Auto | Homeowner | Property Insurance | Liability Insurance | Umbrella Coverage

Auto
Q. If my car gets “totaled” in a recent automobile accident, isn’t my insurance company obligated to replace my car? How much will I receive?
A. When your auto is declared a total loss, unless you made special arrangements and paid an additional premium, your insurance company will only pay you the actual cash value of the auto as of the date of the loss, not the cost to replace it. Your auto's value is determined by the following factors: the retail value for an auto of like kind and quality prior to the accident; the price paid for the auto plus the value of prior improvements to the auto at the time of the accident; the decrease in value of the auto resulting from prior unrelated damage which is detected by the appraiser or for which a claim has been paid; and the actual purchase cost of an available auto of like kind and quality.

If your auto has substantial value because of its exceptional condition such as an antique, classic, or restored auto, you should have it appraised and then insure it for the appraised value.

Q. I can hold on to my car after it has been “totaled” and collect its salvage value, correct?
A. No, your insurance company has the option to take title to your auto because it is entitled to any salvage value your auto may have. You can, of course, negotiate with your company to purchase your auto for the agreed salvage value.

Q. An object damaged my windshield and I am not sure from where or when the damage occurred. Am I covered?
A. Yes, if you have comprehensive insurance you are covered for the full amount of the loss, unless you opted for a $100 deductible for glass breakage. The $300, $500, or $1000 deductible, or whatever you may have selected for comprehensive coverage, does not apply to a glass loss.

Q. Can a claim for damages to my auto be denied if the principal place of garaging listed on the application is false?
A. Yes. If you or someone on your behalf gives false, deceptive, misleading or incomplete information in any application and if such information increases the insurance company's risk of loss, then your company may refuse to pay claims under any or all of the Optional Insurance Parts of the policy. Such information includes the description and place of garaging of the vehicles to be insured, the names of the operators required to be listed and the answers given for all listed operators.

In the event that you have moved since you filled out your initial application, promptly notify your insurance company and the Registry of Motor Vehicles of your new address.

Q. Say I have an automobile policy which has all of the compulsory and optional insurance coverage’s. If I rent an automobile, am I adequately covered?
A. Probably not!!!! There may be substantial limitations. Your collision and comprehensive insurance are transferable to a substitute rented or borrowed private passenger auto that is damaged while it is being operated by you and by members of your household.

Many auto rental companies require that you reimburse them for the REPLACEMENT COST (RC) of any damages incurred to their vehicle. Your auto policy only provides for ACTUAL CASH VALUE (ACV) coverage, minus the deductible. ACV is equal to Replacement Cost minus depreciation. Since your Collision/Comprehensive coverages are on an ACV basis, you can be held liable for the Depreciation amount, plus, of course, the deductible.

Also, the insurance company will calculate the value of your covered vehicle in the amount they offer for coverage of a damaged rental vehicle. If you own a five year old compact car, you cannot expect the insurance company to reimburse a rental company for a brand new top of the line SUV or Sedan you may be renting. You will be held responsible for the difference, which could be quite substantial. Also, the rental company will most likely expect you to pay their full rental fee for any period of time their vehicle is undergoing repairs. Unless you have Substitute Transportation coverage, you will be held responsible for these costs. If you have Substitute Transportation, the insurance company will pay up to your daily limit for rental coverage as determined by a company adjuster. This amount may be less than the actual rental cost, and the rental company may decide the car is not driveable for a longer period than the company adjuster, leaving you once again responsible for the shortfall.

There is no coverage under your policy for family friends or significant others. You should be aware that your coverage is available only if you rent or borrow a private passenger auto in the United States or Canada.

You should also be aware that your policy does not provide coverage for borrowed or rented trucks. If you are renting a truck, you should check with the rental company regarding the purchase of collision and comprehensive insurance. If you are borrowing a truck, make sure you determine whether or not the owner has purchased collision or comprehensive coverage. If the owner does not have insurance, you may be personally liable for any damage to that truck which is the result of your negligent operation. Last, if the use is for business rather than pleasure, call your agent first. Business use is usually not automatically covered. In any event, remember that the coverage is for what is basically a substitute vehicle, not an additional one.

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Homeowner
Q. How much Homeowners insurance do I need anyway?
A. Homeowners insurance covers both damage to your property (your home, garage and their contents) and the liability of you and your family arising from their actions. "Enough" needs to take both of these types of losses into account.

Property Insurance
The replacement cost of the home is the amount it will cost you to rebuild the house with material of like kind and quality (excluding the foundation, which is usually not damaged during a loss,) it is not the market or assessed value of your house.

Unless you insure for at least 80% of the replacement cost of your home (the building itself, not including the cost of the land and the foundation,) if you have a loss, you will be "underinsured" and the insurance company will not pay the full loss.

Assuming your house is insured to its proper value the insurance company will pay the policy limit found on the declarations page of your policy. Many companies now offer additional limits on your dwelling coverage (25-50%) and an "inflation guard" endorsement which will increase the value of the property as construction costs increase.

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Liability Insurance
We strongly suggest to our clients liability limits of $500,000 which typically are sufficient, however one of our Account Representatives will confirm your liability needs as part of our underwriting process. Should higher limits become necessary they are available for additional premium.

Don’t guess, because we won’t. Contact one of our professional Account Representatives who can assist you with determining the replacement cost of your home and your liability insurance needs.

Q. What is replacement cost versus actual cash value and does it really matter?
A. Yes, it matters very much. Replacement Cost is the amount to repair or replace the damaged property using materials of the like kind and quality, without deduction for depreciation. Depreciation is the loss of value that develops as an item ages, wears out, or becomes obsolete. Actual Cash Value is the replacement cost of an item, less the amount for depreciation.

Q. I had several items I use in my business were stolen from my house, am I covered?
A. Most homeowners policies will cover business items up to $2,500 in your home or $250 away from you home, subject to your deductible. There are some exceptions to this limitation on business items, but it is so important that you check your policy in each case. You should also be aware that there are other policies available that specifically cover business equipment.

Q. I happen to live near the ocean and my insurance company just told me they were not going to renew my policy. What are my options?
A. Your company has the right to renew or not renew your policy. Recent severe storm losses incurred by many insurance companies have caused them not to renew policies in coastal areas. We would suggest we have a couple options. First, you can check with one of our Account Representatives to see if we have companies writing business in the area other than the one that is not renewing you. Second, we can help you purchase insurance through the FAIR PLAN, technically, the Massachusetts Property Insurance Underwriting Association. It was formed by the Massachusetts legislature in 1968 to make available insurance protection to individuals who were having problems getting insurance for their home. Don’t forget to ask us about the Federal Flood Insurance Plan, especially if you are in a coastal area. It is a good companion to a homeowners policy.

Q. My house suffered a water loss due to ice dams on the roof. Damage was caused to both the roof and interior of my house. What is covered under my Homeowners policy?
A. Generally, damage to both the exterior and interior of a home resulting from weight of ice and snow or ice dams is covered under that homeowners policy, subject to your deductible. However, when a claim is evaluated, the insurance company adjuster will look at the damage to the roof and will pay only for the area damaged in the loss. If further damage to the roof has occurred due to wear and tear, that part of the claim will not be covered.

Q. My house was recently broken into and some of my contents were stolen. Unfortunately, I do not have any sales receipts for the items stolen. Will my insurance company work with me?
A. Yes, if the actual receipts are not available, insurance companies generally will accept photos, warranties, owners manuals, canceled checks, credit receipts, bills, servicing agreements, even video tapes, as proof of ownership. We suggest that you consider video taping your home before a loss.

Q. My neighbors tree fell on to my fence and destroyed a section of it. Who pays to fix the fence, my insurance company or my neighbors?
A. Generally, your own policy should cover such a loss. Your insurance company may be able to recover the amount it pays you for the loss and your deductible from the homeowners insurance that your neighbor may have, in the event that the loss occurred as a result of your neighbor's negligence.

Q. Recent rainstorms have flooded my basement and caused damage to some of its contents. My Homeowners policy will cover it, correct?
A. Maybe!!!!! Flood coverage is generally excluded on the basic homeowners policy. However, some homeowners policies provide coverage for backup of sewers and drains that cause flooding in your basement. This coverage can be purchased for an additional premium. Check with your Account Representative see if this coverage is provided and how much it costs.

However, if you live in a flood-prone area, you should consider purchasing a flood insurance policy. Flood policies have certain provisions that may limit recovery at the time of a claim. For example, unless two or more acres are flooded, or your neighbor's home as well as yours is damaged, the National Flood Insurance Plan will not cover your loss. It also is limited as to what it will cover in basements. Generally, it is the washer and dryer. Once again your Account Representative will be able to determine whether you are in a flood plain by contacting your Town Hall.

Q. I recently lost power in my home due to a severe storm. The food in my freezer went bad because of the lost power. Does my Homeowners policy cover the loss?
A. The basic homeowners policy usually does not. But, this is a popular coverage for insurance companies to offer and you may be able to buy it for an additional premium. There is also the issue of where the power was lost. Some policies are limited to coverage for electricity lost in the home or where the electricity enters the home. Others will limit it to within so many yards from the home. Your agent should be able to tell you about the availability of coverage and how much it would cost.

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Umbrella Coverage
Q. What is a personal umbrella liability policy?
A. The personal umbrella liability policy is an insurance contract designed to increase the liability protection beyond what the policy owner already has on their home and auto insurance policy. Together with home and auto insurance policies, broad personal liability protection is attained through the purchase of a personal umbrella policy. Coverage is usually purchased for $1,000,000 or more.

Q. How do I know if I need a personal umbrella liability policy?
A. It used to be that the only people who needed personal umbrella liability policies were wealthy individuals who had sizable personal assets that would be at risk in a lawsuit. However, in our litigious society, many people are realizing that they have a need for more liability insurance than what is provided under their home and auto policies. The personal umbrella policy is ideally suited to provide this coverage. Talk to one of our Account Representatives, who can help you determine your needs.

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