Insurance 101: Auto & Home Deductibles

by California Casualty | Auto Insurance Info, Finances, Homeowners Insurance Info | 0 comments

Insurance policies may seem like they’re written in another language. Yet it’s important to understand the terms so you can get the most out of your coverage. Here’s a quick tutorial on deductibles and what they mean for your auto and home insurance.

What is a deductible?

Simply put, a deductible is the amount of money that you pay out-of-pocket before insurance kicks in. Generally, your insurer deducts the deductible amount from the payment that they make on your claim. You can find the deductible listed on the declarations page, which is the front page of your policy.

Example: If the cost of a repair is $1,500 and your deductible is $500, insurance will cover $1,000.

Unlike health insurance deductibles, you do not have to reach an annual amount in an auto or home policy before insurance will pay. Each time you file a claim, there is a deductible (if it applies). One exception is the state of Florida where hurricane deductibles are once per season.

High vs. Low Deductibles

You select your deductible from a range of choices provided by your insurer. If you choose a lower deductible, that means your insurer will need to cover more in the event of a claim, which will raise the cost of your policy. If you choose a higher deductible, you’re willing to cover more of the cost in a claim, and that will lower your premium.

Lower deductible = Higher insurance premium

Higher deductible = Lower insurance premium

It’s important to note that you will have to pay the deductible if a loss occurs in a car accident, even if you think the other driver is at fault.

You may think twice about filing a claim for a damage amount that is close to your deductible. For example, if your deductible is $1,000 and repairs are $1,250, it may not be worth it. You’d be responsible for the bulk of the repairs, and by filing a claim, your rates may go up when you renew. See our blog about when you need to file a claim and when you don’t.

Auto Policies & Deductibles

There are different types of coverage available to you for your vehicle. Some may be mandated by your state or your lender, and others are optional. Not all coverages carry a deductible.

The following coverages include a deductible, and you may choose a different deductible amount for each one:

• Collision: This coverage kicks in when you collide with another car or object.
• Comprehensive: This coverage is for damage from other causes such as hitting a deer or having a tree fall on your car.
• Uninsured motorist property damage (UMPD): This coverage is for property damage from accidents with another driver who is uninsured and at fault. UMPD may or may not have a deductible; it depends on the state and the type of loss. (Uninsured motorist coverage, which is different than UMPD, does not have a deductible.)
• Personal injury protection (PIP): This coverage pays for medical expenses regardless of who is at fault.

Pro Tip: Being able to set a deductible for each type of coverage allows you to assess the likelihood of your needing that coverage. For example, if you live in the country and might be more likely to encounter a deer than another car, you can lower the deductible for comprehensive and raise the deductible for collision.

There is auto coverage that does not carry a deductible, and that’s liability coverage. With liability coverage:

• If you are at fault: You hit another car and cause property damage and/or driver injuries. Your liability covers the damage to the other driver and his/her car without requiring a deductible. However, your own collision policy pays for damage to your car, which would come with a deductible.
• If someone else is at fault: Another driver hits your car and/or injures you. Their insurance will pay for damages and medical expenses. There are no deductibles.

Your insurer can provide quotes for different levels of deductibles and work with you to determine the best coverage for your budget.

Homeowner’s Policies and Deductibles

Whether you’re buying a new home, or you’ve owned yours for years, your homeowner’s policy protects your investment. Costs vary by location, age of home, construction type, number of bathrooms, and many other factors.

With homeowner’s insurance, there are generally three choices for deductibles:

• Flat deductibles: You would choose a fixed dollar amount, such as $1,000. That is the amount you would pay out-of-pocket before insurance kicks in.
• Percentage deductibles: You would choose percentage of your Coverage A limit. If your policy covers your home at $300,000, and you choose a 2% deductible, you would be responsible for 2% of $300,000 or $6,000.
• Peril-specific deductible option: You could have a flat deductible amount and then carry a different one specifically for wind/hail losses.

There are coverages under your home insurance that do not carry a deductible. These include Scheduled Personal Property (SPP) Coverage, Coverage E: Personal Liability, and Coverage F: Medical Payments to Others.

• Scheduled personal property (SPP) Coverage is for items that have higher values above your personal property coverage limits. This includes heirlooms, watches, jewelry, instruments, furs, or anything about which you are especially concerned such as a special guitar. (Musical instruments for example do not have a contractual limit but you will want to schedule an instrument that is special to you.) SPP offers much broader coverage for your precious items – if you lose a set of earrings, they are covered; if a diamond falls out of a ring, or if a guitar falls off a shelf and gets stepped on, they’re covered. There is no deductible if the covered items are stolen, lost, or damaged. Insurance pays the lowest of the four options: repair, replace, actual cash value or the amount of insurance.
• Personal Liability protects you if a claim is made or a suit brought against you for bodily injury or property damage caused by an occurrence to which coverage applies. These are expenses paid to third parties for their injuries and damages. Liability covers you at your place or anywhere in the world. If you are found liable, the policy will pay up to its limit of liability for damages for which an insured is legally liable. This can include medical expenses, lost wages, pain and suffering, and permanent scarring. The policy also provides a defense in court, if needed, for the policyholder. This is at the insurance company’s own expense.

Insurance may seem complicated, but it doesn’t have to be. Your agent can answer any questions you may have. Contact your insurer to find out more about protecting your most valuable possessions.

This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.

How & When to Add or Remove Someone from Your Policy

by California Casualty | Auto Insurance Info, Finances, Homeowners Insurance Info | 0 comments

Maybe you got married—or divorced. Perhaps a nanny moved in, or your son or daughter moved out. When major life changes like this happen, it’s time to look at your insurance policy. If you need to add or remove someone, here’s what you need to know.

Who must be listed on your policy?

Car Insurance

For car insurance, you must list all people in your household. Your list will include family members but also a roommate, relative or nanny who lives with you. They are added because they live with you, not because they drive your car. It varies from state to state but you may be able to exclude those individuals who won’t drive your car.

• Excluded from rating: If a person meets underwriting guidelines and has coverage elsewhere, they will be listed on the policy but excluded from a rating. That means no premium will be charged for them.
• Excluded from coverage: If the person has an unacceptable driving record, they will not meet underwriting guidelines and will be excluded from coverage. A signed document is usually required.

Some states do not allow you to exclude any drivers, and others will not allow exclusions of drivers who are acceptable. Still other states will not allow the exclusion of a family member or spouse. For details on excluding someone from your policy, see the section on removing someone from your policy.

Homeowner’s Insurance

For homeowner’s insurance, the policy must be in the name of the person who owns the home. That person’s name is listed on the title. If another person, spouse or not, has their name on the deed/title and they live in the home, they will be added as a named insured.

Adding someone to a car insurance policy

You can either call your insurance company or log into your account online to add a person to your policy. You will need their:

• Name and date of birth
• Driver’s license or permit
• VIN for the vehicle(s) that they are driving
• Number of years that they have been driving
• Driving record, including any accidents or violations

Your insurer will then give you a cost quote for the additional driver. Ask your insurer for ways to save money while bundling or with other discounts.

Removing someone from a car insurance policy

If someone on your policy no longer lives with you and/or no longer drives your car, that’s a good time to remove them.

• You will need to provide proof that the individual no longer lives with you.
• If your loved one has passed away, you will need to provide the death certificate.
• If the person still lives with you, your insurer may require you to keep them on the policy or show proof of their own insurance.

Special situation: child away at school

If your child is away at school, and you are expecting that child to return for breaks, this is not the time to remove him/her. If your child has a car that will be kept at home and not driven while he/she is at school, ask your insurance company whether you qualify for a discounted rate. If your child is over 100 miles away without a car, you may receive a discount.

Children away at school are automatically covered by your policy, so you are not able to remove them. However, as your children age and move out, that will change. When should you remove your child from your policy? It really depends upon your unique situation and needs. While there is technically no age limit for children on a policy, many insurance companies require children get their own policy once they are no longer a dependent, even if they are still living with the insured.

Excluding a driver vs. removing a driver:

Some insurance carriers allow you to exclude a driver, even if they live with you. Excluding a driver means that they will not be covered while driving any vehicles. You may be able to exclude a driver for an unacceptable driving record, and therefore reduce your premium. Note that there will be no coverage of that person driving your car even in an emergency, and if that person is discovered to be driving your car, your insurer may decide to increase your premiums or decline to renew your policy. It’s important to note that if the excluded driver does drive and has an accident, you, the insured, will be responsible for paying for all the damages/injuries out-of-pocket. That includes any damages/injuries that occur if they are driving someone else’s car too.

Adding someone to a homeowner’s policy

The homeowner’s policy is held by the person or people whose names are on the title/deed of the home.

• You may add your spouse as a named insured on your policy if they are on the title/deed. Depending upon your spouse’s claim history, note that this could raise your rate.
• If you’re not married but living together, and the non-married partner’s name is on the deed/title, you may add them as a named insured.
• You may want to adjust personal property coverage if your new spouse has items that increase the value above what is currently on your policy.
• You must be named on the policy to file a claim.

Removing someone from a homeowner’s policy

If you are the primary homeowner listed on the policy, you may remove someone from your policy. Traditionally, this happens during a separation or divorce. A homeowner’s policy can be maintained during a separation, but should be changed as soon as the divorce is finalized. At California Casualty, we typically wait until the divorce is final and/or the policy renewal date to move property policies from one account to another.

• Only a named insured on the policy is authorized to make changes. Ideally, the changes should follow the separation agreement.
• The effective date the change takes place depends upon your policy.
• The spouse who moves out, but is still on the deed, should be named as an additional insured.
• Your homeowner’s policy should be listed under whomever keeps the house.

Adding or removing someone to a renter’s policy

You’re often able to add coverage for a partner or roommate to your renter’s policy if they move in. There are three main ways to do this.

• You can add coverage for a roommate for an additional cost. You can do this on a homeowner’s and renter’s endorsement called “Other Member of Your Household.”  Some states do not charge a premium for this. You can remove this person at any time, with no notice given to them.
• Unless you are married, you cannot add a significant other as a named insured.
• You can ask the person to get their own policy. Separate policies mean each of you has the full amount of liability coverage if you cause a loss.

Having the right coverage gives you peace of mind. Make sure you are protecting your greatest investments.

This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.

Newlywed Checklist

by California Casualty | Auto Insurance Info, Finances, Homeowners Insurance Info | 0 comments

You had a checklist for the perfect wedding. Now that the big day is over, you’re ready for the next step: the “to do” list after the “I do’s.”

We’ve put together the definitive checklist so that you won’t miss a thing as you transition into married life. It’ll be a piece of cake – pun intended – after planning a wedding. Remember, you’ve got this.

1. Take care of the post-wedding details.

The wedding may be over, but there are likely some details that still need to be addressed. You’ll want to take care of them in a timely fashion, but most can wait until after the honeymoon.

• Returned rented clothing and items. Take your wedding dress to be cleaned, boxed, and preserved.
• Pay outstanding vendor bills. Many wedding vendors require payment on the day of your event, but for those who will bill you, make sure to pay them promptly.
• Order photos. Set aside several hours to review your photos and choose the top 20-30. Then create a flow that tells the story of the day from start to finish.
• Send thank you notes within 3 months of the wedding. Consider alternatives to handwritten notes, such as postcards with a photo of the wedding and a heartfelt sentiment.

2. Request your marriage certificate.

This is not to be confused with your marriage license, which is the legal document that allows you to get married. A marriage certificate is legal proof that you are married. It often has a raised seal.

• After the ceremony, it is the responsibility of your officiant to bring the marriage license to the county clerk so that a marriage certificate may be generated.
• Contact the county clerk’s office and order 3-5 certified copies. Note that there will be a charge for each one that you request.
• Arrange to have the copies mailed, or for you to pick them up.

3. Legally change your name (optional).

If you plan to change your name, there is a process to follow.

• You will need your marriage certificate to apply for a new social security card. That’s the first step in changing your name.
• Once you have a social security card, you can take that, your marriage certificate, and proof of address and visit the Department of Motor Vehicles for an updated driver’s license. You are now ready to use your new ID to update your name on your financial accounts. (See below.)
• You also may want to update your name on your social media accounts.

Pro Tip: If you don’t want to take the time to do it yourself, there are companies that provide name change services for a fee.

4. Alert your employer.

If you changed your name and/or your address, you want to alert your employer so that they have the correct information on file.

• Provide a copy of your new driver’s license to your employer, which will include your new name and/or address.
• Make sure your employer has updated bank deposit information for payroll, health insurance, and your 401K.
• Request new business cards and/or an updated email address.

5. Update your financial accounts.

Your financial accounts need to be updated if you changed your name and/or address. In addition, this is a good opportunity to take stock of your finances, create a budget, and how you will move forward as a married couple.

• Provide a copy of your marriage certificate, updated driver’s license, and proof of address to update the information at your bank.
• Do the same for any loans, such as car loans and mortgage providers, and for your credit cards.
• Set up a joint bank account if desired. Order checks with your married name and address.

6. Update or change your insurance.

Now that you’re married, you will want to update your homeowner’s or renter’s policy and auto insurance so you’re together on the same policy.

• Contact your insurance provider to update them on your new name, address, and marital status. You will need to do this even if you do not change your name.
• Determine what changes need to be made on your homeowner’s or renter’s and car insurance policies. If you had individual policies previously, you would want to cancel them and have a new policy written for both of you.
• You may qualify for discounts through bundling Don’t forget to ask about those.

7. Alert your service providers.

You’ll also want to update your service providers with your new name and address.

• Contact the utility providers for your home, including gas, electric, water, and Internet.
• Make a list of your doctors and other medical providers and alert them with new information, including updated health insurance if applicable.
• Update your memberships and subscriptions with any new information.

8. Notify the government.

You’ll want to make sure that your married name is listed with your local town and various government agencies.

• If you own your home, check with the town/county clerk, and make sure your married name is listed on the property deed. This should also put your correct name on property taxes and sewer bills.
• Update your name (and if needed, address) with the post office and with your state’s voter registration.
• File for a new government-issued passport in your married name so that you’ll be ready for your next adventure.

9. Merge your stuff.

You brought stuff to the marriage and so did your partner. Likely, you have duplicates. Now is a good time to decide what to keep and what to give away or sell. There are many Free Cycle and Buy Nothing Groups to donate right in your local community.

• Sell or donate your wedding dress, wedding décor, and any other wedding-related supplies that you no longer need.
• Go through your household items to look for duplicates. Decide to regift or sell.
• Return any unwanted wedding gifts within 2 months. You may use the credit with the store to buy the items you still need.

10. Make a newlywed bucket list.

The wedding may be over, but your adventures are just beginning. To help with the post-wedding blues, create your newlywed bucket list and start planning.

• Make a list of the things you’d like to do together. Then choose a few you’d like to try sooner rather than later.
• Remember that it doesn’t have to be costly. You just spent a lot on a wedding and honeymoon. Maybe it’s hosting your first dinner party as a married couple or trying out a new hobby together.
• Plan a one-year anniversary vacation. Follow these pro tips to save money when you travel. You’ll have a year to save for the trip, and it will be another wonderful celebration of your new life together.

This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.