101 Frequently Asked Questions?
We tackled some frequently asked questions that will help even the most educated consumers on different insurance coverage's and scenarios for the every day consumer or business owner in Texas
AUTO INSURANCE
Full glass coverage on your personal auto policy is the coverage that allows you to get your window or windshield fixed without paying a deductible.
In case you didn’t know glass damage to your car falls under your comprehensive coverage (also known as Comp) under the physical damage coverage on your vehicle. Comprehensive Coverage is usually subject to a deductible but most of the time there is a rider giving full glass coverage.
This coverage is not automatic and can be added or removed on each individual vehicle.
How does it work
If your car has glass damage only, you can file an insurance claim to get that glass fixed at no cost to you. This means any chipped, cracked, or broken windshields or windows can be repaired or replaced without you paying a deductible.
Most insurance companies will work directly with the glass repair shops to make sure that your vehicle gets fixed and everybody gets paid the correct way, making it easy for you as the consumer.
First step I would do in the event you do have that claim is to call your agent. Talk to them about the specific damage you have and make sure you carry this coverage on that specific vehicle. Figure out the best course of action if you need to get it repaired or replaced.
Some glass damage is unsafe to drive with and needs to get fixed immediately but, if there’s just a chip in the windshield you might be able to wait a little bit longer before getting it fixed.
When purchasing your auto insurance online without the advise of an independent agent could cause gaps in coverage. This is one that is frequently missed as consumers assume it is automatically included.
To get a review of your insurance coverage’s to make sure you have what is needed and there are no weaknesses in the event of a claim. Click the button below to see what the Next Step in the process is.
Comprehensive and Collision Coverage make up the physical damage portion of your auto insurance policy.
It is the coverage that is going to pay when you have damage to YOUR vehicle.
Physical damage coverage isn’t automatically included and required in Texas. It needs to be added on an individual car basis.
Comprehensive Coverage
Comp, or otherwise known as other than collision, covers you against very specific things. These include
- Fire
- Theft
- Vandalism
- Falling Objects
- If you hit an animal like a deer
Another thing that falls under Comprehensive Coverage is your Glass Damage. Glass Damage usually is included with an endorsement called Full Glass Coverage.
Collision Coverage
Collision coverage basically covers anything else when it comes to damage on your vehicle. Any time you hit a moving or a fixed object, the damage that’s caused to your vehicle that does not fall under comprehensive will fall under collision. Both coverage’s are subject to your deductible which can vary depending on your specific auto policy and what you feel comfortable with.
Wonder how you should choose your deductible.
When should you carry Comp & Collision Coverage?
This will depend on everyone’s situation, but the biggest things to look at include the following
- Value of the vehicle
- Cost to carry this coverage
- Deductible
The reason these 3 are so important is because you need to find out when it makes financial sense to remove this coverage.
We suggest always carrying Comprehensive Coverage since as we discussed above, Comp covers you against things that are out of your control. The cost associated with Comprehensive Coverage is much lower than it is for Collision.
When it comes to Collision coverage we suggest when the value of the vehicle is low enough that you are willing to take the chance at not getting anything for your vehicle when it is in an accident.
Here is an example:
- Car’s value is $1500
- Cost to have Collision Coverage on your personal auto policy is $250
- You carry a $1000 Deductible.
You are automatically spending $1250 the first year if you have an accident with the max you would get back of $1500. You are gambling with $250 in year 1 and break even in year 2.
One of the most asked questions we get every single year especially during the summer months.
- Hey, I am going on vacation and renting a vehicle. Do I need to buy the rental car insurance?
Well, in the state of Texas, you DO NOT need to buy the insurance from the rental car company as long as you’re in the United States or in Canada renting the vehicle, it is a private passenger vehicle, and you currently have an auto policy in place for yourself.
Most states do it differently, but in the state of Texas if you get in an accident with a rental car, your liability insurance will pay to fix the rental car. The damage it caused, and obviously the damage to the rental car.
Downside
If you get in an accident with a rental vehicle and your insurance pays for it, it can affect your future rates. So, if you don’t want to take that little chance that something happens and your insurance premiums go up because of it, you can obviously buy the rental car coverage to offset that. But any major accidents or accidents involving other parties will be reported on your Motor Vehicle Report so the possibility of your insurance carrier finding out and adjusting your rates is still possible.
Stipulations
The biggest factors here are to make sure of those few things.
That it is a private passenger vehicle, you are renting and driving it in the United States or in Canada. If you go overseas, go to another country, you have to buy insurance from them. It’s very important you understand that.
It’s also important to know how it works if you buy a rental truck or other non private passenger vehicles. These will require you to buy the insurance as there is no coverage extended from your policy.
All too often we see “friends” driving other “friends” vehicles. This is usually done without asking questions or doing any homework before letting it happen. It is done as freely as if it is a shirt that you are borrowing.
The problem with this is that your car, assets, and way of life are at risk in the event of an accident.
Now that might seem a little harsh and straight to the point, but guess what, it should!
Insurance will ABSOLUTELY cover if your friend gets in an accident with your car. The issue is that it is YOUR Insurance that is going to cover it.
Rule of Thumb
Insurance follows the vehicle first. It will only follow the driver on a secondary basis.
It’s very important to realize that insurance follows the vehicle, and the plates on the vehicle, versus the driver. So that you’re very cautious at who you let drive and borrow your vehicle.
If for some reason the vehicle’s insurance has minimal coverage, doesn’t have coverage or doesn’t have enough coverage to pay for the accident and the damage that was caused the driver’s insurance policy will become a secondary insurance policy that can pay out on this claim.
What is the Solution?
My word of advice is don’t let anybody drive your car. Only the people that are blood relatives, closest to you that live in your household that should be rated on your insurance policy really should be driving your car.
Now I understand certain circumstances will come up and it might be important for somebody to borrow your car, or to drive your car. Just be aware of the situation and how that can come back on you and your insurance.
Obviously if your insurance pays a claim for another driver it can still increase the rates as well. When your insurance pays out, you could get a surcharge on your policy.
Outside of the typical nervousness of having your teenage driver on the road by themselves that any parent will go through. The second most nerve-racking thing is how much will my auto insurance increase by adding them to my policy.
When your 16 or 17-year-old gets their driver’s license they must be added to your auto insurance policy as a listed driver in your household.
Failure to discuss a child driving could cause issues during a claim or potentially afterward.
But why is it so expensive?
Insurance Actuaries
All insurance rates are calculated and determined based on the insurance company’s actuaries. Actuaries are the people who analyze the claim data to determine who is a higher risk consumer.
Higher risk consumers will pay more for their insurance rates as they have a higher probability of costing the insurance company money.
It is important to know and realize that insurance companies are a for-profit business. They use the data they have available to them to try and figure out the best way to make money.
It is unfortunate but teenage drivers have a much higher chance of getting into an accident based on history and data.
Teenage drivers aren’t the only ones that are usually rated higher, elderly drivers are as well. As drivers get older, their reflexes tend to slow down resulting in more auto claims.
What you can do to lower the cost
The best way to lower your auto insurance rates with teenage drivers is to make sure you are using an independent insurance agent to shop your rates for you. Some insurance carriers will rate your insurance differently if a teenage driver is present in the house. This can cause your current rates to increase more than they should.
Any time you add a newly licensed operator to your policy, your agent should be shopping your insurance through all the options for you.
Other ways you can lower your costs, is to make sure your teen is a good student, has taken driver education, and/or a defensive driving course. Each one of these can be significant discounts for you and your family.
If you do not currently use an independent insurance agent who can provide options for you then click the button below to talk to one of our licensed insurance professionals who can help guide you through some options.
What is the best auto insurance for teen drivers?
They’ve passed their road test; time to add your teen driver, possibly a vehicle, to your existing auto policy.
So what’s next?
When it comes to covering a youthful/teenage operator, not all insurance carriers are created equal. There are some key points to look for in a company that has more discounts available, leading to better rates, without sacrificing coverage.
Technology Advancements
Advances in insurance-based technology can help not only in rates, but in your understanding of your child’s driving abilities.
Telematic devices monitor an operator’s driving habits including
- How hard they brake
- How fast they accelerate from a stop
- Amount of miles being driven, and
- What time of the day / night said miles take place.
Good driving behaviors can be rewarded with a discount.
Insurance Rating
A big factor in the rating of a teen driver is what vehicle they regularly driven.
All licensed household drivers should be listed on your insurance policy. With that said, anyone you give permission to is covered to operate any of your vehicles.
But, when it comes to the rating of your own insurance policy, each driver needs to be rated on each specific vehicle.
Not all Insurance Company’s will look at it the same way, some carriers will rate your teen on the highest rated vehicle, regardless of use. Independent insurance agents have more options available to customize the household drivers to their general use vehicle.
Some Insurance Company’s have specific teen driver programs that can help alleviate that as well. One of our carrier partners, Hanover Insurance Group, has a program that allows the child to only be rated on the vehicle that they drive. This will help the overall rating of the households auto insurance policy but will limit the coverage if your teen drivers a different vehicle.
A great example of where this can come into play is if you have a sports car that they teen driver will never touch.
Discounts: An insurance company that caters to young drivers will have multiple discounts available, these include:
- good student (A or B GPA)
- driver’s education
- accident prevention course discount
- student away from at college.
Multiple discounts available lead to the probability of better rates.
HOME INSURANCE
A renter’s insurance policy will cover two major things:
- Your Contents – Your “Stuff”
- Your Liability Protection
Both of these coverage’s are equally important.
Contents
Your contents coverage is the coverage that will replace your personal property. This means your clothes, furniture, electronics, etc. All of this is considered your personal property.
Renter’s insurance policies will give you flexibility in choosing the contents coverage limit. With each insurance carrier having its own minimum coverage usually ranging from $20,000-$30,000 in coverage.
People tend to underestimate the amount of “stuff” they have and what it would cost to replace it.
One additional endorsement you want to make sure is part of this, is to make sure the Replacement Cost endorsement is included. This way if something happens you will get enough money to actually replace your contents and not just the depreciated value.
Make sure you are aware that a Deductible will be applied to this contents limit and that you know what that is before filing a claim.
Liability Coverage
Personal liability coverage will cover you in the event their is a claim and you are held liability for either the property damage or bodily injury to others.
An example of this, you as the tenant leaves the water running causing property damage in the apartment below you. Your liability coverage will protect you and pay for the damage you caused.
This is a common question or statement we get quite often. Many consumers believe that jewelry falls under you personal property coverage on your home, renters or condo insurance policies.
Now, while the answer to this is yes it does, there are limitations on the amount of jewelry and what it is covered for.
Limitations
Every Texas Homeowners Insurance policy has limitations when it comes to jewelry, along with other contents like silverware, guns, furs, stamps, coins, cash and business property.
Coverage will range from $1,000-$5,000 total for jewelry on your homeowner’s insurance.
Each of the other contents I mentioned have there own limitation numbers as well.
What’s Covered?
The standard coverage on your jewelry policy will cover against any Named Peril losses. This means that the jewelry that is stolen or damaged due to a fire is covered on your primary homeowner’s insurance.
But, the two most asked about or requested coverage’s when it comes to Jewelry are:
- Lost
- Broken
In order for your homeowner’s to cover your jewelry on an All Risk basis, which includes if you lose it or it gets broken, you will need to either schedule this on your homeowner’s insurance as an endorsement, or you will need to take out a policy called a Jewelry Floater.
Both are fine choices depending on how much jewelry coverage is needed and what the appraised value of the jewelry is.
Have you ever noticed that your homeowner’s insurance premium’s increase very slightly each year?
Why is this?
Inflation Guard
Every homeowner’s insurance policy has what is called an inflation guard built into their policy.
An inflation guard is on the policy to increase your Dwelling Amount each year by a small percentage to keep up with inflation like the rising construction prices.
When you have a homeowner’s insurance policy that is written at Replacement Cost Coverage, you obviously want to make sure you have enough coverage to replace or rebuild your home in the event of a claim.
Without the inflation guard, your Dwelling Coverage would stay flat and not increase each year meaning the longer you stay with an insurance carrier the further away you would be from actually having the right amount of coverage.
Premium Increases
Since the Dwelling Coverage would be increasing each year, your premiums will get increased slightly with it.
As many consumers think this is a negative and that their homes are already over insured. I encourage you to look at what the cost of construction is doing in New York.
Construction prices have been on the rise and continue to be. The last thing you want to happen if you have a major house claim is to find out you didn’t have enough coverage to fix or rebuild the way you want.
Buying a home can be one of the biggest investments in your entire life.
The one thing that you shouldn’t worry about, is how much does home insurance cost to protect that investment.
It should be, do I have the right coverage to protect it in case something happens.
Since that tends to not be the case, let’s break down what goes into the cost of homeowner’s insurance.
Home insurance costs
Like most insurance policies many factors go into consideration when determining your homeowner’s insurance rates.
These include but are not limited to:
- Where is the house located- is it near the coast or in the middle of the woods
- What protection class are you rated- this is determined by the type of fire department responds to your house, how many miles away, and the number of feet you are to a hydrant.
- When was the house built?- Newer houses are less expensive to insure
- How big is your home, 3,000 square feet, or 1,000 square feet?
- What style house is it. Is it a 1 story ranch or 2 story colonial?
These are just a few of the factors that go into consideration when determining the right coverage and calculating the cost.
Homeowner’s insurance policies are written to replacement cost. A house that is 3,000 square feet will need more coverage than a house that is 1,000 square feet. Increased coverage limits will increase the insurance premium.
Why is my insurance more than _____?
Not only will home insurance vary from house to house, but it will also vary from homeowner to homeowner.
You will usually not pay the same as the person who owned the house before you or how much your neighbor pays for a similar built house.
The main reason for this is credit.
Credit-based scoring is a major determining factor when calculating insurance rates, especially for your home and auto insurance policies.
Other factors, like how long you have owned a house or whether you are a first-time buyer and whether you are packaging your auto and home insurance policies together will all make a huge difference.
Ways you can lower your home insurance premium
As we just mentioned credit plays a roll in what your insurance premiums are, so improving your credit will help you in the long run to reduce your insurance premiums.
Here are a few other quicker ways to lower your premium
- Install a central station fire and burglar alarm
- Install a water detection device
- Package your auto and home insurance premiums together
- Stay claim free
It is important to remember that the insurance companies are a for-profit business. The more money they make the less likely your policy will increase.
Putting safety devices and security measures in place will help keep you and your home claim-free.
The bottom line is home insurance costs can vary, based on the specific insurance company you go with and the dozens of factors that go into their rating.