forced to leave the home due to a

covered loss (Ex: Fire forces you to move to an apartment – monthly cost of the apartment, increased food expenses, having clothes cleaned commercially instead of at home, etc.)

Purchasing Homeowner Insurance, cont’d

Personal Liability and Medical Payments to OthersPersonal Liability – minimum is $100,000 and

can purchase higher limits

Purchasing Homeowner Insurance, cont’d

Optional Homeowner Coverages Water Backup of Sewers or Drains & Sump

Overflow Ordinance or Law Coverage Identity Fraud Expense Personal Property Replacement Cost Personal Injury Loss Assessments Scheduled Personal Property Incidental Motorized conveyances

Purchasing Business Insurance

What will you be insuring? Property

Building, if owner Contents

Furniture, equipment, vehicles used in business, data, intellectual property

If you’re a tenant – tenant betterments & improvements Liability

Property damage Medical Payments Personal injury – libel, slander, false arrest

Purchasing Business Insurance

What will you be insuring…cont’dWorkers Compensation

Injuries on the job to employees Medical expense Rehab Weekly compensation Payments to dependents for injuries resulting in death

Protects employer from suit by employee for injuries on the job

Purchasing Business Insurance, cont’d

What determines your premium?First – do you qualify for standard insurance

or must you go to the Excess & Surplus Lines market?

Years in business (3+ is standard) Prior claims Credit rating Type of business

Purchasing Business Insurance, cont’d

What determines your premium?Type of business – level of risk for the

insurance company (Ex.: health care facility vs. gift shop)

Amount of coverage Building value Contents Payroll

Purchasing Business Insurance, cont’d

Determining premium, continued

Type of policyDeductiblePrior claimsLocationEndorsements added to the basic policy

(“Bells & whistles”)

Purchasing Business Insurance, cont’d

How can you help lower your premium? Run a tight ship

Drug free Background checks on employees DMV license checks on drivers Fire, smoke & burglar alarms Safety talks Risk review with your Agent Higher deductibles Maintain good credit

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