 Frequently
Asked Questions
AUTO
What is the difference between full tort and
limited tort? Which option should I select?
Since 1990 Pennsylvania law allows you to choose tort options. Full tort does not limit your
right to sue. Under limited tort you are giving up the right to sue for non-economic damages
most commonly known as "pain and suffering" except in the cases of serious injury. The law defines
serious injury as death, serious impairment of bodily function or permanent serious disfigurement.
If your injury is determined to be serious you will keep your right to sue for non-economic
damages even if you have elected limited tort. This selection will be effective whether you
are going after the responsible driver's insurance company or if you are filing the claim with
your own insurance under an uninsured or underinsured motorist claim. There is also an exception
that allows for non-economic damages if the responsible driver is convicted of or accepts ARD
for driving under the influence of alcohol or a controlled substance, or if the responsible
driver's vehicle is registered in another state. Several years ago the differential for tort
options was changed. Depending on the coverages you select, the additional cost for the full
tort option will range from 20-40%.
What deductibles are available for comprehensive
and collision? Should I select higher deductibles?
Damage to your vehicle is covered subject to a deductible. You can select deductibles for comprehensive
and collision coverage. Collision coverage responds when you collide with an object or vehicle
other than an animal. Comprehensive coverage responds for animal collision and other types of
damage including theft, vandalism, and glass breakage. Deductibles are available as low as $50
or $100 for some coverages. Higher deductibles are also available such as $500, $1,000, $2,000
or more. Over a number of years, if you don't cause an accident, the savings may be much more
than the deductible exposure.
What limits of liability are adequate?
Bodily injury damages in auto accidents are driven by medical costs. Medical costs have skyrocketed.
Those who are seriously injured seek damages in multiples of medical expenses incurred. $100,000
or $300,000 are not large amounts of money in this context. Consider bodily injury liability
limits of $300,000, $500,000, or more and consider a personal liability umbrella with limits
of $1,000,000 or more to provide additional coverage.
Should I purchase a personal liability umbrella
policy?
You probably should consider purchasing a personal liability umbrella policy with a limit
of $1,000,000 or more. Personal umbrella policies will pay beyond your underlying policy limits
for personal liability and auto liability exposures. Umbrella policies include coverage for
personal injury which covers exposures such as libel, slander, defamation of character, wrongful
eviction or malicious prosecution. Most umbrellas provide worldwide coverage and the umbrella
policy covers costs of defense in addition to the limit of liability you have selected. The
cost for a personal liability umbrella depends on the number of vehicles, drivers, boats, recreational
vehicles, etc. A policy with a $1,000,000 limit generally costs between $200 and $400 per year,
depending on the exposures. Additional layers of coverage are less expense.
Uninsured/Underinsured motorist coverage -
What is covered and what limits should I choose?
Uninsured and under-insured motorist coverage provides coverage for you and members of your
family if you are injured in an accident caused by someone else without insurance or with low
limits of insurance coverage. You can recover under uninsured and underinsured motorist coverage
for any type of damages that you could recover from the insured driver. This includes economic
and non-economic loss. Your uninsured and underinsured motorist coverage is linked somewhat
to your tort selection. Uninsured and underinsured motorist coverage is not required in Pennsylvania.
You can purchase coverage equal to your bodily injury liability limits. Coverage can be stacked
or you can reject the stacking of coverage. If coverage is stacked, the limits are multiplied
times the number of vehicles on the policy. The higher stacked limit is available per accident.
Premiums are higher for stacked coverage than they are for non-stacked coverage. You should
select limits and stacking based on your coverage needs and costs.
The loan on my vehicle has been paid off.
Why does the loss payee name still show on my policy?
If your vehicle has a loan or is leased, the financial organization making the lease or loan
requires that their organization be included as a loss payee under your policy. If you have
an accident, their name goes on the check along with yours. When the loan is paid, you should
notify your agent to remove the interest of the loss payee. In most cases, the financial organization
does not notify the insurance company or agent.
What is the mature driver improvement course
and how do I qualify?
Pennsylvania law provides a 5% discount for drivers 55 and older who successfully complete
a mature driver improvement course approved by PENNDOT. All drivers on the policy who are age
55 or older must have completed the course in order for the reduction to be granted. A certificate
is provided by the course provider and must be provided to the insurance agency.
I have a youthful driver to add to my policy
in the near future. What should I consider?
You pay a substantial additional premium for youthful drivers on your auto policy. Discounts
apply for good students and driver training programs. Provide the proper documentation to your
insurance agent. When you add a new driver, you can save the costs for comprehensive and collision
if that driver is rated to an older and lower value vehicle. If you do maintain full coverage
on the vehicle to which the youthful driver is assigned, consider higher deductibles for that
vehicle or higher deductibles for all vehicles on your policy. Renewal of your policy can be
refused if there are two accidents in a three-year period. It is a good idea, especially in
the case of youthful drivers, to keep minor accidents off your record.
I have a student away at school. How will
this affect my auto insurance?
If a student is away at school without a vehicle and the school is located 100 miles or more
from home, most companies provide a substantially lower rate. If the student is away at school
with a vehicle, a lower rate may be available if the insurance company agrees to garage the
vehicle at school and if the rating territory of the school location provides for a lower cost.
How should I handle the reporting of auto
insurance claims?
In many cases, you should report auto insurance claims promptly to the agency. Some carriers
require or prefer that claims be reported directly to the insurance company. They provide 800
numbers which claim 24-hour service in reporting claims. Most insurance company claim departments
are not open on evenings or weekends and claim reporting is outsourced to firms that do not
know anything about your policy or coverage. For claims that do not involve injuries, you may
decide to pursue a claim through your insurance company or through the insurance company of
the responsible driver. If your deductible is substantial, the latter approach may be more satisfying.
If you have already had an accident under your policy and you report a second accident which
is minor you may jeopardize the renewal of your coverage. Agency personnel are available to
return calls to you with questions about accidents that occur after hours. Whether you report
the claim directly to the company or to the agency, you can make a phone call to the agency
at any time if you are not sure how you want to handle a claim.
I am renting a vehicle on vacation in the
US or Canada. What coverage do I need to purchase from the rental car company?
If you have a vehicle insured under your personal auto policy with comprehensive and collision,
generally speaking, physical damage to a rented vehicle which is a private passenger vehicle,
pick up or van extends to the rented vehicle with the same deductibles. Unfortunately, the rental
car contract may make you responsible for more than what is covered by your policy. For accidents
that involve substantial damage, some rental car companies can make a charge for diminished
value. They can also charge more for loss of use than the amount that would be covered by your
policy. Some rental car companies will charge the full value of the vehicle to your credit card
until your insurance company settles the claim. Depending on the cost of purchasing collision
damage waiver from the rental company and the length of your rental and any details of your
travel, you may want to consider purchasing the collision damage waiver to reduce or eliminate
these exposures.
I am renting a vehicle on a vacation in Europe
or Mexico. Do I need special coverage?
Generally speaking, the personal auto policy does not provide coverage for vehicles rented
outside the United States and Canada. A personal liability umbrella policy may provide worldwide
liability coverage but will not cover physical damage to the rented vehicle. You may need to
purchase both liability and physical damage coverage for rentals outside the United States and
Canada.
HOMEOWNER'S
What limit of coverage should I maintain
for personal liability?
Lawsuits are the "American Way." You should provide a minimum of $500,000 of coverage for personal
liability under your homeowner's insurance policy (some companies offer a primary limit of $1,000,000).
You should also consider an umbrella policy to provide an additional $1,000,000 of personal
and automobile liability coverage. The cost to provide an additional $1,000,000 of coverage
is generally a few hundred dollars per year. (Higher limits are available up to $5,000,000.)
Should I purchase a personal liability umbrella
policy?
You probably should consider purchasing a personal liability umbrella policy with a limit
of $1,000,000 or more. Personal umbrella policies will pay beyond your underlying policy limits
for personal liability and auto liability exposures. Umbrella policies include coverage for
personal injury which covers exposures such as libel, slander, defamation of character, wrongful
eviction or malicious prosecution. Most umbrellas provide worldwide coverage and the umbrella
policy covers costs of defense in addition to the limit of liability you have selected. The
cost for a personal liability umbrella depends on the number of vehicles, drivers, boats, recreational
vehicles, etc. A policy with a $1,000,000 limit generally costs between $200 and $400 per year,
depending on the exposures. Additional layers of coverage are less expense.
I have jewelry and other valuable items.
How should they be insured under my policy?
The homeowner's policy generally provides limited coverage for certain classes of personal
property. These classes include cash, coins, jewelry, furs, fire arms, silverware, and business
property. Limits may apply for other classes. In some cases the limits apply only for theft
and in other cases limits apply for all causes of loss. Endorsements or policies are available
to provide blanket or scheduled coverage for valuable items that are not properly covered under
the regular homeowner's coverage form.
I have a finished basement with a sump pump.
Will my policy respond to damage if the sump pump malfunctions or overflows?
Many homeowner's policies exclude water damage for water or waterborne material that backs
up through sewers or drains or overflows or is discharged from a sump pump or related equipment.
Flood, ground, or surface water are also excluded. A separate endorsement is available to provide
coverage for water back-up of sewers and drains and sump pump malfunction or overflow. Homes
with a sump pump and finished basement are most susceptible to these losses. Many companies
offer this coverage with a limit of $5,000 to $10,000 per loss. A few companies offer this coverage
without limits. Annual costs range from $25 to $75.
What does a flood insurance policy cover?
Water back-up and sump overflow coverage will not help if ground or surface water rising on
all sides of the building causes water damage to your basement or a section of your home built
over a crawl space or on a slab. Flood coverage can and should be purchased to cover this exposure.
Homes outside of a normal flood plain area can purchase a preferred flood policy with low premiums
to provide coverage for this exposure. Current flood policies still provide limited coverage
for finished building components and contents below ground level. Many flood losses occur outside
identified flood plain areas. You should understand coverage limitations but consider purchasing
flood insurance coverage even if your mortgage company does not require it.
I run a business from my home. What coverage
do I need?
Homeowner's policies provide limited or no coverage for a business conducted in your home
or in a detached structure at your home location. Endorsements are available to expand coverage
and you may need a separate policy to provide the proper coverage. Assume you have no coverage.
Ask questions and evaluate your options to cover your home-based business.
If I pay off my mortgage, refinance or pay
off a home equity loan, who do I need to notify?
In the past few years there has been a flurry of refinance activity. Home equity loans and
home equity lines of credit are very popular. If you pay off a mortgage or take a new loan,
the interest of the financial organization must be added or deleted. The insurance company or
agent is often not notified when a loan obligation is satisfied. Communicate any changes to
your agent, review your renewal policy, and make sure interests listed are correct.
What coverage do I need if I rent a home
or apartment?
Renters need coverage for their personal property and they should choose to provide coverage
based on replacement cost. They also need coverage for additional living expense in case they
need to live somewhere else temporarily after a fire or other covered loss. Renters also need
personal liability insurance coverage. Renters should not expect that any coverage is provided
for their personal property or personal liability exposures under the landlord's insurance.
Because renters are not paying a premium to insure the building, coverage is generally very
inexpensive.
HEALTH
What kind of health insurance coverage is
available?
There are many situations that call for the purchase of individual health insurance coverage.
An individual or family may need coverage because they are not covered under a group insurance
plan. They may need coverage because they have not met a waiting period to be covered under
group insurance. They may need coverage because they are not working full time and are not eligible
for group insurance coverage. They may need coverage because they are temporarily unemployed
or a student who is not eligible to be covered as a dependent. Even those employed who are eligible
for group insurance coverage may choose to insure themselves or dependents under individual
health insurance plans to reduce costs. Most individual health insurance plans are individually
underwritten. This means that rates may be adjusted to cover health conditions or conditions
may be excluded. Individuals with recent or serious medical problems may be declined for individual
health insurance coverage. Most plans available today are HMO or PPO plans. HMO plans require
that you pick a primary care physician and obtain a referral from your primary care doctor for
other medical services. PPO plans allow access to participating providers without referrals.
Some plans may have prescription coverage included with small co-payments. Other plans may provide
calendar year deductibles and cover prescription drugs only after the calendar year deductible
has been met for all medical expenses. Current individual medical HMO plans are available from
Keystone and Aetna. PPO plans, including high deductible (HSA) plans are available from Aetna.
Competitive PPO and HSA options are also available through Golden Rule (a United Healthcare
company) and Assurant Health (Time Insurance). Additional options may be available for the self-employed.
Short term medical coverage may serve the needs of those who need coverage for a limited period
of time. Check out resources listed on our health insurance menu. These include rates, applications,
online quoting and online applications.
LIFE
I am interested in life insurance. How do
I determine the amount and kind?
Stated simply, the amount of life insurance needed depends on your income and your financial
responsibilities to your dependents. The amount can be determined by considering the amount
that would be required for final expenses, mortgage and debts, education costs, family income
and taxes and estate costs. In the process, you would consider Social Security benefits available
and other financial resources are quoted at 5-10 times your income. Some situations can require
substantially more coverage than these "Rules of Thumb". Insurance needs calculators are available
to assist you. TR Insurance personnel can also help. One kind of life insurance that is simple
and inexpensive is term life insurance. Term life insurance plans are available with level premium
periods of 10, 15, 20, 25 and 30 years. Personal health history, family history and tobacco
use will affect the cost of coverage. You can run online term life insurance quotes from the
resources available on our life insurance menu. Permanent insurance plans are also available
with lifetime coverage and level premiums.
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