Insurance Frequently Asked Questions

What does liability insurance cover?

Liability insurance protects you by covering the monetary “damages” (within your policy coverage) if someone sues you and you are held legally accountable to pay damages for such things as an accident, negligence, or an injury.

What does property insurance cover?

Property insurance, which is also known as homeowner’s insurance, covers loss or damage to you home, the contents in your home, and any liability (accidents, injury, etc.) you may incur.

How does a deductible work?

The deductible is the fixed amount you are personally responsible for paying before the benefits of your policy begin to handle the claim. It is usually the case that the higher the premium, the lower the deductible, and vice versa. Ask your independent insurance agent what is the best option for you.

Why should I use an independent insurance agent instead of online insurance?

An independent insurance agent usually represents several different insurance companies. This is great for you because your agent can check with all of these companies at once to get you the best price. An independent insurance agent can also provide you with personalized attention including in person visits, reviewing important documentation (leases, business documents etc.), explaining state and local laws, and offer suggestions on how to avoid claims. You also have the peace of mind of knowing exactly who to call if help is ever needed.

What does “Bonded, Licensed, and Insured” mean?

Bonded
Being bonded means that a bonding company has secured money that is available to the consumer in the event they file a claim against the company. The secured money is in the control of the state, a bond, and not under the control of a company. Let's say that you hire a cleaning company and they end up stealing your Nintendo Wii. Well, you would file a claim against the company and, after an investigation, would be paid out by this bond.
This is slightly different but similar to what it means for an employee to be bonded. Being bonded in that case means that a bonding company has investigated your background and finds that you're trustworthy and "good" enough to insure. In general, this is generally done when an employee has to handle large amounts of money or handle valuable property like jewelry or art. There is a very extensive and deep background check involved and what the employer gets is insurance that you won't steal. If you do, then the bonding company pays out the amount of the theft. By being bonded, it shows that the employee is trustworthy enough for a bonding company to insure you up to a certain amount. Now, a company that is bonded means that a bonding company has funds.

Licensed
For certain professions, a license is necessary to show that you're competent and permitted to conduct business in the city, municipality, or state in which the license was insured. For example, home improvement contractors will have to be licensed to perform certain types of work and that license number will be printed on every advertisement they print. You can take that license number and look up their performance history in most states through the Better Business Bureau.

Insured
This is probably the most commonly understood of the three (second to being licensed) and this refers to what happens if someone gets hurt on the job. Let's say a company is fixing your roof and a roofer falls off and hurts him or herself. If the company isn't insured, then the claim gets filed against your homeowner's insurance (bad). If the company is insured, then the claim gets filed against the roofing company's insurance.

In summary, it's important that anyone you work with is licensed, bonded, and insured. There's no reason why you should have to work with someone who isn't all three, unless being licensed doesn't apply. Once you know that they are, research and confirm that they are being truthful. I can say that I'm bonded, but unless I provide the documentation and you can verify it, I'm not actually bonded.

What does my Homeowner’s Insurance cover?

Typically, your homeowner’s insurance policy will cover your home and personal belongings inside of your home. In the event of a major loss like theft or fire, you will be able to replace the contents of your home. There are many factors to think about when determining the right amount of coverage for your belongings. Special software is available so you don’t have to do it on your own, including the free one at The Insurance Information Institute’s website.

What is Umbrella Insurance?

Umbrella insurance is extra liability insurance. It helps protect you from lawsuits and major claims which results in protecting your assets and your future. It is designed to provide additional liability coverage which goes above the limits of your homeowner and auto insurance policies and kicks in when your other policies have reached their maximum. Umbrella insurance also covers you for claims that might be excluded by other policies such as false arrest, libel, and slander.

Do I need Workers Compensation?

If you hire an employee, yes, you need worker’s compensation insurance.
Sometimes called, worker’s comp, this type of insurance provides medical benefits and replacement of loss wages for employees who are injured while working on their job. In exchange for worker’s compensation, the employee gives up his or her right to sue the employer for negligence.

Miscellaneous Insurance Terms

What is Collision Coverage?

If another automobile hits you, or you hit another automobile or object, this will pay to fix any damages to your car.

What is Comprehensive Coverage?

This will pay for damage to your automobile caused by an accident other than a collision. Examples would include damage by a flood, storm, fire, or theft.

What is Medical Coverage?

Medical Coverage will cover you or passengers in your car that do not have medical insurance in the event of an accident.

What is Bodily Injury Liability/Property Damage Coverage? 

This coverage will pay for another person’s injuries or death if you are responsible, as well as legal defense if the other party in the accident sues you.