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How does where I live affect my premium?

Where your car is kept directly affects your chances of having an accident or becoming a victim of theft or vandalism. The likelihood of encountering these problems increases in larger, more densely populated cities, while such incidents remain relatively low in rural areas.

Additionally, regional insurance rates are affected by time and efficiency of police response and law enforcement, local road and traffic conditions and the quality of local medical services. Insurers even factor in the litigation rates in a given area (how many lawsuits are filed, go to trial, are settled out of court and for how much.)

Do all states require some kind of liability insurance?

No. While not all states require auto insurance, some have “financial responsibility laws” mandating all drivers must be able to pay for any damage or injury they may cause. However, liability insurance is still the best way for you to meet your state’s financial responsibility requirements.

UM and UIM policies are offered by law in all states, including no-fault states. In fact, some states require all motorists to carry this coverage in order to gain protection from inadequate insurance coverage of other drivers.

How do I keep my insurance company from canceling my policy?

Besides maintaining a clean driving record, consider investing in special safety and security features for your car. If you have been in an accident, consider taking a defensive driving course. Your insurance agent may be able to provide other tips.

What happens when I loan my car to someone? Is that person covered by my policy? Am I still covered?

Yes. Liability and coverage for physical damage (i.e., comprehensive and collision) always follow your car. So, if a friend borrows your car and has an accident, you’re still protected against the cost of damages or injuries. Plus, if the driver of your car is insured, his/her policy will also be available to cover the cost of damages and injuries.

The same rules apply when you borrow someone else’s vehicle — your own insurance follows you no matter whose car you are driving. But the vehicle owner’s policy is the key coverage if you have an accident.

Am I covered for natural disasters or “Acts of God”?

Comprehensive insurance, which covers you for fire and theft, generally covers you against damage by flood, earthquake, hail and other natural perils, except when your car is overturned (which is technically considered a collision). If you have specific concerns about the safety of your vehicle in natural disasters, contact your agent for information on catastrophic coverage.

How can I challenge my insurers if they refuse to cover a claim?

Usually, insurers that refuse to cover a claim have a strong legal reason for doing so — even if you disagree. First, contact your agent if you feel you are being treated unfairly because your agent is your strongest advocate in insurance matters. But if it is a legal problem, you may have to hire a lawyer.

Talk to your agent if you have a problem with your insurer, and talk to your state insurance department if you want more specific information on state regulations and legal precedents.


Who decides what insurance to get when I make my house payment: the mortgage company or me?

You do. The mortgage company collects a set amount from you each month in order to protect their investment. This money is put in escrow and covers your insurance and taxes when they fall due. However, the policy is still yours and you may select the insurance you feel offers the best coverage at the best rates. In fact, if you allow the mortgage company to choose, you might well end up paying more for your homeowners insurance.

What exactly does a homeowners policy cover?

“Exact” coverage is tricky to define because there are different policies and about 900 insurance companies writing most of the property/casualty business in the United States. However, 80 percent of homeowners policies are based on a standard form. All homeowners policies cover two important areas: property and liability.

These cover your structures and possessions – property insurance – and protect against personal liability. Personal liability, as its name implies, means you are legally obligated to pay money to another person for actions caused by you, your family, or your property. That liability extends to medical payments to others for injuries caused by you or your family.

Are floods, earthquakes, and other natural disasters covered?

Most catastrophes are covered; flood and earthquake damage, however, are not covered by a standard policy and both are more common than many people realize.. Check with your agent about special catastrophic policies for normally excluded conditions like floods and earthquakes.

Are there exclusions I should know about?

There may be exclusions listed and defined in your policy such as neglect, intentional loss, “earth movement,” general power failure and even damage caused by war. If you fail to take care of your property (e.g., a leaky roof), you may not be covered. Obviously, if you intend to lose an object or damage your property, there is no coverage.

One other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by governmental bodies that drive up the cost of rebuilding or repairing after a loss occurs may not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher grade or more expensive materials than the original ones being replaced, the new materials may not be covered for the full price.


How expensive is renters insurance?

Renters insurance is typically available for as little as $100 a year.

Does my landlord’s insurance protect me?

Generally, no. The property owner’s insurance covers the building itself and seldom a tenant’s possessions. Clarify this with your landlord before signing a lease.

Is my landlord is liable if someone trips in my apartment and gets injured?

Again, the owner’s policy may specifically exclude liability for something that occurs within your rented residence. You could be held liable for injury to another person or damage to another person’s property if the incident occurred within your rented residence.


I’m just getting my business started. Do I need insurance immediately?

Yes, because the chance of suffering a loss begins with the first day of business. You can’t get help after the fact. If you suffer a loss and have no insurance or have improper or insufficient coverage, there is very little, if anything, your insurance agent can do to help you. You must be prepared for the risks that are inherent in any business and the losses, sometimes catastrophic, that they can cause.

Also, many states and local jurisdictions require that businesses be insured to begin operating. And if you rent space for your business, your landlord probably requires that you be adequately insured as well.

I don’t have any major business assets. Why do I need insurance?

Every business has some property. And, when you think about it, your business is your property. Just like your home and your car, your business needs to be protected from loss, damage and liability. In addition, your business is your source of income, so you need protection from the potential loss of that income.

Generally, there are two types of insurance – property and liability. Property insurance covers damage to or loss of the policyholder’s property. And if somebody sued for damages caused by you or your possessions (other than a vehicle covered by your insurance policy), the cost of the suit — both defending it and settling it if necessary — would be covered by your liability insurance.

Does insurance coverage vary for different businesses?

It can. Many small businesses are now insured under package policies that cover the major property and liability exposures as well as loss of income.


I employ less than 50 employees in my business am I mandated to provide
A Group Health Plan?

No, your business is not required to provide coverage. The mandate only applies to companies that employ greater than 50 employees across all affiliated companies.

What are the rules for extending dependent coverage to age 31 here in
New Jersey?

The law permits children who age out of a group health benefits plan the option of continuing or enrolling in a parent’s group health benefits plan until the child reaches his or her 31st birthday, marries, has a child, moves out-of-state (and does not become a full-time student), enrolls in other group or individual health coverage, or becomes entitled to Medicare. The over-age child may enroll upon age-out, but may also enroll whenever he or she becomes eligible.
What are the rules for extending dependent coverage to age 26?

Beginning September 23, 2010, the PPACA has required all plans to provide coverage without limits to dependents until their 26th birthday.*

Health care reform also requires employee health plans to reimburse medical care expenses to any covered dependents until their 26th birthday, or the scheduled termination date determined by the plan (such as end of month or end of year following the 26th birthday). Spouses and children of dependents are not eligible unless the plan already covered them.

In addition, young adults qualify for this coverage even if they no longer live with a parent, are not a dependent on a parent’s tax return, or are no longer students. Both married and unmarried young adults can qualify for the dependent coverage extension, although that coverage does not extend to a young adult’s spouse or children. Student, military or marital status does not affect dependent eligibility.

We interpret a dependent for purposes of this requirement to mean a son, daughter, stepson, stepdaughter or eligible foster child of the taxpayer.

Beginning 1/1/14, all plans must cover dependents to age 26, even if they have access to coverage through their own employer.

Health care insurance reform requires that adult dependents be treated the same as all other dependents. For example, employers can’t charge more for adult dependents.

*Some states require that insurance policies provide dependent coverage beyond age 26; these rules and any associated restrictions apply after age 26.

I employ more than 50 employees what am I obligated to do under the
Affordable Care Act (AKA ObamaCare)?

Beginning January 1, 2015 the employer mandate applies to employers with 100 or more full-time or full-time equivalent employees. Employers must offer medical coverage that is “affordable” (costs no more than 9.5% of an employee’s wages) and provides “minimum value” (covers 60%+ of total costs) to full-time employees and their children up to age 26 or face penalties. Employers with 50-99 full-time employees starting in 2016.

Provisions for Businesses That Offer Coverage to Most, but Not All, Employees in 2015: Under the proposed rules, applicable large employers would need to offer coverage to at least 95 percent of their full-time employees to avoid the most significant penalties. The final rule provides transition relief that will phase in this requirement over two years, beginning in 2015.

To avoid a payment for failing to offer health coverage in 2015, applicable large employers will need to offer coverage to 70 percent of their full-time employees. In 2016 and beyond, applicable large employers will need to offer coverage to 95 percent of their full-time employees to avoid these penalties.

This rule is intended to provide relief to employers that, for example, may offer coverage to employees working 35 or more hours per week, but not yet to those employees who work 30 to 34 hours per week.

I employ more than 50 employees what are the penalties if I don’t offer
coverage in 2015?

The penalties will phase in depending on the size of your company. In 2015 the penalties will only impact groups that employ greater than 100 employees. The penalties will be expanded to include 50-99 employee groups in 2016. If no coverage is offered to full-time employees AND any full-time employee receives premium assistance from the federal government, the employer penalty is:

$2,000 annually for each full-time employee minus the first 30 employees.

If coverage is offered to full-time employees BUT any full-time employee receives premium assistance from the federal government, the employer penalty is the lesser of:

$3,000 for each employee receiving premium assistance OR

$2,000 per employee for each full-time employee minus the first 30 employees.

For more information on the Health Care Reform, view our 2014 Compliance Checklist.