Common Questions About Insurance

Insurance can be a complex topic to understand, as there are many different types of insurance to choose from, each with different coverage details. It can be challenging to know what type of insurance you need and what questions about insurance you should ask when considering your options. Let's start with the basics.

What is insurance?

• Insurance is a type of financial protection that provides coverage in the event of a covered event or loss.
• Insurance can help provide financial protection against financial losses arising from covered events such as accidents, theft, damage, and other events, depending on the policy type and details.
• It can also offer enhanced peace of mind that comes with knowing you have the right coverage in place.

When it comes to insurance, it is important to understand the various types of insurance and the questions to ask when purchasing a policy. These common introductory FAQs about insurance can be helpful.

Insurance FAQs

Here are some common questions people may have about their personal insurance, along with helpful answers.

What information do I generally need when applying for an insurance policy such as home or auto insurance?

When applying for any personal insurance policy, you will commonly need to provide some basic information, such as:

• Full name
• Address
• Date of Birth

If you're applying for car insurance, you also commonly need to provide information about any vehicles you own, such as:

• Vehicle make (the car brand)
• Vehicle model
• Vehicle Identification Number (VIN, typically found on the driver's side dashboard near the windshield and on the driver's side door jamb)

For homeowners insurance and other types of property insurance, you also typically need to provide information about the assets you wish to cover. For a home, this might include:

• The home's location
• The home's size in sq ft, number of bedrooms, and number of bathrooms
• The home's age and construction details (such as wood or brick, roof age, and renovation details)
• The age and condition of the utilities and systems (such as plumbing, electrical, and HVAC)
• Whether the home is a primary or secondary residence, etc.

The insurance company providing any quotes may also request information about your prior claims history. Providing thorough and honest responses to these questions is essential to help ensure you receive the appropriate coverage and pricing for your needs.

In addition to information about yourself and your assets, you should be prepared to discuss limits and deductible options.  

Why use an agent to purchase insurance?

Working with an insurance agent can be a helpful way to obtain an insurance policy. An insurance agent is a professional who understands insurance and can help you select the right policy for your needs. They can also help you understand the different types of insurance and answer any related questions you may have.

Using an agent also helps ensure that you are getting the right policy at the right price. An agent can compare different policies and help you find the most cost-effective option. They can also look for any available discounts you may qualify for.

Learn about the difference between insurance agents and insurance brokers.

How do I determine what kind of insurance I may need?

Determining what kind of insurance you may need depends on the type of assets you own and the amount of coverage you will require to help protect those assets. For example, if you own a home, you should consider homeowners insurance.  Homeowners insurance is also often required by mortgage lenders. If you own a vehicle, you should consider auto insurance to cover potential liability. Car insurance is required in almost all states across the United States, with specific requirements varying by state.

Other types of insurance to consider include life insurance and flood insurance. Since it may be difficult to navigate the insurance details of these types of policies, Acrisure can help make the process easier.

To determine if you need a particular type insurance policy requires evaluating whether the financial risks of being uninsured outweigh the benefits provided by a policy.  An insurance agent can be a valuable resource when making such decisions.

What should I do if I have a claim?

Always review your policy’s terms and conditions and adhere to the claim handing procedures outlined therein. Each policy’s procedures may vary and it is important to follow the prescribed process to help ensure prompt and accurate processing of your claim.

The basic process is to:

• Contact your insurance company and review your policy
• Follow the insurance company's claim procedures
• Retain all of your records related to the claim

It is important to contact your insurance company as soon as possible. You will likely be asked to provide your policy number, a description of the claim and other information which may be required. Your insurance company will then review your claim and make a coverage determination.

If your claim is approved, your insurance company should honor the coverage terms and guide you through resolution.  

For some insurance claims, such as those involving homeowners or auto insurance, insurance companies may issue payment directly to the policyholder or designated third party, such as a contractor or mortgage lender, based on the terms of the policy. This approach allows policyholders the flexibility to select their preferred contractors or garages for repairs, allowing them control over the choice of service providers used.

However, depending on the terms of your particular policy, some insurance companies may hire contractors directly or choose a car repair source for you, especially for large-scale claims or to ensure efficiency and quality control. Insurance companies might also have preferred contractor networks, which can help streamline the process.

To fully understand your options, it is essential to review your insurance policy and discuss the specifics with your insurance provider to determine whether you have the flexibility to select your contractor.

As you go through the claims process, make a point to keep good records. Retaining all records and documentation related to an insurance claim is essential for several reasons:

• Proof of Loss: Documentation acts as evidence to substantiate your claim, providing a clear record of the damages or losses to the insurance company.
• Accuracy and Detail: Comprehensive records help ensure that your claim is both accurate and complete, helping to facilitate smoother processing and minimizing disputes or delays.
• Verification of Expenses: Keeping detailed records of all expenses, such as repair costs or medical bills, is crucial for reimbursement and effective settlement negotiations.
• Policy Adherence: Documentation may be necessary to confirm that actions taken comply with your insurance policy's terms and conditions, preventing potential misunderstandings.
• Dispute Resolution: If conflicts arise over claim specifics or amounts, detailed records are invaluable for helping resolve disputes or appealing insurance decisions.
• Future Reference: Retaining records is beneficial for future reference in similar situations and for reviewing insurance needs and policy updates.

Comprehensive and organized record keeping not only aids in efficient claim processing but can also help protect your interests throughout the claims handling process.

Learn more about how insurance claims work.

What different automobile coverages may be available?

In addition to the minimum coverage required, it is also important to consider the type of auto coverage you may need. This can include liability coverage, collision coverage, and comprehensive coverage. Each type of coverage helps cover different types of claims.

Liability coverage is the most basic type of automobile insurance and covers damage caused by you to another vehicle, person, or property. Collision coverage covers damage to your own vehicle due to an accident, while comprehensive coverage covers damage to your vehicle due to non-collision events such as falling objects, vandalism, or theft.

An insurance agent can help you understand the different types of coverage and determine the best coverage for your needs.

Learn more about the common types of car insurance and what they cover.
Looking for car insurance? Request an auto insurance quote online now.

What factors can affect auto insurance costs?

The cost of auto insurance can depend on many factors, including, but not limited to:

• Type of car
• Driving record
• Where the vehicle is stored
• Where you live
• Type of coverage
• Choice of insurance carrier

Do I need to purchase automobile insurance if my car is older?

If you have an older car, you may wonder if you need automobile insurance for it. In most states, it is required by law to maintain auto liability insurance. This is to help protect third parties from losses arising from accidents caused by you.  The minimum coverage requirements vary depending on your state. It is important to check your state’s specific requirements to determine the minimum coverage requirements for your vehicle.

Owners of older vehicles may choose not to carry collision or comprehensive coverage insurance as it might not be cost-effective.

What does homeowners insurance cover?

Homeowners insurance typically covers damage to your home and property arising from covered claims, such as certain natural disasters and theft, and also covers liability claims if a third party is injured on your property. For example, homeowners insurance may provide coverage in the event a third party suffers injuries after falling down the stairs at your home.  

Also, if you are displaced from your home due to a covered natural disaster or fire, home insurance may cover additional living expenses if you need to temporarily live somewhere else while your home is being repaired.  

It is important to understand what your policy covers and the limits available to you. An insurance agent can help you understand your options and find the right coverage for your needs.

Learn more about what homeowners insurance covers in this article about home insurance types. 
Looking for homeowners insurance solutions? Request a homeowners insurance quote online now.

How can I lower my homeowners insurance?

There are several ways to explore how you can potentially lower your homeowners insurance costs. The first is to make sure you are getting the right coverage for your needs. An insurance agent can provide a comprehensive review to help make sure you have the right coverage in place.

In addition, you can explore whether you’re eligible for potential discounts.   For example, you may qualify for a discount if you bundle your current policy with another insurance policy or policies from the same carrier. You may also qualify for a discount by enhancing your home’s safety features and security systems.  Note that not all insurance carriers will offer these discounts so it’s a good idea to check with your provider.

You can also typically lower your premium costs by increasing your deductible. A higher deductible can mean a lower monthly premium, but it also means you will pay more out of pocket in the event of a claim or loss.  It is important to consider your budget and the type of coverage you need when choosing a deductible amount.

The Bottom Line

Insurance can be a complicated topic, but it is an important risk management tool that can help protect yourself and your assets. Knowing the answers to some of the most common questions about insurance can help you make an informed decision when purchasing a policy. An insurance agent can also help you understand the different types of coverage available and help you find the right policy for your needs.

If you have any more questions about insurance, Acrisure is here to help. Contact us to learn more about insurance and let us help you find the right coverage solution. Or learn more about our personal insurance solutions.