AUTO INSURANCE FAQ
1Is it mandatory to have no fault insurance in Florida?
FL Auto Insurance Requirements. Florida is a no-fault insurance state. If you are injured in an accident, your car insurance will pay your medical costs up to your policy's limits, regardless of who caused the accident.
2What type of insurance do you need for a vehicle with four or more wheels?
The Florida Motor Vehicle No-Fault Law, requires all owner/registrants of a motor vehicle with four wheels or more to carry a minimum of $10,000 of Personal Injury Protection (PIP) and $10,000 of property damage liability (PDL) if you own a motor vehicle in Florida.
3What is PIP insurance coverage in Florida?
PIP stands for Personal Injury Protection and under Florida law it is required that every vehicle owner and driver on the road have $10,000 worth of PIP insurance coverage. PIP benefits are paid by your own insurance company if you are in an accident.
4What car insurance is required in Florida?
What car insurance is required in Florida?
HOMEOWNERS INSURANCE FAQ
1WHAT IS HOMEOWNERS INSURANCE?
Homeowners insurance is an insurance policy that protects you financially in the event that your home and property is damaged in a covered peril, or in the event of a covered lawsuit. Perils that are typically covered by a standard home insurance policy include fire, wind, lightning, hail and theft. While no one plans on losing their home or possessions to any of these perils, it unfortunately happens every day. Ask yourself this: If your home was ever destroyed in a fire, for example, how would you pay to rebuild your home? That's where your homeowners insurance comes in. Homeowners insurance protects the investment you have made in your home by providing you with coverage for specific hazards. But your home insurance doesn't stop there. In the event that someone was filing a lawsuit against you for accidental damage you caused to their property, how would you pay for the costly legal fees? Standard homeowners insurance also contains liability coverage that protects you and your family against lawsuits where another party finds you liable for damage to their property or person. Typically, a standard home insurance policy includes the following coverage: Standard Home Insurance Coverages Coverage A – Dwelling Coverage B – Other Structures on Your Property Coverage C – Personal Property/Contents Coverage D – Loss of Use Coverage E – Personal Liability Protection Coverage F – Medical Payments
2WHAT IS DWELLING COVERAGE?
Dwelling coverage (Coverage A) is the portion of your home insurance policy that covers the cost of rebuilding /repairing your home in the event that it is damaged or lost in a covered peril such as wind, hail, lightening or fire. Separate policies are needed for damages and losses caused by earthquake and flood insurance as these are not covered under standard home insurance policies. The amount of dwelling coverage that you should purchase should be enough to cover the cost of rebuilding your home in the event of a complete loss. Do not confuse this amount with the market value of your home, as the market value includes the value of your land. Remember that in the event of a disaster, your land will not be lost, only the buildings that stand on it. To determine the replacement value of your home please contact your agent.
3WHAT IS THE DIFFERENCE BETWEEN REPLACEMENT COST OF MY HOME AND ACTUAL CASH VALUE?
The replacement cost of your home is how much it would cost to replace your home and its contents with new materials at current prices in the event of a loss. Actual cash value (ACV) is the value of your property at the time of a loss. ACV may be determined as the replacement cost minus depreciation.
4I RECENTLY REVIEWED OUR HOME INSURANCE POLICY AFTER NOT LOOKING AT IT FOR YEARS. I AM CONCERNED THAT WE ARE NO LONGER ADEQUATELY INSURED. HOW CAN WE FIGURE OUT HOW MUCH HOME INSURANCE WE NEED?
You will need enough home insurance to cover the cost of the following: 1. The structure of your home: To estimate the amount of insurance you will need to cover the structure of your home please contact your agent. 2. Your personal possessions: To determine the value of your personal possessions and belongings you should perform a home inventory. 3. Additional Living Expenses: In the case that your home is damaged and you must live somewhere else while repairs are performed you will need coverage for those costs. A home insurance agent can help you determine the amount of additional living expense coverage you may need. 4. Liability: Your liability to others for accidents that may happen at your home. A home insurance agent can help you determine the amount of liability coverage you need. Asking a licensed home insurance agent is always a great way to determine how much home insurance you need. They can help you determine specific coverage levels and discuss appropriate deductibles.
5WHAT DOES HOMEOWNERS INSURANCE PROTECT AGAINST?
Generally, homeowner's insurance will cover replacing your home and personal property up to certain limits. Most disasters are covered, but not earthquakes or flooding, and homeowner's policies do not cover the normal aging of your house. Homeowner's insurance also may include liability coverage, which covers personal injuries to other people that happen due to your negligence.On the declarations page provided by your agent, and within your policy, you will see the various coverage types identified as follows: • Coverage A - Dwelling — Pays for damage or destruction to your house and attached structures, such as a screen enclosure or carport. • Coverage B - Other structures such as a garage, deck or swimming pool • Coverage C - Personal Property — Covers the contents of your house, including furniture, clothing and appliances, if they are stolen, damaged, or destroyed. • Coverage D - Loss of Use — Pays for additional living expenses if your home is uninhabitable due to a covered loss. Most standard Florida Homeowners Insurance policies pay 10% to 20% of the amount of your Dwelling coverage • Coverage E - Liability — Protects you against financial loss if you are sued and found legally responsible for someone else's injury or property damage • Coverage F - Medical Payments — Covers medical bills for person(s) injured on your property.
6WHY SHOULD YOU BUY HOME INSURANCE?
• Owners: To protect both your house and personal property. • Tenants: To protect your furniture and personal property. • Everyone: Protection against liability for accidents that injure other people or damage their property
7HOW MUCH DWELLING COVERAGE IS NEEDED?
The amount of coverage that you need depends on what it would cost to replace your home in the event of a total loss. The amount of coverage you purchase for your home can best be determined by a licensed and experienced insurance agent. They will calculate your premium based on the size and building type of your home, your liability protection needs and any endorsements or riders that need to be added to your policy.
8WHAT IS PERSONAL PROPERTY?
Personal Property is the contents of your home and other personal belongings owned by you and family members living with you.
9WHAT IS MEDICAL PAYMENTS COVERAGE?
Regardless of who is at fault, this coverage pays medical expenses for others accidentally injured on your property. • Medical Payments coverage does not apply to you or members of your family who live with you. • Like Personal Liability it also does not apply to injuries arising out of the operation of an auto or from activities involving your at-home business.
10WHAT IS REPLACEMENT COST?
Replacement Cost is the amount it would take to replace or rebuild your home or repair damage with materials of similar kind and quality without any deduction for depreciation.
11HOW OFTEN SHOULD I REVIEW MY POLICY?
Experts recommend you review your policy each time it comes up for renewal. Additionally, it’s a good idea to reevaluate your coverage as a result of the following situations: • Following a home renovation • When an occupant moves in or out • After purchasing a high-end luxury item
12HOW CAN I TELL IF I'M COVERED FOR DAMAGES CAUSED BY STORMS, BAD WEATHER OR OTHER SEVERE WEATHER?
Damages caused by windstorms, hail, hurricanes and tornados are covered in all homeowner's policies. However, some insurers may limit coverage of homeowners residing in hurricane prone areas. Additional coverage may be purchased for accumulating snow or ice may not otherwise be covered. Flood damage is not covered in any homeowner's policy and flood insurance must be purchased separately.
13WHAT'S THE RIGHT AMOUNT OF INSURANCE FOR MY HOME?
Your Home Insurance Coverage should match the value of your home. Home owners insurance cannot cover the land your home is on, only the structure. That means that the insurance amount could be less than the purchase price or loan amount. If you insure your house for $100,000, that´s the most you will get if it is destroyed, even if it would cost more to replace it. The Declarations Page on the front of your policy shows how much coverage you have. Talk with your agent or company representative if you have any questions about your insurance limits.
14I HAVE A VERY VALUABLE PIECE OF JEWELRY. IS THIS COVERED BY MY BASIC POLICY?
If you own a item of specific value, you can add an endorsement, called Scheduled Personal Property (SPP), which acts like a mini-insurance policy on the specified and listed item or add Extended Coverage, which increases protection on jewelry, watches and furs (up to an aggregate limit for all of these items together which is specified on your policy). Both provide all-risks coverage (except for a few exclusions). Many people get extra protection on jewelry, cameras, coin and stamp collections, fine arts, furs, golfing equipment, guns, musical instruments, outboard motor boats, and silverware/goldware.
15I'M BUILDING A NEW HOME. DO I NEED TO INSURE IT WHILE IT'S UNDER CONSTRUCTION?
You should consider insuring your new home during construction. Otherwise you may be exposing yourself to a great deal of risk if a fire, theft or other event damages or destroys your partially completed home.
16HOW LONG SHOULD I WAIT FOR THE INSURANCE COMPANY TO HANDLE MY HOMEOWNER'S CLAIM?
Most individuals with insurance claims receive contact from the insurance adjuster within 48 hours after the claim is reported. The resolution period of a claim will vary, depending upon how extensive the damage from a catastrophe. Generally, the insurance adjuster will schedule a time to meet with the homeowner and adjust the loss.
17WHAT DAMAGE TO MY HOUSE WOULD NOT BE COVERED BY MY HOMEOWNER'S POLICY?
It depends on the type of policy you own. But in general, unless you buy additional coverage, you won't be compensated for losses due to floods, earthquakes, nuclear accidents, wars, intentional damage, and normal wear and tear. Other exclusions may also apply.
18I WANT TO BUY A CONDOMINIUM. WILL MY HOMEOWNER'S POLICY BE DIFFERENT FROM THE ONE I HAD WHEN I OWNED A HOUSE?
Insuring a condominium is different from insuring a house because of the way ownership is structured. A homeowner's policy covers against losses, and you can only suffer a loss if you have ownership. Because there are areas of common ownership in a condominium complex, your homeowners association may have a master policy. The extent of the coverage you buy will depend on what the master policy covers. The standard homeowner's policy for condominiums is called HO-6. It will likely cover your personal property, shield you and your family from some types of liability, plus pay to repair any portion of the unit you own under the terms of the condominium or cooperative documents.
19WHO ELSE IS COVERED UNDER MY HOMEOWNER'S POLICY?
In general, a homeowner's policy will have a named insured, which is usually the owner or tenant named on the deed or lease. The named insured's spouse is covered as well, even if he or she is not named on the policy declaration. Other users and residents also may be covered to a lesser extent by the personal property and liability provisions in the policy.
20WHY BUY RENTER’S INSURANCE?
Just like homeowner's insurance, renters face risks of loss. Sure, since a renter does not own the dwelling unit, she does not risk the residence itself. As a renter, the greatest risk is damage to or loss of personal property. Renters can also be liable to third parties that are injured while at the residence. If you rent, insurance acts as a risk transfer device to protect you against a catastrophic loss. In exchange for payment of a premium, you transfer the risk of property loss and liability to third parties to an insurance company.
21AM I REQUIRED TO LET THE INSURANCE COMPANY INSPECT MY HOME?
Yes. The insurer is entitled to be familiar with the property being insured. Most inspectors will call for an appointment, especially if they want to inspect the inside of your home. If an insurer issues "loss control recommendations" as a result of the inspection, you must make the necessary repairs or changes to make the property insurable and to reduce the chances of loss. If you do not comply with these recommendations, the insurer may cancel your policy.
22WHY IS THE INSURANCE COMPANY NOT RETURNING ALL OF MY PREMIUM AFTER THE POLICY WAS CANCELLED?
Depending on the type of policy, you may be required to pay a minimum premium, or the premium may be fully "earned." In other instances, if you replaced your coverage with a different company, during the policy term, you may be subject to a "short-rate" penalty. You might also have some premium due for recent changes in coverage.
23WHY ARE CONTENTS REPLACEMENT COST COVERAGE AND BUILDING REPLACEMENT COST COVERAGE SO IMPORTANT?
Replacing your home and your furnishings, clothing and other possessions could be very expensive. Contents replacement cost is a critical part of your homeowners coverage. Why? If your television is stolen, your standard homeowners policy would cover the purchase price less depreciation applied to the stolen set. Under a policy with replacement cost coverage you are covered for the cost to replace the set. You do not have to worry about depreciation or inflation. Most of your personal property may be covered. However, antiques and rare items are subject to the actual cash value provisions of the policy.
24HOW MUCH DOES HOMEOWNERS INSURANCE COST?
The cost of homeowners insurance can vary tremendously depending on the amount of coverage you purchase and the part of the country you live in. The amount of coverage you purchase for your home can best be determined by a licensed and experienced insurance agent. They will calculate your premium based on the size and building type of your home, your liability protection needs and any endorsements or riders that need to be added to your policy.
Life Insurance FAQ
1Who Needs Life Insurance?
Your need for life insurance varies with your age and responsibilities. It is a very important part of financial planning. There are several reasons to purchase life insurance. You may need to replace income that would be lost with the death of a wage earner. You may want to make sure your dependents do not incur significant debt when you die. Life insurance may allow them to keep assets versus selling them to pay outstanding bills or taxes. Consumers should consider the following factors when purchasing life insurance: • Medical expenses previous to death, burial costs and estate taxes; • Support while remaining family members try to secure employment; and • Continued monthly bills and expenses, day-care costs, college tuition and retirement.
2What is the Right Kind of Life Insurance?
All policies are not the same. Some give coverage for your lifetime and other cover you for a specific number of years. Some build up cash values and others do not. Some policies combine different kinds of insurance, and others let you change from one kind of insurance to another. Some policies may offer other benefits while you are still living. There are two basic types of life insurance: term insurance and permanent insurance.Term InsuranceTerm insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income. Term insurance covers you for a term of one or more years. It pays a death benefit only if you die in that term. Term insurance generally offers the largest insurance protection for your premium dollar. It generally does not build up cash value. You can renew most term insurance policies for one or more terms, even if your health has changed. Each time you renew the policy for a new term, premiums may be higher. Ask what the premiums will be if you continue to renew the policy. Also ask if you will lose the right to renew the policy at a certain age. For a higher premium, some companies will give you the right to keep the policy in force for a guaranteed period at the same price each year. At the end of that time you may need to pass a physical examination to continue coverage, and premiums may increase. You may be able to trade many term insurance policies for a cash value policy during a conversion period even if you are not in good health. Premiums for the new policy will be higher than you have been paying for the term insurance.Permanent InsurancePermanent insurance (such as universal life, variable universal life and whole life) provides long-term financial protection. These policies include both a death benefit and, in some cases, cash savings. Because of the savings element, premiums tend to be higher.
3How Much Life Insurance Do I Need?
Ask yourself the following questions: • How much of the family income do I provide? • If I were to die, how would my survivors, especially my children, get by? • Does anyone else depend on me financially, such as a parent, grandparent, brother or sister? • Do I have children for whom I would like to set aside money to finish their education in the event of my death? • How will my family pay final expenses and repay debts after my death? • Do I have family members or organizations to whom I would like to leave money? • Will there be estate taxes to pay after my death? • How will inflation affect future needs? Some insurance experts suggest that you purchase five to eight times your current income. However, it is better to go through the above questions to figure a more accurate amount.Tips on Buying Life Insurance• Make sure you feel confident in the insurance agent and company. • Decide how much you need, for how long, and what you can afford to pay. • Learn what kinds of policies will provide what you need and pick the one that is best for you. • Do not sign an application until you review it carefully to be sure the answers are complete and accurate. • Do not buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy. • When you buy a policy, make the check payable to the company, not the agent.
4When I bought my life insurance policy, the agent said it would be "paid up" after ten years, but it’s been that long and I’m still getting bills. Why?
Your contract (insurance policy) may provide for guaranteed interest rates and/or dividends the insurance company will pay on your premiums. But your premiums must make very high earnings before they will "pay up" your policy. The company must stand behind items that are guaranteed in the contract. Promises of "paid up" life insurance are illegal when based on non-guaranteed values. If you have documentation of the agent promising this, your state insurance department may be able to help. Documentation would include any writing containing the promise -- even an informal, handwritten note or a similar notation by agent.
5Who can take out a policy on my life?
Only someone who has an "insurable interest" can purchase an insurance policy on your life. That means a stranger cannot buy a policy to insure your life. People with an insurable interest generally include members of your immediate family. In some circumstances your employer or business partner might also have an insurable interest. Insurable interest may also be proper for institutions or people who become your major creditors.
6Must my beneficiary have an insurable interest?
No. If you buy a policy on your own life, you become the owner of the policy. As the owner, you can name anyone as beneficiary, even a stranger!
7What about companies that advertise “no physical exam?”
The insurance may be more expensive than if the company required a physical. Although there is no physical, you will probably have to answer a few, broad health questions on your application.
8Some life insurance ads claim “you can not be turned down.” What's the catch?
Such ads are for "guaranteed issue" policies that ask no health history questions. The company knows it is taking a risk because people with bad health could buy their policies. The company balances the risk by charging higher premiums or by limiting the amount of insurance you can buy. The premiums can be almost as much as the insurance. After a few years you could pay more to the insurance company than it will have to pay to your beneficiary. Such policies may offer only the return of your premiums if you die within the first couple of years after you buy the policy.
9Why is term life often called “temporary” insurance?
Insurance agents sometimes refer to term insurance as "temporary" because the term policy lasts only for a specific period. It is probably no more "temporary" than your auto or homeowner insurance. Just like term, those types of policies provide coverage for a specific period of time, and must be renewed when that period ends.
10Why are some insurance agents reluctant to sell term insurance?
An agent may believe term is risky, but only because you could have a hard time buying a policy in the future if your health deteriorates or you cannot afford the higher premiums. Commissions could also be a reason for an agent who discourages term. The agent often makes less money for selling term than for other forms of life insurance.
11What do I get when I buy term insurance?
You have bought and received the company's guarantee that if you die during the term of the policy, it will pay a death benefit to your beneficiary.
12Does that mean I've wasted my money if I don't die?
No more than you have wasted money by buying car insurance but never having an accident. You've purchased peace of mind. With term life insurance, if you die during the term, you know the company will pay your beneficiaries.
13An insurance agent has suggested I switch term companies every couple of years to take advantage of the company's promotional rates in the first couple of years. Anything wrong with that?
Nothing wrong, but there is always a risk when you switch polices that you could be subject to a new contestability period. You start a new, 2-year contestability period anytime you switch . If you die during that 2-year period, the insurance company can (and probably will) investigate the statements you made on your application . If you've given inaccurate or incomplete answers, the company may (and probably will) refuse to pay the death benefit.
14I understand my permanent policy would be “fully paid up” at age 65. What does that mean?
"Fully paid up" means just that. You have made enough premium payments to cover the cost of insurance for the rest of your life.
15What happens to the cash value after the policy is fully paid up?
The company plans to use the cash value to pay premiums until you die. If you take cash value out, there may not be enough to pay premiums. The company could require you to resume paying premiums, or reduce the amount of the death benefit to an amount that the remaining cash value will support.
16I had a policy that was paid up; now I'm told I don't. What can I do?
You may have signed papers that permitted the cash value of your paid up policy to be used to pay for another, larger policy. If you're not sure or can't remember, call the insurance company.
17What is a “participating” policy?
That is a policy that may pay you dividends. You have a chance to "participate" in the company's earnings. A life insurance dividend is actually a refund of part of your premium. When a company collects more money in premiums than it needs to pay death claims and maintain the insurance pool for future claims, the company may pay dividends at the end of that year.
18An insurance agent has suggested that I buy term instead of whole life. Does it makesense to buy term and invest the difference?
"Buy term and invest the difference" has been a popular sales slogan for term life. The pitch compares term, the least expensive form of life insurance, with other kinds of life insurance. Example: • $100,000 death benefit at age 35 • Annual whole life premium: $1,800 • Annual renewable term premium: $250 • Difference: $1,550 What are your choices? 1. Buy whole life. The “difference” is used to keep your premiums lower than the actual cost of insurance as you get older. 2. Buy term. You keep the difference. In addition, make sure you consider the following: • As you get older your term premiums will increase to keep up with the cost of insurance; • If you invested the difference, you could use your investment to pay the higher cost of insurance; • If you spent the difference you will have to dip into other savings to pay higher premiums; and • If your health deteriorates you may not be able to buy a new policy
19For 10 years I paid the insurance company $1,000 every year. That's $10,000! But when I cashed in the policy they sent me only $5,800. Where did the rest of my money go?
The rest of the money paid for insurance. You were entitled to only the cash surrender value — that is, the amount you had paid to "pre-fund" insurance in your old age. The amount would have been even less if you had borrowed money that had not yet been repaid.
20How much cash value is in my policy?
Read your policy. It has a table of cash values that should provide the answer. Call your agent if you are still not sure of the cash value amount.
21What happens to the cash value in my policy when I die?
When you die, the insurance company will pay the death benefit. No matter how much cash value you may have had in the policy the moment before you died, your beneficiaries can collect no more than the stated death benefit. Any loans you have not repaid (plus interest) will be subtracted from the death benefit. The result: your beneficiary could wind up with less than the face amount of the policy. The exception: some whole life policies pay both the death benefit and the cash value when you die.
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