Personal Insurance FAQs

What is Replacement Cost and why is it higher than the Market Value of my home?

Replacement Cost is the cost that it would take to build your home back to the way it was prior to a loss (See Replacement Cost definition).  Typically, due to the high cost of materials, the replacement cost on a home is higher than what the market value currently is.  For example, say your home has a replacement cost of $200,000 but you could only sell it for $100,000.  If you insured your home to Market Value, you would be $100,000 short of being able to rebuild it.

Is Flood Damage covered on my homeowners policy?

NO. Flood is an exclusion and a coverage that must be purchased separately.  For more information regarding Flood Insurance, contact our agency or visit

Are there items in my home that are not covered by my homeowners policy?

Yes.  Property that is used for a home-based business would not be covered in the event of a loss.  This would need to be properly rated for or placed on a commercial policy.  Other items such as engagement rings, fine art, or other high valued items only have limited coverage based on each carrier’s policy form.  Items of higher value should be scheduled (See Definitions page) individually in order to insure proper coverage.

What do liability limits on my auto policy mean?

There are a number of different liability limits to choose from.  Single Limit policies provide one total limit for bodily injury and property damage in an accident, regardless of the number of injured people or the extent of property damage.  A split-limit policy specifies individual amounts in an accident for an injured person, for all injured people, and for damaged property.

What steps should I take if I am involved in an accident?

While we certainly hope that you are never involved in an auto accident, we realize that they do happen. If you are ever involved in an accident, the following suggestions from IRMI (the Insurance Risk Management Institute) will help the claim process move ahead smoothly.

 Make sure that everyone is unhurt – in your car and any others involved.  If anyone is injured, call 911 immediately. Even if you think your injuries are minor, it is a good idea to have them checked.

  1. Call the police. They can help defuse a difficult situation and also ascertain who is at fault. Make sure that police on the scene get the names, addresses, and phone numbers of all other involved parties. Ask for a copy of the police report from the officer.
  2.  If you have a camera with you (cell phone camera) – take photos of the vehicles involved, the general area where the accident occurred, and skid marks.
  3.  If possible, safely move the cars out of the way of traffic.
  4.  Do not admit or discuss liability with anyone other than staff at our office or your insurer.
  5.  Gather information about everyone involved in the accident: name, address, driver’s license number, license plate number, description of car, e-mail address, phone numbers, and auto insurance information. Also obtain contact information from any witnesses to the accident.
  6.  Report the accident immediately to our office at (800) 860.3075.
  7.  While the details are still fresh in your mind, write your own account of the accident. Be sure to make note of anything the other involved parties said about their injuries or as to how they may have contributed to or avoided the accident.

Do insurance companies run my credit score?

Yes, in fact, a big factor in determining insurance premiums is a person’s credit record.  When a person applies for insurance, the insurer asks for permission to pull his or her credit information.  The insurer then secures a credit report from one or more of the credit bureaus- TransUnion; Experian; or Equifax.  For more information on credit reports or to get a copy of your report, go to

In order to improve your credit score, keep in mind the following factors that influence the score:

  • Payment History: The largest factor is credit and loan account payment history. A steady record of on-time payments going back several years shows responsibility.
  • Debts Owed: The number of accounts you currently have, including type and balance. Try to have just a few active accounts with low balances.
  • Length of Credit History: The longer your credit history, the better.
  • New Accounts: Every time you apply for a new account, a record of that application appears on your credit report and drops your score. Limit the number of applications you submit.
  • Balance of Accounts: It is best to have between two and six open credit cards and one or two loans.
  • Negative Records: collections, judgments, and bankruptcy filings will drop your score.

What is the difference between Collision coverage and Comprehensive (or Other Than Collision) coverage?

Collision coverage covers any damage to your vehicle as a result of colliding with another vehicle or stationary object.  Comprehensive coverage covers damage to your vehicle as a result of theft, fire, vandalism, hitting a deer, a skipping rock damaging your windshield, etc.

Can I cancel a policy Mid-Term?

Yes.  Most carriers will then Pro-Rate any paid for, but unused premium and refund you the difference.

What factors go into my rate?

There are over 325 rating factors that determine an individual’s premium.  Vehicle symbol, driving history, insurance score, territory, and age are just a few.

Is my premium affected if I increase or decrease my deductible?

Yes.  The higher your deductible, the lower your premiums and vise versa.  However, this does not mean that you should increase your deductible to $5,000 if you would only be able to come up with $500 in the even of a loss.  Deductibles should be an individual preference and determined based on your ability to cover that amount should a loss occur.

Commercial Insurance FAQs

What is EPLI coverage and why is it important to my business?

EPLI stands for Employment Practices Liability Insurance.  It is a coverage that protects employers from employees who feel their rights have been violated.  sexual harassment, discrimination, Failure to employ or promote are just a few of the most common.  Here are a few statistics to help show why EPLI is so important:

  • You are more likely to have an EPLI claim than a General Liability or a Property claim.
  • 75% of all EPLI claims are against small businesses (1 – 50 employees)
  • The average cost to defend a EPLI claim is $150,000.
  • The average settlement for an EPLI claim is $200,000.

What is Hired and Non-Owned Auto Coverage?

This is coverage for the policyholder against liability incurred while driving an automobile not owned or hired by the policyholder or resulting from the use of someone else’s automobile on the insured’s behalf, such as an employee using a personal car for the employer’s business purposes. This coverage is automatically included in personal and most commercial automobile policies.

What is Coinsurance and how does it apply to my policy?

Coinsurance is a clause requiring the insured to maintain insurance at least equal to a stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that proportion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried.  In other words, if a policy requires 80% coinsurance, the insured would have to carry at least 80% of the property’s full replacement cost.

What happens if an employee sues me as a result of their pension plan values falling after a turn in the stock market?

The answer depends on whether you have purchased Fiduciary Liability Coverage.  This coverage is designed to protect the employer for their Acts, Errors, & Omission as related to their management of a qualified pension or 401k plan for their employees.  Depending on how the plan is managed you may need this coverage for your protection.

What if an employee is left off of our Group Health plan by mistake, and then they have an accident. Will I be covered if that employee sues me?

This question is related to Employee Benefits Liability Coverage. Just like Fiduciary Liability coverage, this coverage is designed to protect you against your acts, errors, & omissions as they relate to a group benefit plan (Health, Life, disability, etc.).  If you offer group benefits to your employees, you need this coverage.

My policy shows that my buildings are insured for “Actual Cash Value” (or ACV). What does that mean?

This is a very important thing to review with your Agent.  Actual cash value in the insurance industry means Replacement cost, minus depreciation.  Do not confuse this term with market value, the two terms are unrelated.  It is a formula that insurance adjusters will use to determine how much money they will pay you after a loss.  In a partial-loss situation, ACV coverage could leave your business with a hefty bill to pay on your own.   One of the few advantage of insuring your buildings in this way is that it will reduce your premium cost.

What does “Functional Replacement Cost” mean?

Functional Replacement Cost (FRC) is an alternative to insuring your buildings to their full Replacement Cost, without some of the pitfalls of selecting Actual Cash Value (ACV).   When this option is selected, the insurance company will only pay the amount necessary to repair your building to the point that it can function the same way it did before.  The company isn’t required to use materials of like kind or quality, or to match existing aesthetics of the building.  Some of the downsides of this option are that you have given the company total control over the mitigation process, and your building could end up looking funny after a repair job.  In addition, many companies have moved away from offering this option, and some of them will offer it but without much pricing incentive to use it.  The benefit of this option is that it is less expensive than insuring to full replacement cost, and you may not care about what kind of materials are used after a loss.  You also don’t have the potential pitfalls of selecting ACV as your settlement option.