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Frequently Asked Questions

Please see below for frequently asked questions which relate to personal insurance, commercial insurance and group health insurance.

Personal Home Auto Commercial Employee Benefits
What is the definition of a flood?

FEMA defines a flood as “A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal water; runoff of surface waters; mudflow; or collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.”

Does my homeowner’s policy cover damage caused by flooding?

No. Most people think that these types of losses are covered by their homeowner’s policy. To properly insure your home you need to buy a separate policy for flood.

I just got a speeding ticket will my automobile policy premiums increase?

In general- No. Most companies we work with offer their clients a “second chance”; but if there have been a few moving violations then your insurance company might increase your premium at renewal. This is where a good agent is valuable to convey various information to the insurance company in relation to the moving violations.

Should I insure my valuable articles?

Absolutely! This is the best way to protect these cherished items against various types of losses. Most homeowner’s policies provide limited coverage for these items. The most effective coverage is to schedule the item with the insurance company. For most items an appraisal is not needed and it is very easy to insure these items properly.

How do I properly insure my contents in my home?

The best way is to document what you have. This can be done simply by walking through your home with a video camera and documenting what you have. Another way is to use an inventory software program. One we recommend can be found at

What is risk analysis?

Risk analysis is a process by which you consider all possible risks and determine which are the most significant for your particular business. It may make sense to mitigate some risks by purchasing insurance. Other risks can be eliminated without purchasing insurance. After considering how likely various losses are to occur, how expensive they are to mitigate and how much money you have to spend, you decide the optimum strategy for dealing with the various risks.

What types of risks need to be considered?

The size of the company, type of industry, type of organizational structure, capitalization, geographical area, management team, degree of experience and expertise in the targeted business, capitalization, competitive environment and many other factors can have a bearing on the risk environment for the company. The business owners should address such issues in their business and strategic analyses of the company’s situation. A few of the potential operational risks are as follows:Risk of Property Damage, Risk of Inventory Loss or Damage (through spoilage, etc.), Risk of Loss from Employee Theft, Risk from Various Liabilities (including injuries to customers or to others), Risk from Errors and Omissions Liabilities, Business interruption Risks, Worker’s compensation, Unemployment, Employee benefits, Risk of death of an owner or key employee, Risk of disability of an owner or key employee.

How are rates determined for business property and casualty coverages?

The insurance company has to pay for the cost of the coverages provided to the insured businesses. The predictability of these costs will vary based on the type of coverage. Some losses are immediately apparent (e.g. fires) while others take years to become final (e.g. court judgments for liability coverages). Various expenses, such as getting customers and administrative costs of running the business must also be paid. Investment returns on premium dollars not yet spent add to the available funds to pay these expenses. Insurance companies judge all these and other factors including competitive forces, the legal environment, the investment returns likely to be earned for some years in the future. Then they set rates that make for a profitable operation, subject to regulation by the insurance departments.

Some types of package coverages such as business owner’s policies are underwritten by class of policies rather than as individual companies. If your business fits in a certain classification the whole group of businesses in that class is underwritten together so that rates are set for all of them rather than considering each individual company. This leads to more efficient underwriting and helps to keep the rates low if your business meets the requirements to be accepted in one of the classifications. It also means that such policies have less flexibility than you would have if you purchased individual policies for each type of coverage.

What are property related risks?

Property damage includes a number of direct risks as well as some indirect ones. Direct damage would include fire or flooding damage to the building where you do business while indirect damage would include being out of business temporarily because of damage caused by a fire or flood. Whether you lease or rent or own the building where you conduct your business, you will probably need some type of property insurance.

You need to be certain that any property insurance coverage is adequate. Decide whether to base the coverage on replacement value, actual value (replacement less any depreciation), or some other amount you stipulate and deem sufficient.

Is there a comprehensive insurance policy for business owners with many coverage needs and a budget?

Yes. Many businesses are eligible for a business owner’s policy (BOP). A BOP combines many important features of commercial property, general liability and business income policies. The BOP does not cover everything and is not available for everyone. However, those who qualify, appreciate the ability to manage so much coverage under a single policy.

What is Flood Insurance and is it included on my Business policy?

Flood insurance coverage is excluded under most commercial property policies. Flood Insurance coverage for flood damage is available from the federal government under the National Flood Insurance, or can be added by endorsement.

What are casualty risks?

Many forms of business insurance (other than property coverage, life insurance or disability insurance) fall under the general category of Casualty Insurance. This includes such risks as workers’ compensation, automobile coverage (for business vehicles) and liability coverages. Since there are various types of potential liability for a business (involving actions of employees, product defects, etc.), it is important to consider all the liability exposures and make sure that you have adequate insurance against any that may be significant for your business. Your insurance advisor or insurance company should be able to advise you whether individual liability policies or a package of liability coverages will be needed.

What are the Benefits of Liability Insurance?

General Liability Coverage includes: Bodily Injury Liability Coverage: Help protect you incase injuries occur to other people resulting from your operations. Property Damage Liability Coverage: Protection incase damage occurs to the property of others. Personal Injury Liability Coverage: Helps provide you with protection for offenses such as false arrest, libel, slander and wrongful entry. Advertising Injury Liability Coverage: Helps cover your legal liability for a variety of offenses arising out of the advertising of your business’s goods and services.

What are the benefits of Commercial Auto Insurance?

Liability Coverage – In case you’re sued as a result of an auto accident. Collision Coverage – Helps cover physical damage to your vehicle due to collision or upset. Comprehensive Coverage – Helps cover physical damage to your vehicle due to fire, theft and glass breakage. Rental Reimbursement Coverage – Helps cover the cost of a replacement vehicle for a specified period of time when your vehicle is disabled due to an insured loss.

What is Commercial Excess Liability?

Commercial Excess Liability is a form of liability insurance providing policyholders additional coverage over what is provided with basic liability policies, i.e., primary automobile, general liability and workers compensation.

To be eligible for excess liability coverage, most insurers require the insured carry a certain amount of basic liability protection. Commercial Excess Liability then fills the gaps of their primary automobile, general liability and workers compensation policies. It provides additional liability limits to the other coverage owned, which is important when the underlying policy is exhausted or reduced by loss.

What is a Group/Employer plan?

These types of plans are available to you through your place of employment if your employer offers this benefit. Most employers that offer their employees health insurance make you wait until 30 or 60 or 90 days after you’ve become employed before you can get on the plan. By state law (and some states may vary), benefits are a little different on group plans than they are on individual plans. For example, most individual plans do not include maternity benefits, but almost all group plans do.

Mental health benefits are not usually covered very well on individual plans, but on most group plans, mental health benefits are treated like any other illness. Almost all group plans will cover your pre-existing conditions as soon as you become included on the plan, and with no waiting period. This means that if you have a heart condition and get a job that provides you with health insurance benefits, you could have a heart attack the day you become covered and those medical bills will be covered by the group insurance policy.

Overall, most group plans are different and can and should be tailored for your company. We can help you customize a plan for your company.

What is Coinsurance?

Coinsurance is a cost-sharing requirement where you are responsible for paying a certain percentage and the insurance company will pay the remaining percentage of the covered medical expenses after your deductible is met. For a health insurance plan with 20% coinsurance, once the deductible is met, the insurance company will pay 80% of the covered expenses while you pay the remaining 20% until your out-of-pocket limit is reached for the year.

Typically, the out-of-pocket limit is the maximum amount you will pay out of your own pocket for covered medical expenses in a given year. For a plan with a $2,000 out-of-pocket limit, you will pay a $1,000 deductible and $1,000 coinsurance while the insurance company covers the remaining $98,000 of the heart surgery bill. Even if you are hospitalized again in the same year, the insurance company will pay 100% of your covered expenses within the limit of the lifetime maximum.

What are Co-pays?

A co-payment or co-pay is a specific flat fee you pay for each medical service, such as $30 for an office visit, after which the insurance company often pays the remainder of the covered medical charges. Let’s say you are not feeling well and went to see your doctor who charges $200 for the office visit. If your insurance plan has an office visit co-payment of $30, then you will only be responsible for the $30 and the insurance company will cover the remaining $170.

What is “Out-of-Pocket-Maximum?”

This is the amount of money one would pay out of their own pocket towards their medical expenses in any given year. An out of pocket expense can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, that is referring to how much the insured would have to pay for the whole year out of their pocket, excluding premiums. Usually, your maximum out-of-pocket is never more than a couple of thousand dollars over and above your chosen deductible.

What is a network?

A network is a list of doctors, hospitals and other providers that have contracted, or agreed, with an insurance company to do business with the insurance company. The providers fees have been pre-negotiated, which means that the insurance company will not necessarily pay the doctor or hospital what your actual medical bills are, but will pay a lower amount. For example, when you have a gall bladder removed at a hospital, the hospital’s charges, if you did not have health insurance, might be $10,000. But under the network pre-negotiated amount, the hospital may only receive $4,000 as payment in full. This saves you and the insurance company money.

If you have a health insurance plan that utilizes a network and you use providers that are not part of the network, the amount of money that you would have to pay for those services will be considerably higher than if you had used providers that were in the network. Your insurance company will probably pay some part of those non-network bills, but you’ll be paying a whole lot more. Always stay in your network if possible.

What is a Fully Insured Group Health Plan?

Health insurance purchased by an employer from an insurance company. Fully insured health plans are regulated by state governments.

What are Self-Insured Group Health Plans?

Plans set up by employers who set aside funds to pay their employees health claims. Because employers often hire insurance companies to run these plans, they may look to you just like fully insured plans. Employers must disclose in your benefits information whether an insurer is responsible for funding, or for only administering the plan. If the insurer is only administering the plan, it is self-insured. Self-insured plans are regulated by the U.S. Department of Labor.

Reimbursement Arrangements (HRA)

Health Reimbursement Arrangements (HRAs) provide another IRS sanctioned approach to implementing a Consumer Directed Health Plans. Usually established in combination with a high deductible plan, employees are provided an employer sponsored “health spending account”.

Dollars allocated to these accounts may be used by employees to cover a portion of the plan deductible, out-of-pocket expenses or other expenditures as designated by the employer. Unused balances in the HRA at the end of the year are “rolled-over” to the next year. In this manner, employees accumulate higher and higher spending limits within the HRA. Depending on the objectives of the employer plan sponsor, HRAs may be combined with other plan designs to achieve specific goals.

What Are Flexible Benefit Plans (FSA)?

A Flexible Benefit Plan, also known as a Cafeteria Plan or Section 125 Plan, has been around since the mid-1980s. These programs permit employees to set aside money from their paycheck to cover specific qualified expenses. These expenses may include medical insurance premiums, out-of-pocket medical expenses, dependent care expenses or expenses for work related transportation and parking. The salary reductions made by employees are exempt from income tax and payroll tax. The distributions or reimbursements to cover the qualified expenses are tax-free.

What Are Health Savings Accounts (HSA)?

In December of 2003, Congress passed the most significant tax-advantaged benefits legislation in more than 30 years. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 provides for the establishment of Health Savings Accounts (HSAs) for individuals covered by a High Deductible Health Plan

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