INSURANCE
FREQUENTLY ASKED QUESTIONS
Auto Insurance FAQ’s
Q: What are some things I can
do to lower my automobile insurance rates?
A: The easiest thing to do is let B&A get quotes from
several companies. Look for any discounts for which you may qualify. Actions
you can take are to increase your deductible or take a defensive driving
course.
Q: What should I consider
when purchasing automobile insurance?
A: Base your decision on value. The premium you pay
should be compared to the claims and policy service, protection and advice you
receive. The companies we represent deliver excellent value. Purchase the
amount of liability coverage that makes sense to you.
Q: I have an older car whose
current market value is very low - do I really need to purchase automobile
insurance?
A: Texas state law requires all drivers to
have at least some automobile liability insurance.
Q: Suppose I lend my car to a
friend, is he/she covered under my automobile insurance policy?
A: Whenever you knowingly loan your car to a friend or an
associate, he or she will be covered under your automobile insurance policy.
Q: What is the difference
between collision physical damage coverage and comprehensive physical damage
coverage?
A: Collision is defined as losses you incur when your
automobile collides with another car or object while comprehensive provides
coverage for most other direct physical damage losses you could incur,
including theft, hail and vandalism.
Q: What factors can affect
the cost of my automobile insurance?
A: A number of factors can affect the cost of your automobile
insurance -- some of which you can control and some that are beyond your
control.
The type of car you drive, the purpose the car serves,
your driving record, and where the car is garaged can all affect how much your
automobile insurance will cost you.
Q: What are the advantages to
using an agent to purchase insurance?
A: By using an agent to purchase insurance, the
policyholder receives more personal service. An agent with whom there is direct
contact can be vital when purchasing a product and absolutely necessary when
filing a claim. A local, independent agent is able to deliver quality insurance
with competitive pricing and local personalized service. SR22 Insurance FAQ’s Q: When is SR22 Insurance
required? A: An SR22 is required when an individual has had their
license suspended for a violation. Q: What is the purpose of
SR22 Insurance? A: The SR22 is allowing the individual to reinstate his
license with the condition the individual must obtain insurance for a certain
time limit that is determined by the State of Texas. Q: Why should a person have
SR-22 insurance? A: An SR22 insurance policy is a certificate of insurance
that is required by the Texas Department of Public Safety (DPS) as proof of
liability as required by law. Q: Is an SR22 only for people
who have had their Drivers License Suspended? A: SR22 insurance is not necessarily "high
risk" insurance. It is motor vehicle liability insurance which requires the
insurance company to certify coverage to DPS. Q: If I do not own a car, how
can an SR22 be obtained? A: You do not need to own a car to buy SR22 insurance. If
you do not own a car, please contact B&A Insurance and talk to us about a
non-owner SR22. Q: Can insurance card or
insurance policy be accepted toward the requirement of filing the SR22? A: No, when proof of financial responsibility is
required, form SR22 must be filed to meet the compliance requirements. Q: How long is proof of
financial responsibility (SR22) required in accident, conviction or judgment
cases? A: The SR22 is required for 2 years from the date of
accident, date of conviction or date the judgment was rendered. Q: What happens if my SR22 is
canceled? A: If the Texas Department of Public Safety (DPS)
receives notification from the insurance company that the policy is canceled,
terminated, or lapses appropriate enforcement action may be taken. Q: What is the penalty for
not having an SR22? A: If the SR22 is required and there is not a valid SR-22
on file, the driving privilege and vehicle registration is suspended. Life Insurance FAQ's Q: What is Term life
insurance? A: Term life insurance is life insurance coverage at a
guaranteed rate for a specified period of time. (Example: 10 year level term
would guarantee a level premium for 10 years based on a specified death
benefit) Term life insurance is usually the least expensive form of life
coverage. Q: What is Universal Life
Insurance? A: Universal life insurance is a flexible premium policy
under which the policy owner may adjust the death benefit from time to time and
vary the amount or timing of premium payments given specified limitations.
Premiums are credited to a policy account from which mortality charges are
deducted and to which interest is credited based on short term interest rates.
This crediting usually allows some cash value build up in the policy. Q: What is Whole Life
Insurance? A: Whole life insurance is a permanent type of life
insurance coverage that can provide lifetime protection at a level premium.
Premiums must generally be paid as long as the policy is in force. Q: What is Variable Life
Insurance? A: Life insurance under which the benefits relate to the
value of assets behind the contract at the time the benefit is paid. The assets
fluctuate according to the investment experience of funds managed by the life
insurance company. Premium payments may be fixed as to timing and amount
(scheduled premium variable life) or subject to change by the policy holder
(flexible premium variable life). Mortgage Protection Insurance FAQ’s Q: What if we already have Mortgage Insurance? Many people confuse Mortgage Protection with Private Mortgage Insurance (PMI). PMI is a Gap insurance policy required by mortgage lenders and secured at the time of closing. The policy normally covers 20% of the mortgage or the basic mortgage interest. This means, if you are unable to make your mortgage payment, the lender is covered but you are not. Mortgage Insurance policies benefit individuals. Q: Why do I need Mortgage Insurance Protection? A: Mortgage Protection Life Insurance is designed to repay the outstanding balance of a repayment mortgage in the event of death (or earlier critical illness). Q: Who is the beneficiary of my Mortgage Insurance policy? A: Mortgage Insurance proceeds are paid to the beneficiary you designate. This allows your family to pay the mortgage and other bills as needed. Q: Couldn't my estate just sell my assets if I die? A: Yes, your estate could liquidate your assets, but how much are they worth? The typical mortgage is between $75,000 and $200,000. If your family sold everything you own would they make that much? For most of us, our estates are not that valuable and few people have those dollars in the bank. Q: What is this Mortgage Payment Protection Insurance designed to do? A: Mortgage Payment Protection Insurance is designed to protect your mortgage payments against the risks of involuntary unemployment and/or accident and sickness Q: What is this Mortgage Protection Life Insurance designed to do? A: Mortgage Protection Life Insurance is designed to repay the outstanding balance of a repayment mortgage in the event of death (or earlier critical illness). Health
Insurance FAQ’s Q: What Are My Health Plan Choices? A: There
are two basic types of health care Insurance Plans, Indemnity (fee-for-service)
and Managed Care plans. Q: What is the difference between Indemnity and Managed
Care Insurance? A:
Indemnity and managed care plans differ in their basic approach. Put broadly,
the major differences concern choice of providers, out-of-pocket costs for
covered services, and how bills are paid. Q: What is an Indemnity Health Care plan? A:
Indemnity plans offer more choice of doctors (including specialists, such as
cardiologists and surgeons), hospitals, and other health care providers than
managed care plans. Indemnity plans pay their share of the costs of a service
only after they receive a bill. Q: What is Managed Care Health Insurance? A:
Managed Care Health Insurance plans have agreements with certain doctors,
hospitals, and health care providers to give a range of services to plan
members at reduced cost. In general, you will have less paperwork and lower
out-of-pocket costs if you select a managed care type plan. Q: What Types of Managed Care Health plans are there? A:
There are basically three types of Managed Care Health plans: PPOs, HMOs, and
POS plans. Q: What is a PPO Managed Care Health plan? A: Preferred
Provider Organization (PPO). A PPO is a form of managed care closest to an
indemnity plan. A PPO network has arrangements with doctors, hospitals, and
other providers of care who have agreed to accept lower fees from the insurer
for their services. As a result, your cost sharing should be lower than if you
go outside the network. In addition to the PPO doctors making referrals, plan
members can refer themselves to other doctors, including ones outside the plan.
Q: What is an HMO Managed Care Health plan? A:
Health Maintenance Organization (HMO). HMOs are the oldest form of managed care
plan. HMOs offer members a range of health benefits, including preventive care,
for a set monthly fee. HMOs will give you a list of doctors from which to
choose a primary care doctor. This doctor coordinates your care, which means
that generally you must contact him or her to be referred to a specialist. Q: What is an POS Managed Care Health plan? A:
Point-of-Service (POS) Plan. Many HMOs offer an indemnity-type option known as
a POS plan. The primary care doctors in a POS plan usually make referrals to
other providers in the plan. But in a POS plan, members can refer themselves
outside the plan and still get some coverage. Q: What are Primary Care Doctors? A: A
primary care doctor will serve as your regular doctor, managing your care and
working with you to make most of the medical decisions about your care as a
patient. In many plans, care by specialists is only paid for if your are
referred by your primary care doctor. An HMO or a POS plan will provide you
with a list of doctors from which you will choose your primary care doctor. PPOs
allow members to use primary care doctors outside the PPO network (at a higher
cost). Indemnity plans allow any doctor to be used. Q: Why would a person buy Health Insurance from an
Independent Insurance agent? A: If
you are self-employed or if your company does not offer group policies, you may
need to buy individual health insurance. Individual policies cost more than group
policies. B&A Insurance tell you more about the indemnity and managed care
plans that are available for individuals. Some States also provide insurance
for very small groups or the self-employed. Q: What is Medicare? A:
Americans age 65 or older and people with certain disabilities can be covered
under Medicare, a Federal health insurance program. In many parts of the
country, people covered under Medicare now have a choice between managed care
and indemnity plans. Q: What is Medicaid? A:
Medicaid covers some low-income people (especially children and pregnant
women), and disabled people. Medicaid is a joint Federal-State health insurance
program that is run by the States. Q: What are Pre-Existing Conditions? A: A
pre-existing condition is a medical condition diagnosed or treated before
joining a new plan. If you have a pre-existing condition and have not been
insured the previous 12 months before joining a new plan, You will have to wait
12 months before you are covered for that condition. Homeowner
Insurance FAQ’s Q: What
are some things I can do to lower the cost of my homeowners insurance? A: The
easiest thing to do is get a comprehensive review of your policy and needs from
B&A Insurance. Let us look for any discounts that you may qualify for.
Raise your deductible. Increasing your deductible from $250 to $500 will lower
your premium, sometimes by as much as five or ten percent. Q: What
does homeowners insurance cover? A: The
typical homeowner policy has two main sections: Section I covers the property
of the insured and Section II provides personal liability coverage for the
insured. Usually, homeowners insurance is required by the lender to obtain a
mortgage. Q: What is
the difference between "actual cash value" and "replacement
cost"? A:
Covered losses under a homeowner policy can be paid on either an actual cash
value basis or on a replacement cost basis. When "actual cash value" is
used, the policy owner is entitled to the depreciated value of the damaged
property. Under the "replacement cost" coverage, the policy owner is
reimbursed an amount necessary to replace the article with one of similar type
and quality at current prices. Q: What
factors should I consider when purchasing homeowners insurance? A:
Determine the amount and type of insurance that you need. The coverage limit of
your house should equal 100% of its replacement cost. Determine which, if any,
additional endorsements you want to add to your policy. Consult with B&A
Insurance. We will be able to help you determine if there are any gaps in
coverage you might not have been aware of, explain the details of the policy's
exclusions and limitations as well as recommend an insurance company that will
live up to your expectations. Q: What
are the policy limits (i.e., coverage limits) in the standard homeowners
policy? >A: The
dwelling and other structures on the premises are protected on an "all
risks" basis up to the policy limits. "All risks" means that
unless the policy specifically excludes the manner in which your home is
damaged or destroyed, there is coverage. Losses to your personal property are
covered on a "named perils" basis. "Named perils" means
that you have coverage only when your property is damaged or destroyed in the
manner specifically described in the policy. The policy limit on the coverage
is equal to 50% of the policy limit on the dwelling. The coverage limit on
personal liability is determined by the policy owner at the time the policy is
issued. The coverage limit on medical payments to others is usually set at
$1000 per injured person. Q: Where
and when is my personal property covered? A:
Personal property (except property that is specifically excluded) is covered
anywhere in the world. Q: Do I
need flood coverage? How can I get it? A:
Although flood insurance is relatively inexpensive, most Americans neglect to
purchase protection. Houston, Texas is a High risk area for flooding. A flood insurance policy is easy to get, affordable and
offers invaluable peace of mind. With flood insurance, you know you're covered
… and when the water rises… that peace of mind is helpful. Small Business General
Insurance FAQ's Q: What is fire legal
coverage? A: Fire legal coverage provides coverage to for you if
you rent a business space and are held responsible for fire damages to that
rented space. It does not apply to all business risks. Q: What is the difference
between Replacement Cost (RC) and Actual Cash Value (ACV)? A: Replacement Cost is the current cost to replace
property. Actual Cash Value is the replacement cost less depreciation. Q: What does 80% co-insurance
mean? A: Insurance carriers require that an insured party pay
80% of the replacement cost in order to collect a partial loss in full. This is
the way the insurance company encourages all insured to adequately insure their
property in relation to other insured. Q: Does my policy cover
physical damage to a vehicle I rent? A: This damage will be covered only if that type of
coverage is purchased. Q: Can other people drive my
business vehicle? A: Other people may drive your vehicle with your
permission. It is important that they be listed on your policy if they are
regular drivers of the vehicle. Q: How does an audit work? A: At the end of the policy term, the insurance company
will review the policy and either charge or credit the policyholder based upon
an audit of estimated figures. Examples of estimated auditable items include
sales and payroll. Audits can be performed onsite by an auditor or via mail or
telephone. A premium is charged for audit estimations. Q: Why do I need certificates
of insurance from sub-contractors? A: An audit may require you to show proof that
sub-contractors had their own insurance coverage. The sub-contractors'
certificates of insurance will prevent you from being charged for their
exposure. Q: What is General Liability?
A: General Liability provides coverage for other
individuals who are on your property and/or exposed to your operations. Q: What does
Products/Completed Operations mean? A: Products/Completed Operations refers to the liability
coverage for damages caused by your operation or products after the point at
which you no longer have control of them. Q: What is Business
Interruption/Extra Expense coverage? A: Business Interruption/Extra Expense coverage provides
coverage for income loss and the expense of establishing a temporary site
during repairs due to damages related to a fire or compensable loss. Q: What is the difference
between "Named Insured", "First Named Insured" and
"Additional Insured?" A: Named Insured are those listed by name in the relevant
block of the policy's declaration page. Although the named insured is commonly
one person, partnership, corporation or other entity with insurable interests,
multiple named insureds may be included. The First Named Insured is the first "named
insured" listed on the policy declarations (front page of the policy).
This insured acts as the legal agent for all named insured in initiating
cancellation, requesting policy changes or accepting any return premiums. The
first named insured may also be responsible for payment of the premiums. An additional insured is an entity to which a policy's
coverage is extended. An additional insured must be added to the policy prior
to a claim being paid. There must be a tied to relationship between the
additional insured and named insured. Being an additional insured on another's
policy does not eliminate the need for someone to have his/her own Commercial
General Liability policy. Small Business Property
Insurance FAQ's Q: What is a peril? A: A peril is the cause of a possible loss (examples
include fires or windstorms). Q: What is Business Income
Coverage (Time Element)? A: Business Income Coverage provides coverage for loss of
earnings and ongoing expenses when operations are curtailed or suspended due to
property damage resulting from a covered cause of loss. Q: Should I purchase special
coverage for my computer equipment? A: Electronic Data Processing (EDP) equipment can be
covered as unscheduled business personal property in "commercial
property" forms such as the building and personal property coverage. An
EDP equipment floater can provide added benefits. Many EDP floaters cover
special perils such as mechanical or electrical breakdown and typically cover
property in transit. Q: What is co-insurance? A: In property insurance, co-insurance is a clause under
which the insured shares in losses to the extent that he/she is underinsured at
the time of a loss. You may have heard of co-insurance relative to health
insurance; this is a provision in which the insured and the insurance company
will share covered losses in an agreed proportion. Small Business General Liability
Insurance FAQ's Q: What is a third party
claim? A: A third party claim is a claim brought against you by
someone other than an insured. Q: Does my General Liability
Policy provide coverage if my company is sued for pollution? A: This insurance does not apply to bodily injury,
property damage, advertising injury or personal injury arising out of the
actual, alleged or threatened discharge, dispersal, seepage, migration, release
or escape of pollution. Q: Does my General Liability
Policy provide Liquor Liability Coverage? A: Yes, your General Liability policy provides liquor
liability coverage unless you are in the business of manufacturing,
distributing, selling, serving or furnishing alcoholic beverages. These types
of businesses need to purchase additional coverage specific to liquor liability
coverage. Q: What is Fire Legal
Liability coverage? A: Fire Legal Liability provides coverage against
liability for fire damage to premises rented to the named insured or
temporarily occupied by the named insured with the owner's permission. Most
Commercial General Liability policies provide a separate limit of $50,000 to
cover this exposure. Q: Will my liability
insurance cover me if I am sued in another country? A: Most liability policies provide coverage for lawsuits
only if they are brought in the United States, its territories
and Canada. Q: What is the difference
between Employee Benefits Liability Coverage and a Fiduciary Bond? A: The Employee Benefits Liability policy was designed
primarily for a variety of benefit plans to provide coverage for administrative
errors and omissions. The Fiduciary Bond policy was designed to cover a
fiduciary's ERISA (Employee Retirement Income Security Act) exposures that are
caused by a "wrongful act." Fiduciary coverage responds to claims for
damages arising out of improper investments as well as plan and employee
advice. Q: What is an Umbrella
Policy? A: An umbrella policy provides additional limits of insurance
over and above underlying coverages found on a General Liability, Automobile or
Workers' Compensation policy. If there is a claim, the underlying policy will
pay its limits of liability and the umbrella policy coverage would then be
activated. Q: When do I need to purchase
Workers' Compensation Insurance? A: Most states require an employer to purchase workers'
compensation insurance as soon as they have employees. These states also
consider a corporate entity to have employees from the moment the corporation
is formed. Workers' compensation insurance will provide medical
expense and disability income for injured employees as required by the laws of
each state. In addition, the insurer will defend any claim proceeding or suit
against the insured for benefits payable under the policy. Premium shall be computed on the basis of the total
remuneration (payroll) paid or payable by the insured for services covered by
the policy. Q: What should be included in
the remuneration? A: In addition to ordinary wages or salaries,
remuneration includes several other types of compensation. These include:
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