There are many home and auto insurance options out there, and many different situations that need coverage. However, there are a few things everyone should know.
Posted in Personal Insurance on Tuesday, June 22, 2021
There are many companies that offer home and auto insurance and many different avenues to get there. You can go through an independent agent, a direct writer, or process your own quote. You can also find opposing views on what coverage is essential and what isn’t necessary. Everybody’s situation is unique and should be evaluated individually, which is why talking with an agent to determine what you need is strongly recommended. However, there are some things everyone should know about auto and homeowners insurance regardless of their situation.
- State minimum liability limits required are not necessarily enough to protect you. For example, the state of Iowa requires minimum bodily injury limits of $20,000 per person and $40,000 per accident, and a $15,000 property damage limit. If you are in an accident with no bodily injury but a total loss to their vehicle valued at $30,000, your insurance will pay the first $15,000. You will be responsible for the balance.
- All state regulations and requirements are not the same. Thus, if you move to a new state, you do need to get new auto insurance.
- A personal auto policy does NOT cover the rental of a U-Haul or similar type of moving van. A personal auto policy covers private passenger personal automobiles. A U-Haul is a commercial vehicle.
- Insurance follows the car, not the insured. In other words, if you loan your vehicle to a friend and the friend causes an accident, it is your policy that covers the damages.
- The type of vehicle you drive affects the rates. For example, pickup trucks will rate higher due to the damage they can cause to other vehicles in an accident. Sports cars will rate higher because they promote driving at higher speeds and are usually more expensive.
- Flood damage is not covered by homeowners insurance. Coverage can be purchased through the National Flood Insurance Program. Some companies will write this as a standalone policy and some will offer the coverage as an attachment to the home policy, but either way, it is separate coverage from a home policy.
- The amount of coverage on the home is based on the cost to rebuild the home at the time of a loss. This number is rarely the same as your purchase price or market value. If you get a quote for coverage that equals your purchase price, discuss the cost to rebuild with your agent.
- The age of your roof has a direct effect on the premium. Older roofs increase the likelihood that a claim will be filed. Some companies will even base eligibility for a policy on the age of a roof.
- The annual premium should not be the only factor when deciding to purchase home insurance. Insurers do not all use the same policy forms and endorsements. Though the coverage numbers may look the same, you need to compare the endorsements as well.
- Pools, trampolines and some dog breeds not only affect the premium, they can also affect the eligibility for coverage. Have a discussion with your agent before adding these additional risks.
While this isn’t everything you need to know about auto and home insurance, it’s a good start. Your agent is there to answer questions and counsel you on what you need. Just as no two policies are alike, no two insureds are alike either. You deserve an agent that recognizes that and takes care of your individual needs.