Frequently Asked Questions
- Why is insurance important?
- What does insurance cost and why?
- Auto Insurance
- Home Owner's
- Renter's Insurance
- Business
- Student/Recent Graduate Insurance
Why is insurance important?
- In the event a court decision is made against you, insurance can protect your assets against attachment from the award
- Helps reduce the cost of defense if you are sued
- Insures the collateral on high-value items (e.g., house and car) on behalf of the lending financial institution
- Provides health care coverage for you and immediate family members through regular monthly payments.
- Provides you with methods to save for retirement and reduces the tax burden on those savings
- Protects the financial security of your family and you in the event of your death, serious illness, or unemployment
What does insurance cost and why?
Many things influence the cost of the insurance coverage you purchase.
- Costs such as medical care, automobile repair, construction, legal fees and defense, judgments and jury awards, claims adjustment, and fraud
- Overhead (e.g., rental costs, utilities, employee salaries and benefits, supplies and equipment, furniture)
- Investment income.
Auto Insurance
Will I pay a different premium based on where I live?
Your likelihood of having an accident or having your
car stolen or vandalized is linked to where you keep your car. The chances of encountering these problems
goes up in densely-populated areas, such as cities, and goes down in relatively low-populated or
rural areas.
Other factors include:
- Estimated response times of the local police and law enforcement
- Road conditions in your area
- Local medical services
- Litigation rates (e.g., how many lawsuits are filed, go to trial, are settled out of court, the award amounts)
Do all states require some kind of Liability insurance?
No. Not every state requires auto insurance; some have laws requiring drivers be able to pay for any damage or injury they cause in the event of an accident. However, purchasing liability insurance is a good way for you to meet the financial responsibility laws in your area.
How do I avoid cancellation of my insurance policy?
Maintaining an a driving record free of accidents, tickets and moving violations is the most effective way to prevent an insurance company from canceling your policy. Consider taking a defensive driving course to reduce your likelihood of causing an accident and improve your safety.
Will my policy cover another person if I loan them my car?
Yes. Liability, Comprehensive and Collision coverage is connected to your car; if the driver of your car is injured, that driver’s policy can also cover the cost of damages and injuries.
The same is true if you borrow someone else’s vehicle. Your own insurance follows you regardless of the automobile you drive, but if you are involved in an accident while driving that car, the owner’s insurance provides the key coverage for damages and injuries.
Am I covered for natural disasters or "Acts of God"?
Coverage for natural disasters or "Acts of God" (e.g., earthquake, flood, hail) is generally provided by the same comprehensive insurance that protects you against file and theft. Except in situations in which your car is overturned during natural peril, which is covered by your liability insurance.
If you have specific questions or concerns regarding insuring your vehicle against natural disasters, please contact our offices for more information regarding catastrophic coverage.
What happens if my insurer refuses to cover a claim?
Usually, when insurers refuse to cover a claim, they have a strong legal reason for doing so (though you may disagree with that reason). If you feel that you are being treated unfairly, please contact your Balcos Insurance representative. Your agent is a strong advocate in insurance matters. However, if you are facing a legal problem, you may need to seek legal counsel.
Home Owners
Mortgage Insurance; who decides—the mortgage company or me?
You decide on the type of insurance to cover your home. The mortgage company will require that their investment be protected by insurance. In most cases, they will collect a certain amount from you each month, which is then placed in escrow and withdrawn only to pay for insurance and taxes. However, the policy is yours and you may select the policy you feel provides the best coverage and protection for the value.
What is covered in a Home Owner's insurance policy?
With approximately 900 insurance companies writing Property / Casualty policies in the United States, defining the exact coverage provided in a homeowner policy is difficult, if not impossible. However, about 80% of homeowner policies are derived from a standard form and all homeowner policies cover two key areas: property and liability.
Property insurance protects your structures and possessions. Personal liability covers any moneys you're legally obligated to pay to another person for actions caused by you, your family, or your property – this may also include medical payments for injuries caused by you or your family.
Are natural disasters (like floods and earthquakes) covered?
Most natural disasters are covered, however flood and earthquake damage are not covered by standard policies. Both of these perils are more common than most people realize; our representatives can advise you on commonly-excluded conditions like earthquakes and floods.
What exclusions I should know about?
Common exclusions defined in your policy can include damage due to neglect, intentional loss, "earth movement," power failure, and damage done by war. For instance, if you fail to take care of your property (e.g., you do not repair your leaking roof), you may not be covered for any resulting damage.
Another common exclusion which can be expensive is the Ordinance or Law exclusion. This pertains to building codes established by governmental bodies which increase the cost of rebuilding/repairing. For example, when replacing damaged property, you may discover that current ordinances require you to use higher grade and more expensive materials than those you are replacing; these new materials may not be fully covered.
Renter's Insurance
What is the cost for Renter's Insurance?
Renter’s Insurance can be purchased for as little as $100 per year.
But I'm protected by my landlord's insurance policy, right?
In most cases, the property owner’s insurance covers the building. Seldom does this policy cover the tenant’s possessions or liability. When in doubt, you should ask your landlord prior to signing your lease.
Business
Do I need business insurance right away?
Yes. Many states and local jurisdictions require a business have insurance before they begin operating. If you rent space, your landlord may require you to obtain adequate insurance.
Your chance of suffering a loss starts on your first day of business; if you have no insurance or insufficient coverage, your agent, most likely, will be unable to help you.
Why do I need business insurance, if I don’t have any major business assets?
Each business has some property; your business itself is property. Like your car and your home, you need to protect your business from loss, liability, and damage. Also, your business is your source of income; in the event of damage, loss, or liability, you need protection from the potential loss of this income.
Are there differences in coverage options for businesses?
Yes, coverage options vary radically depending on your business needs. Often, small business owners choose policies which cover major property and liability exposures and protect against loss of income. One such common package policy (used by many small businesses) is the Business Owners Policy (BOP).
BOPs typically provide a more complete coverage at a greater value than do individual policies for each category of insurance that you need. You may also purchase policies to cover conditions commonly excluded (e.g., flood protection) as endorsements to a standard policy or as a second, separate policy, the Difference in Conditions (DIC) policy.
A Balcos Insurance representative can help you sort out the right coverage for your business protection—and make sure that your coverage keeps pace with your business as it grows.
Student/Recent Graduate Insurance
Are college students, like myself, covered by their parents’ policies?
This depends on the policy and its terms. Most health insurance policies, for example, cover the insured’s children up to age 18 or up to age 22 while the child is a full-time student.
If you’re over 18 and not a full-time student, you will need your own health care insurance.
With auto insurance most of the time a young driver will have their own policy once they obtain their license to drive. However, if the vehicle and drive has been enrolled on the parent’s policy, they will be covered in the event of a loss. However, when you move into your own residence, you need to acquire your own policy.
What are the risks that college students face?
College students face risks including theft of personal property, auto accidents, and risks related to attending/giving parties. Because college students are not always accustomed to the expanding responsibilities of being on heir own, it is important for them to be covered adequately and have conversations with their parents and their insurance agent to make sure they are adequately protected.
What is the extent of these risks?
According to a 1995 FBI study, there were more than 100,000 property crimes on college campuses nationwide. These crimes include theft, motor vehicle theft, and arson. On average, thieves stole $1,251 worth of property per offense in that same year.
