Insurance Associates of Indiana Blog
Both your homeowners and auto insurance policies have a certain amount of liability insurance built in. If someone gets injured and it’s your fault, your policy will pay up to that limit. But what if the other person’s injuries are actually much more costly? For example, you have a $300,000 limit on your auto policy. You cause an accident that injures several people, and the medical bills total $500,000. Your insurance will pay the first $300,000. Where does the remaining $200,000 come from? Unfortunately, it will come from you. Do you have an extra $200,000 just sitting around?
That’s where umbrella coverage comes in. It’s an extra policy that will kick in and pay the remaining $200,000. It’s not just for the wealthy. Here is who might need umbrella coverage:
- Anyone with savings, retirement accounts, homes, or other valuable assets
- Anyone who owns a trampoline, pool, tree house, dog, ATV or other ‘high-risk’ things
- Anyone responsible for the care of others – such as a nanny, coach, caregiver, etc.
- Anyone who participates in activities that can injure someone – football, martial arts, hunting, etc.
As you can see, there are a lot of reasons you might need an umbrella policy. And it’s not expensive. A policy that provides $1 million in coverage is usually $150 to $300 per year.
If you aren’t sure whether you should have an umbrella policy, talk to your agent. An independent agent can help assess what you need and can find the policy that is right for your situation.
You just refinanced or bought a new house and then you got an intimidating letter from the lender. It says something like this…
…Our records show that your hazard insurance has expired, and we do not have evidence that you have obtained new coverage. Because of this, we will purchase insurance on your behalf. You are responsible for the cost. It’s going to be really expensive and will not cover as much as your prior policy…
This is exactly what happened to me when I refinanced my mortgage. However, my policy was NOT expired – it was intact and paid in full. So, what’s going on here?
What is hazard insurance?
Hazard insurance, a component of a homeowners policy, is required when you take out a new mortgage or refinance an existing one. The lender needs to protect their investment in case the home is damaged.
What is force-placed insurance?
If you do not provide the lender with proof of hazard insurance, they can purchase a policy for you and require you to pay for it. This is called “force-placing” insurance.
Is it legal?
It is legal because the lender has a right to protect their investment.
So, what’s the problem?
Unfortunately, some lenders take advantage of this system to benefit themselves.
- They may not provide sufficient notice before force-placing your insurance.
- They may place the policy with one of their own subsidiaries
- They may charge you more than the actual cost of the policy
- They may take commissions or incentives from an insurance company to place policies
- These policies often don’t include any liability or personal items coverage
How do I prevent this?
Whenever you get a new mortgage or refinance an existing one, make sure to get the lender proof of your coverage as soon as possible. Your agent should be able to do this for you.
If you get a nastygram like the one described above, contact your agent right away and have them provide proof of your coverage.
In my case, I called the lender and provided them with proof of my existing coverage. I also let them know that I consider this an unacceptable and misleading business practice, since my policy was, in fact, active and paid, NOT expired as they claimed in their letter.
You’ve just sent your precious bundle of joy off to college for the first time, along with several thousand dollar’s worth of electronics. The cell phone, laptop, printer, tablet, tv, and various other gadgets could cost you an arm and a leg to replace if anything happens to them. Should you get renter’s insurance for those possessions? It depends….
…If they live ON campus – there may be a certain amount of coverage under your homeowner’s policy that extends to off-site possessions. That amount is generally limited to 10% of the personal property coverage on your policy. For example, if you have $50,000 of coverage for personal property, then your student’s belongings may be covered up to $5,000 – probably not enough to replace all of those electronics.
…If they live OFF campus – they will need renters insurance, as the homeowners policy probably does not extend to off-campus property. Fortunately, renters insurance is inexpensive and provides several layers of protection. Not only are personal possessions covered, there is usually a certain amount of liability coverage as well. That can cover damage to the property or injuries to guests.
In either case, it’s a good idea to have a home inventory of the items your student has in their living quarters. An easy way to accomplish this is to have them take a video with their phone once they are moved in and send it to you so you have a copy.
For more information about your coverage and options, contact us at www.insai.biz or call 317-580-0900.
You've shopped around online and found the insurance policy with the lowest premiums. It's going to save you so much money each month. But is it really?
Low premiums are just one component of the cost of insurance. Another important component is the claims process. When researching insurance, try to find out the following:
1. How does the company rate at paying out claims? Check online sources including the Better Business Bureau to see what their reputation for claims handling is.
2. What happens to your insurance if you have a claim? Depending on the nature of the claim, your rates may not change at all or may go up significantly. The insurance carrier may decide not to renew your policy when it expires if you've had multiple claims.
3. How easy (or difficult) is the claims filing process? Can you talk to a real person if you have questions? Do they keep you updated on what's happening with your claim?
Saving money on premiums can be a good thing. However, some companies make up the difference on the claims end by refusing to pay legitimate claims, or dragging out the process. Make sure you do your homework before jumping at the lowest premium.
An independent agent can do all the legwork for you and can recommend a company that provides a good balance between low premiums and good claims service. The agent can also handle whatever red tape you may encounter during the claims process.
Welcome to our new insurance agency blog!
This is our very first post. We're not quite sure what we're going to write about here, but the plan is to create helpful content for customers and prospective clients about information that is relevant to you.
We hope you'll come to view this as a top resource for keeping your family and your finances safe.
Here are a few of the topics we may be writing about:
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