Frequently Asked Questions
Commonly Used Insurance Terms
What is Auto Loan/Lease Coverage?
This optional coverage is available in most states, from a variety of insurance companies. The form provides coverage for the following:
• Leased vehicles - Reimburses you for the difference between the amount due under the terms of the lease and the actual cash value of the auto in the event of the auto's total loss.
• Owned vehicles - Pays any outstanding indebtedness incurred by you for that financed new vehicle in the event that there is total loss or damage to the vehicle and the amount due under the finance agreement is greater than the actual cash value of the automobile.
• Partial Losses - On partial losses, the company will normally pay to have the damages repaired or parts replaced, and the lease or loan gap coverage option is not a factor in the loss settlement.
What Is Loss Prevention?
The process of identifying and acting upon situations that may lead to losses is called "loss prevention." Loss Prevention may involve both simple and complex ways to reduce the likelihood of facing a loss. Besides insurance, you can choose to use protective devices, oral or written contracts to shift the responsibility for a loss to someone else, avoid ownership of items that may cause a loss (such as large pets), avoid dangerous hobbies and activities, or change your environment. Let's look at some areas where you might exercise loss control.
What is an SR-22 Financial Responsibility filing?
An SR-22 filing is a car insurance form, required by many state Departments of Motor Vehicles (DMV) in certain situations, that provides proof of state-mandated liability insurance.
Is flooding covered under my homeowners policy?
Despite what you may think, your homeowners insurance policy doesn't cover damage from flooding. You can not simply buy flood insurance as an endorsement to your current policy. Instead, if you are eligible, you must purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program.
Will my auto insurance cover me when I rent a car?
That depends on the car you're renting, the type of policy you have, and on your insurance company. Under what is called a "family policy," your liability coverage (bodily injury and property damage) and, if you have it, your physical damage coverage (comprehensive and collision) will cover any damages to a rental car, even if you rent it for pleasure or vacation. Under a "personal policy," only your liability coverage will extend to a rental car, and then only if the rental car is needed to temporarily replace your car because of a breakdown, repair, servicing, loss or destruction. You should read your policy or check with your agent to confirm whether or not your insurance protects you when you're driving a rental car.
Why should I buy renter's insurance?
It is inexpensive and covers personal property in your apartment. It also provides limited off premises coverage, motel costs in the event that you had to evacuate the building overnight, and court expenses if you were found liable for an accident in the apartment that resulted in someone else's injuries.