Frequently Asked Questions

Most policies are “permissive” use policies so you would be covered. If you purchased a “named-driver” or “named-operator” policy, only drivers listed on the policy are covered.

Insurance requirements relating to minimum coverage differ from state to state. Liability is the only insurance required by law in California. The limits required in California are often referred to as “15/30/5″ coverage and include: $15,000 bodily injury per person $30,000 maximum per accident $5,000 property damage per accident

In determining your coverage limit, one of the most important factors to consider is the overall value of your assets. If, for example, you own a business or a home, you may want higher limits of liability coverage to protect those assets. Another consideration is to protect future earnings. While there is no set formula, you always want to secure coverage in proportion to your assets, so in case an accident did occur, you have sufficient coverage to cover the loss. If you are at fault and severely injure another person, you may be held personally liable for the bodily injury and physical damages beyond the scope of your liability coverage. Additionally, if you lease or finance your car, it’s likely that your liability coverage limits may have to be higher, usually $250/500,000. You should check with the leaseholder to determine the appropriate level of your coverage. For our customers who own businesses we recommend a minimum of $1,000,000 in auto liability coverage. Most auto policies do not offer a liability limit this high so a personal umbrella may be needed.

Call your Customer Service Representative before you purchase your new, or used, vehicle to make sure you will be covered when you take possession of the vehicle.

Whenever you knowingly loan your car to a friend, family member, co-worker etc, you may be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, you may be covered as long as they had a reasonable belief that you would have given them permission to drive the car. If you are carrying a named-operator policy, only the individuals named on the policy are covered while they drive your car. Although often less expensive, a named operator policy should be clearly disclosed before you purchase the policy. Also you should be aware that when you purchase liability insurance, that coverage goes with you from car to car. (This is not true in all cases read your policy) In other words if you borrow a friends car and are involved in an accident, and have car to car coverage, your liability policy will cover you when driving your friends car. However your liability policy will not protect your friend, he/she must have their own liability insurance to be protected. Conversely it is important to make sure that the people who drive your car have insurance. Because irregardless of whether or not they have insurance, you can still be sued. Very important to understand is that under California law the registered owner of the vehicle is the one responsible for the damage caused by their vehicle, even if they are not driving it (except in the case of stolen cars). So if your friend is driving your car not only will your friend get sued but so will you.

Remember that your liability coverage travels with you from car to car. So whether you are driving your car, a friend’s car, or a rental car, your liability insurance follows you. However the physical damage coverage does not work the same. In most cases, your personal automobile insurance policy will provide coverage only when you are renting a car on vacation. Many insurance companies no longer extend personal automobile insurance coverage when you are traveling on business. The best way to find out what rental car coverage you have under your automobile policy is to call your insurance agent and verify if you have coverage or not.

There are a number of things you can do to lower the cost of your homeowners insurance. The best thing to do is to shop around. It is not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage. Many insurers use the ISO policy forms, but this is not always the case. Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. Many insurers will offer a discount when you place both your automobile and homeowners insurance with the them. Insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Newer Home discounts. Some insurers offer discounts on homes that were recently built. Renewal Discounts. Some insurers will lower your premium if you renew with them. Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible.

Sewer & Drain backup are usually excluded from your policy. Most policies will add coverage for an additional premium.

Coverage C applies to all your personal property (except property that is specifically excluded) anywhere in the world. For example, suppose that while traveling, you purchased a dresser and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit – even though the dresser has never been in your home before. Coverage for property off premises is typically limited to 10% of Coverage C.

This is sometimes a very difficult question to answer. The first thing to remember is that you are only insuring the physical structures. You are not insuring the land. If you are a first time homeowner and purchase a home for $500,000, you do not necessarily need to buy $500,000 of coverage for the home. Determining the cost to rebuild your home and appurtenant structures is something that should be discussed with an agent who specializes in homeowners insurance. Professional Insurance utilizes two software packages to determine the replacement cost of your home. There are several factors that will determine the homes cost to rebuild. Location, what city is the home located in. Square Footage. Roof type. Design of home, custom vs. tract home. Foundations, the shape and soil conditions. Number of floors. Number of rooms. Number of Chimneys. Number of bathrooms. How many cars the garage will hold. etc. The reason this is so important is due to the fact that homeowners policies can contain co-insurance clauses or can have maximum limitations on how much coverage the home has. Although most policies contain a replacement cost endorsement, that endorsement may require the home to be insured for a 100% of the replacement cost. And the replacement cost endorsement may cap the amount paid in the event of a covered claim to 125% of the replacement cost stated in Coverage A of the policy declaration page. When the Oakland Hills Fire hit, the claims settling process was a nightmare for most insurance companies. Almost all of the homes were under insured. Custom homes that cost $450,000 to rebuild were only insured for $225,000. They were underinsured because the homeowner had not notified their agents of upgrades done to the home. However the largest problem came from agents who insured homes for less than replacement cost value. By lowering the replacement cost value the agents were selling lower premiums. The agents were also advising their clients not to worry since they had “replacement cost” coverage. PIA does not condone this practice and it is not something we allow.

[Note: this answer is based on the Insurance Services Office’s HO-3 policy.] Coverages A and B provide protection to the dwelling and other structures on the premises up to the policy limits. The policy limit for Coverage A is set by the policy owner at the time the insurance is purchased. This is the amount the insurance company will pay to have your home or dwelling rebuilt in the event of a covered cause of loss. The policy limit for Coverage B is usually equal to 10% of the policy limit on Coverage A. Coverage C covers losses to the insured’s personal property. The policy limit on Coverage C is equal to 50% of the policy limit on Coverage A. Coverage D covers the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss. The policy limit for Coverage D is equal to 20% of the policy limit on Coverage A. This covers extra costs to rent a hotel room, set up utilities etc. The coverage limit on Coverage E – Personal Liability – is determined by the policy owner at the time the policy is issued. Liability options are usually $100,000, $300,000, $500,000 and $1,000,000. It is best to discuss with an agent how much liability insurance to buy. The coverage limit on Coverage F – Medical Payments to Others – is usually set at $1000 per injured person.

Not necessarily. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage for up to 18 months. COBRA applies to companies with 20 or more employees. You will have to pay for your own health coverage but you’ll get the same discounted or “group rate” your former employer pays. Also, keep in mind the new the federal Health Care Reform Law enacted in March 2010. Under this law, if you don’t find a new job with employer-paid health care coverage, you’ll have to buy your own insurance or else pay a penalty to the federal government.

This is the person(s) or other party(ies) designated to receive life insurance or annuity proceeds upon the death of the insured. The beneficiary is named when a policy is taken out and can be changed at the request of the policyowner. A contingent beneficiary is the party designated to receive life insurance policy proceeds if the primary beneficiary should die before the person whose life is insured. In order to change the beneficiary of a policy, the current policyowner typically must fill out a form with the necessary information and return it to the Insurer.

Loan Value is the amount of cash value that can be borrowed on a policy. A policyowner may be able to make a loan against the cash value of the policy, based on the type of policy owned. A loan allows access to the cash value of the policy, while still maintaining the insurance coverage. When a loan is made against a policy, the death benefit is reduced by the amount of the loan plus any interest that is owed. Loan interest rates vary and specific provisions are generally explained in the policy itself. Generally, a policyowner can request a loan by calling a Service Center. However, in certain instances, a loan form or written request signed by the policyowner will be required. Please remember a policy loan accrues interest and will reduce the death benefit. A loan form or written request signed by the policyowner must be sent to a Service Center if: The policyowner requests that the loan check be sent to a temporary address. There is a change of address pending when the loan is requested. The policy is company owned. Signatures of two officers and their titles will be required for corporations and the sole proprietor’s signature will be required for sole proprietorships. The proceeds of the loan are being transferred to a bank. The policy has multiple owners. The policy is owned by a trust. The policy is assigned.

Up until March 2010, the general rule was that an employer could change or even eliminate a health plan so long as it followed the rules and guidelines set out by the Employee Retirement Income Security Act (ERISA). However, under the new federal Health Care Reform Law passed in 2010, employers with at least 50 employees will be required to provide and keep health care coverage for its employees by 2014. They’ll have to pay a penalty to the federal government if they don’t do so.

In some circumstances, depending on how long you’ve been off work and how much longer it will be before you can return to work, your employer may be able to terminate you. But you can’t be fired simply because you went on disability.

Loan Value is the amount of cash value that can be borrowed on a policy. A policyowner may be able to make a loan against the cash value of the policy, based on the type of policy owned. A loan allows access to the cash value of the policy, while still maintaining the insurance coverage. When a loan is made against a policy, the death benefit is reduced by the amount of the loan plus any interest that is owed. Loan interest rates vary and specific provisions are generally explained in the policy itself. Generally, a policyowner can request a loan by calling a Service Center. However, in certain instances, a loan form or written request signed by the policyowner will be required. Please remember a policy loan accrues interest and will reduce the death benefit. A loan form or written request signed by the policyowner must be sent to a Service Center if: The policyowner requests that the loan check be sent to a temporary address. There is a change of address pending when the loan is requested. The policy is company owned. Signatures of two officers and their titles will be required for corporations and the sole proprietor’s signature will be required for sole proprietorships. The proceeds of the loan are being transferred to a bank. The policy has multiple owners. The policy is owned by a trust. The policy is assigned.

Under the National Flood Insurance Program (NFIP) a flood is defined as a general and temporary condition of partial or complete inundation of normally dry land by: The overflow of inland or tidal waters. The unusual and rapid accumulation or runoff of surface waters from any source. Mudslides (i.e., mudflows) which are proximately caused by flooding, as defined above and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, including your premises, as when earth is carried by a current of water and deposited along the path of the current. The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in flood as defined above. To qualify as a general and temporary condition, the flood must affect either two or more adjacent properties or two or more acres of land and have a distinct beginning point and ending point. Also, to qualify, the flood waters can only be surface water that covers land that is normally dry.

The Standard Flood Insurance Policy (SFIP) Forms contain complete definitions of the coverages they provide. Direct physical losses caused by “floods” are covered. Also covered are losses resulting from flood-related erosion caused by waves or currents of water activity exceeding anticipated cyclical levels, or caused by a severe storm, flash flood, abnormal tidal surge, or the like, which result in flooding, as defined. Damage caused by mudslides (i.e., mudflows), as specifically defined in the policy forms, is covered.

Coverage Category Emergency Program Regular Program BUILDING COVERAGE Single family dwelling 35,000 250,000 2-4 family dwelling 35,000 250,000 Other residential 100,000 250,000 Non-residential 100,000 500,000 CONTENTS COVERAGE Residential 10,000 100,000 Non-residential 100,000 500,000

The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides. While flood insurance does not cover basement improvements, such as finished walls, floors or ceilings, or personal belongings that may be kept in a basement , such as furniture and other contents, it does cover structural elements, essential equipment and other basic items normally located in a basement. Many of these items are covered under building coverage, and some are covered under contents coverage. The NFIP encourages people to purchase both building and contents coverage for the broadest protection. The following items are covered under building coverage, as long as they are connected to a power source and installed in their functioning location: Sump pumps. Well water tanks and pumps, cisterns and the water in them. Oil tanks and the oil in them, natural gas tanks and the gas in them. Pumps and/or tanks used in conjunction with solar energy. Furnaces, hot water heaters, air conditioners, and heat pumps. Electrical junction and circuit breaker boxes, and required utility connections. Foundation elements. Stairways, staircases, elevators and dumbwaiters. Unpainted drywall and sheet rock walls and ceilings, including fiberglass insulation. Cleanup. The Following items are covered under contents coverage: Clothes washers. Clothes dryers. Food Freezers and the food in them.

Increased Cost of Compliance (ICC) under the NFIP provides for the payment of a claim to help pay for the cost to comply with State or community floodplain management laws or ordinances from a flood event in which a building has been declared substantially damaged or repetitively damaged. When an insured building is damaged by a flood and the State or community declares the building to be substantially damaged or repetitively damaged, ICC will help pay for the cost to elevate, flood proof, demolish or relocate the building up to $15,000. This coverage is in addition to the building coverage for the repair of actual physical damages from flood under the Standard Flood Insurance Policy (SFIP).

There is a 30-day waiting period before a flood insurance policy can become effective. In most instances, the insurance producer who writes your policy can provide you with the date that your policy should go into effect.