These days, when a customer has a question, the first place they turn to is the Internet. For better or worse, Google has become our trusted source of advice on all things, including insurance! From the general to the specific, search engines are ready to pop out answers to life’s queries.
From personal to business insurance, there’s seemingly no end to the questions folks have about their policies. Following are the top five most commonly asked questions about insurance that individuals want answers to. Be aware, just like other topics, don’t believe everything you read. The internet is full of information, but not all of it is correct.
“Why Is My Insurance So High?”
Though this question is quite broad, insurance agents working in all categories have likely heard it before. Rising insurance costs have many consumers worried, and they’re looking for answers on the web. Though the question often pertains to Auto insurance, it also refers to Homeowners insurance (especially in catastrophe-prone areas), Health insurance, and Commercial Insurance.
The answer? One of the simplest reasons for any type of insurance is risk. When a company provides insurance of any type, it takes on risk — and there are many specific factors that can make one a low-risk or high-risk individual or property to insure. With car insurance, for instance, a driver with a poor record (a history of tickets, for example, or accidents) would present more risk and therefore receive a much higher premium.
There are other factors behind the rising costs of insurance as well. The risks of climate change and billion-dollar losses from severe weather events in certain geographical areas have made Homeowners insurance premiums skyrocket. Of even greater impact today is the cost to repair something in the event of a claim. Material costs have skyrocketed and this directly impacts insurance premiums.
“Do Credit Scores Affect Premiums?”
This commonly asked question often pops up when people are looking into their credit score for the first time, and wondering if even the act of looking at their credit score impacts it. While checking a credit report or credit score won’t hurt it, credit scores play a complicated role in obtaining various types of insurance in most states.
Most insurers look at something called a credit-based insurance score, which is calculated by the insurer using an individual’s credit history to predict the likelihood of filing a claim or paying their premium. Overall, credit history is just one of many factors used in determining insurance rates.
“What Does General Liability Insurance Cover?”
Many small business owners have questions regarding General Liability insurance. What is it, and what does it cover — and maybe most importantly, what doesn’t it cover? General Liability insurance covers a company for claims regarding third-party bodily injuries or property damage that stem from its operations and activities.
However, it’s important for clients to understand that General Liability insurance doesn’t cover employee injuries or sickness (Workers’ Compensation insurance is needed for that), commercial auto accidents, damage to the actual property, or employee errors. Additionally, it’s wise to invest in Commercial Excess Liability insurance in case any claims exceed the financial limit of the General Liability policy.
“Does Homeowner Insurance Cover Everything?”
As with many types of insurance, multiple policies are required to ensure an individual is properly covered. This is often the case when it comes to Homeowners insurance, and as shown by this commonly asked question, there are some things that aren’t covered under basic Homeowner policies.
Firstly, though, what is usually covered? This can vary widely depending on the policy, as there are often add-ons to standard Homeowner insurance plans. But Homeowners insurance typically covers the dwelling (home), other structures on the property, personal belongings (up to a certain limit), and personal liability (if someone else is injured on the property or files a lawsuit against you).
What’s not covered, however, and may require additional insurance? Large disasters like earthquakes and floods are excluded. And maintenance issues caused by neglect (such as rot, rust, mold, or termites) are usually excluded as well.
“Why Do I Need an Insurance Agent?”
With so many policies available to purchase directly online, many people seem to wonder why they would want to work with an insurance agent. For any type of insurance, an agent is extremely helpful — after all, they work in the industry full-time and know how to shop for different plans based upon your specific needs. Insurance agents generally help an individual compare quotes, walk through payment options, and continue to navigate any policy changes or updates in the years to come.
*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.