Do you or your family members have a student returning home for summer-break? Could this student be driving any vehicles? Am I covered if my son or daughter drives my car? These may be questions you are thinking about as our schools prepare to begin summer break, in this post, we are going to discuss what you need to know about how your auto policy functions during these situations.
For starters, is your child listed as a “driver” on any policy; yours or their own? If they are listed on a policy other than yours, are the liability limits equal to your own? Even while your child is away at school, most policies will still define them as a member of your household if they lived with you immediately preceding going to school, are a full-time student, and are under age 21. If your policy still considers your child to be a member of your household, and they’re not listed as a driver on the policy, this may remove them from the coverage provided for a Permissive User and could potentially lead to a claim being denied and ultimately increasing your personal financial liability exposure.
While it may be tempting to remove younger-drivers from our auto policy as soon as possible, the definition of household-member can be very important to consider. Should an accident occur, and your child’s liability limits be exceeded, it is not farfetched to expect your policy and assets to be the next target. While each company’s policy may have a different definition for a household-member, it is very important to understand how your specific policy identifies who is an insured, and who is considered a house-hold member in regards to liability. Reading your policies definitions could potential save you from a damaging financial loss.
We hope this information has you thinking about your auto policy and the potential gaps or exclusion from protection. As with all insurance, it is important to remember that your policy is a very specific contract outlining the responsibility of each party and what is, or is not, covered. At the Hunt Insurance Agency, we look forward to identifying and explaining these policy-functions in order to deepen your understanding and provide you the opportunity to know in advance if your policy covers whatever issue we may encounter in life.
Please let us know what thoughts, follow-up questions, or comments you may have regarding this information. We look forward to your responses which help us better provide important information to all insurance consumers.
Thank you for reading!
Did you know that most commercial property insurance policies carry a coinsurance requirement? If so, do you know what that requirement is? No, we aren’t talking about your health insurance here, and we aren’t talking about carrying two insurance policies, though that can present a separate set of challenges!
Many commercial property policies come with a coinsurance clause of either 80%, 90% or 100% and if the clause exists on your policy and your not insured properly in the event of a claim, the situation may end far worse than you had expected both in your ability to recover from the loss and the out of pocket costs you may actually experience.
Let’s begin by first defining what coinsurance is:
Coinsurance Definition – A mechanism where the insurer agrees to a reduced rate if the insured carries a specific percent of insurance to the value of the property.
Essentially this means that a formula is applied on losses that occur if an insufficient amount of coverage is carried on the commercial property. For example, lets say that you have a commercial property that has a replacement cost of $1,000,000 and your policy carries a coinsurance clause of 80%. This clause requires you to carry at least $800,000 of coverage for your commercial property or it will be subject to coinsurance clause and thereby will result in a reduction in the amount paid at the time of a loss. Now, you’re probably wondering just how much of a reduction and what would it look like if I didn’t carry enough insurance.
The coinsurance formula is quite simple but for those who aren’t versed in the insurance lingo or aren’t comfortable with math it can be very confusing. For example, let’s look at a property that is insured for $600,000 and you had a $500 deductible but at the time of a loss it is determined that the property was valued at $1,000,000 and should have been insured for at least $800,000 to satisfy the 80% coinsurance clause. The formula to determine the amount that the insurance company will actually pay is below:
As you can see by the example above, if you insured your property for $600,000 and the insurance company determines that it should have been insured for $800,000, even though you have a loss that is less than what you insured, the resulting payment will also be less. In this scenario, you thought you had $600,000 in insurance coverage but when you experienced the loss of $400,000 the insurance company isn’t going to provide you with a check for the full $400,000 minus your $500 deductible… instead you will end up with a check for only $299,500.. That means that you will somehow have to find a way to cover the $100,500 not covered by your insurance out of your own pocket or get a loan. Now, you may have thought you would just have to cover the $500 deductible or whatever deductible your insurance policy carriers but now you’re forced with a much higher out of pocket cost!
Having an agent that understands how insurance works and can explain why you need certain levels of coverage and various endorsements is why you should choose your agent carefully. You want an agent that has taken the time and invested in the knowledge it takes to write your commercial insurance policy properly. I know insurance companies make it look like you can just buy an insurance policy off the shelf, but it really doesn’t work that way, and if you buy a policy that is not written specifically for you and your business.. chances are you won’t be covered as well as you should be.
Thank you for reading our blog, our next topic will be about endorsements and exclusions!
As of June 1st we are celebrating the 3 year anniversary of Cindy in our customer service department / quality assurance! Cindy leads the charge in providing quality customer service and is a true asset to our agency. Please join us in thanking her for all the dedicated hours she has put into ensuring our customers receive the highest level of service available! Thank you Cindy!
You carry auto insurance to cover your liability when driving an automobile but what happens if you are involved in an accident where the person who hits you doesn’t have the same courtesy or doesn’t carry enough coverage to cover the cost of the accident?
If you have Uninsured Motorist coverage on your policy it covers you, insured members of your household and your passengers in an accident with a motorist who has no insurance or is underinsured. It also provides coverage if you’re hit by a hit-and-run driver and applies to you and the insured members of your household, even as pedestrians.
Uninsured / Underinsured Motorist Coverage includes payment of medical costs, lost wages and pain and suffering. It is required in many states but is not a required coverage in Washington State. This coverage typically covers any difference between what the other at fault driver’s insurance covers and the costs of your bodily injuries, up to the limits of the policy.
When: October 2, 2012 6:30 PM – 8:00 PM
Where: Carson Elementary School in Puyallup
Hunt Family Insurance Agency will be providing m.i.l.k. Digital ID’s for free ($49.99 value) to all attendee’s. The Free Digital ID Kit contains the Home Organizer Software and two pictures of your child (Front & Side) in front of our height chart.
Law enforcement states that in a missing child situation, rapidly distributing a current photo can be the difference between a fast recovery and a prolonged search . . . Unfortunately, most parents are not prepared for this type of crisis.
~ Over 2,000 children are reported missing every day ~
~ 40% of the parents of a missing child cannot immediately supply a current picture ~
~ 34% the of parents do not know their child’s correct weight, eye color or height ~
These statistics may sound outlandish, however, if you were placed in an emergency situation, could you instantly provide a current photo of your child along with vital statistics including height, weight, eye color, gender, date of birth, nick name, distinguishing marks and identifiers such as eye-glasses or contact lenses, braces on teeth, pierced ears and other unique physical attributes along with your contact information? The m.i.l.k. Digital ID contains all this important information.
Protect your most valuable assett – Your Children!
In addition to establishing an immediate means for locating and distributing this vital data, every 6 months the software reminds you to update the photo and identification information in your m.i.l.k. Digital IDs. This ensures that in the event of an emergency, the most current information is readily available.
What is Auto Insurance?
Auto insurance helps you to protect you and your family against financial loss in the event of an accident or other cause of loss. It covers the injuries and damages caused by an accident and for which you are legally responsible. It may also cover the costs of repairing or replacing your vehicle if it is damaged or stolen.
What if I don’t have car insurance?
In most states, you’re required to carry a minimum amount of liability insurance (or post a bond) and also provide proof of insurance before you can license your vehicle or renew your driver’s license. If you are caught driving without car insurance, you may have to pay a large fine, have your driver’s license suspended, and/or have your car impounded. In the state of Washington the minimum coverage is $25,000 per person for bodily injury $50,000 per occurence and $10,000 in property damage. For more information the bodily injury and property damage coverage please review our blog post on this subject or you can click here.
How much Auto insurance coverage should I purchase?
That is an excellent question! The required minimum coverage may not be enough to pay for all the damages that result from an accident, and the legally responsible driver will have to pay the additional expenses out of pocket which if you have ever been in an accident or visited the hospital you know that these costs can add up quickly. To acurately determine how much you should purchase really requires a conversation with an agent to assess your risks, the assets you want to protect and how much risk you are comfortable with for potential out of pocket expenses.
How can I keep my auto premiums down?
Generally, the longer you drive without major citations or accidents, the lower your premium will be. You may also qualify for discounts based on safety features on your vehicle. Also, if you insure additional cars or your home with our agency you can save on all your premiums. For further information, feel free to contact us for more information at 888-568-HUNT (4868)