General Insurance Information

Auto Insurance: Frequently asked questions

Do red vehicles cost more to insure than other vehicles?

No. Your insurance company does not consider the color of your vehicle when calculating your insurance premium. Factors that insurers consider include your age, the kind of vehicle you drive, your claims history, and your driving record.

What is an SR-22?

SR-22 is a form that shows that you have auto insurance. It is required by the state for drivers who are high risk. Here are some of the reasons a state might require you to file an SR-22 form:

DUI (drunk driving) serious moving violations such as reckless driving racking up a lot of highway points in a short period of time being pegged as a habitual traffic offender causing an accident while uninsured.

Regulations vary from state to state, but high-risk drivers usually have to carry SR-22 insurance for three years. To find out more about regulations specific to your state, choose your state from the pull-down menu above.

More insurance companies are now willing to sell policies to drivers who have SR-22 status; however, those policies are going to be more costly than a standard auto policy.

I recently moved to the United States from a foreign country, and I had an excellent driving record in that country. Why are my auto insurance rates so high?

While auto insurers can use a number of factors to determine your premium, including your age, where you live, and how many miles you drive each year, one of the biggest factors they use is your driving record. Since you do not have a driving record in the U.S., your premiums will be high because the insurance company has no record of how you drive here.

You will have to drive in the U.S. for a few years to establish a driving record. Once you establish a safe record, your rates will go down.

Which coverages pay for damages to my vehicle?

Depending on what kind of damage your car suffers, one of your physical damage coverages comprehensive or collision insurance will pay for the damages.

If your car is hit by a deer or other animal, stolen, catches on fire, or is vandalized, your comprehensive coverage will kick in. If you crash into something and crunch your car, your collision coverage will kick in.

Both of these coverages are optional and, of course, adding them to your policy will raise your insurance premium.

What should I do if I just had an auto accident?

You should inform your insurance company right away. Make sure you’ve gotten a copy of the police report and the other party’s (or parties’) insurance information. Remember, just because you inform your insurer of an accident doesn’t mean you’re making a claim.

How do you reduce the cost of collision coverage?

You can do one of two things: raise your deductible or drop your coverage. The deductible is what you pay out of your own pocket before your insurance policy kicks in. The higher the deductible, the lower your premium. For example, increasing your deductible from $200 to $500 on collision coverage could reduce your premium by as much as 30 percent, according to the Insurance Information Institute.

Collision coverage is generally not worth purchasing on older vehicles with high mileage because if you ever file a claim for significant damages, your insurance company will likely declare your vehicle a total loss rather than fix it. That’s because the cost of fixing your vehicle far exceeds its market value. The value you get for the vehicle in the total loss may not justify the premiums you pay for the collision coverage.

Home Insurance: Frequently asked questions

I have a dog that bit someone once. Will that affect my chances of getting homeowners insurance?

While having a dog with a history of biting doesn’t automatically disqualify you from getting a homeowners policy, it can make it more difficult. You might end up having to get a policy that excludes coverage for anything your dog does.

If a tree falls on my house from my neighbor’s yard, who pays for the damage?

Generally the insurance responsibility lies with whoever’s property is damaged. In other words, if a tree falls on your home, no matter where the tree came from, your insurance company should pay for your home repair.

An exception would be if the damage occurred as a result of negligence; for instance, if the tree was dead before it fell, and you had proof that your neighbor knew the tree was dead. Under those circumstances, the damage becomes your neighbor’s liability.

As a rule, state insurance officials suggest that you file a claim with your insurance company and let them deal with it.

Life Insurance & Annuities: Frequently asked questions

If I’m a beneficiary, do I have to pay income taxes on a death benefit?

No. Death benefits from life insurance policies are free of income tax. However, the death benefit may be subject to estate and inheritance tax. It is subject to estate tax if the value of the insured’s estate including the death benefit is more than $650,000. Inheritance taxes vary by state.

What happens if I surrender my annuity?

Surrendering an annuity, particularly during the policy’s first five to seven years, will result in surrender fees. Check your policy on exactly how much those fees will be. There could possibly be other charges involved, too, including a 10 percent penalty for early withdrawal.

Read the fine print in your policy. It should tell you how much it’ll cost you to get out of your annuity.