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Frequently Asked Questions

Below are some of our frequently asked questions. If you have any other questions or concerns, please feel free to contact us.

  1. Why do insurers use insurance scores?
  2. How do I get coverage on the new car when your agency office is closed?
  3. Why do I have to carry so much insurance on my home?
  4. Should I purchase the Loss Damage Waiver offered by the rental agent when I rent a vehicle?
  5. I am taking my family on vacation this summer. We may travel to a foreign country. Will I need any special insurance to cover my personal property and liability?
  6. My son (daughter) is leaving home to attend college this fall. Will my auto and homeowners insurance policies cover him (her) while at college?
  7. My teenager just received a license to drive. Do I need to add him/her to my policy now? Will it increase my premium?
  8. What is an umbrella liability policy and why do I need one?
  9. If I have health insurance, why do I need Personal Injury Protection or Medical Payments coverage on my auto policy?
  10. Why does my credit rating affect how much my insurance costs?
  11. Why is my neighbor’s homeowners insurance premium less than mine?
  12. If I purchase collision insurance on all my vehicles, why do I need to purchase uninsured motorist property damage coverage?
Why do insurers use insurance scores?

Insurance companies use financial history, along with a host of other factors, to properly classify insureds according to their potential for future losses. Studies have shown a strong correlation between a consumer’s financial history and his or her future insurance loss potential. Thus, insurance companies believe the use of credit information helps them to underwrite and rate applicants at a cost that reflects their anticipated chance of loss. Insurance scores provide an objective tool that insurers use along with other applicant information to better predict the likelihood of a consumer filing claims. Scores also help to streamline the decision making process, so that policies can be issued more efficiently. By accurately predicting the likelihood of future claims, insurers can better control their risk, thus enabling them to offer insurance coverage to more consumers at a fair cost most specific to that consumer’s exposure.

What information is contained in an insurance score? An insurance score considers primarily:

  • Payment history
  • Bankruptcies, liens and judgments
  • Collections
  • New applications for credit
  • Amount of outstanding debt
  • Length of credit history

What is an insurance score? How does it differ from a financial credit score? In order to correlate insurance score to claims activity, an applicant’s insurance score is compared to the performance of a group of consumers with profiles similar to the applicant’s profile. A mathematical formula, or algorithm, assigns various weights to factors in the credit report in order to produce an insurance score, which is then used to determine eligibility for insurance or the appropriate price. The score predicts the likelihood of certain events occurring in the future. The main difference between an insurance score and a credit score is that insurance scores only look at certain variables of a credit report that have historically been more indicative of future insurance loss potential. Insurance scores also do not take into account a consumer’s income. Unlike a mortgage company, an insurance company is not assessing a customer’s credit-worthiness and therefore doesn’t consider income. Instead, an insurance company only considers those items on a credit report that are predictive of the potential for future loss. Research has shown that people who manage their credit well and pay their bills on time are more likely to be safer drivers or take better care of their home and therefore will have fewer losses. Insurers look at long-term patterns and overall responsible use of credit when determining an individual’s insurance score.

What variables are used in calculating an insurance score? Variables that are primarily used in calculating an insurance score include: outstanding debt, length of credit history, late payments, new applications for credit, types of credit used, payment patterns, available credit, public record, and past due amounts. A credit report typically contains both positive and negative information.

What variables are NOT used in calculating an insurance score? Race, color, religion, national origin, gender, marital status, sexual orientation, age, address, salary, disability, occupation, title, employer, date employed and employment history are NOT used for scoring purposes. Inquiries made for account reviews, promotions or insurance purposes are not used in calculating an insurance score. Insurers look at long-term patterns and overall responsible use of credit.



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How do I get coverage on the new car when your agency office is closed?

Insuring a New Automobile: I am thinking about buying a car over the weekend.

That’s an excellent question, and it’s a question that our customers ask frequently.

Auto dealers make it very easy to buy a new car these days. New car buyers usually need to provide only an ID card showing proof of liability insurance and off they go. This practice makes it easy for the dealer and the buyer to overlook proper insurance coverage on the new vehicle. The same thing is true if you intend to purchase a vehicle from a private seller.

Unfortunately, the only way to be sure you have exactly the coverage you need on a newly purchased vehicle is to call your agent before you drive away from the dealership. That of course is not always possible. Fortunately, all policies provide some automatic coverage on newly acquired vehicles, but not all policies provide the same automatic coverage.

The first important point to know is that your policy provides coverage only on new vehicles purchased or acquired by the person who is named on the policy – the “named insured” – and the spouse of that person if he or she resides in the same household. If you are going to acquire a new vehicle for one of your children or another relative, and intend to issue the title in that person’s name, there is no automatic coverage on your policy. If that is the case, you definitely need to contact your agent before driving the new vehicle away from the dealership or the private seller’s location.

In addition to the ownership requirement, automatic coverage applies only to certain types of vehicles. Cars are covered, as are pickups, vans and SUVs with a GVW (gross vehicle weight) of less than 10,000 pounds, as long as they are not used for transportation of goods in a business. (Some policies will cover new pickups, vans and SUVs up to 25,000 pounds.)

Once you are OK with the ownership and size and use requirements, it’s important to know that not all policies automatically provide “full coverage” on newly acquired vehicles. The coverage you get may depend on whether or not you are trading in one of your current vehicles for the new vehicle at the time of the sale. One auto insurance policy sold in Texas only provides the coverage you currently have on the traded vehicle. If the traded vehicle is a “clunker” covered only for liability, then liability is all you will get on the newly acquired vehicle, even if it’s a brand-new car. Other policies sold in Texas provide comprehensive and collision on newly acquired vehicles even if none of the other vehicles on the current policy carry that coverage.

Even if a policy provides “full coverage” on a newly acquired vehicle, the automatic coverage only lasts for a few days – as long as 30 days on some policies but as short as 4 days on others. You must call your agent before that period ends in order to finalize the details.

As you can see, there are big differences between policies sold in Texas with regard to automatic coverage on a newly acquired vehicle.

If you are going to shop for a new vehicle, call your agent before you go. Your agent can review your policy and ask a few questions. Then he or she can tell you if it’s OK to drive the new vehicle away from the dealership or private seller’s location without calling first to give details about the purchase. Be sure to call your agent on the first business day after your purchase, so the final details on the coverage can be arranged.

If your agent says you need to call first, be sure call back as soon as you are ready and then wait until he or she confirms that coverage has been purchased before you take possession of the new vehicle.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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Why do I have to carry so much insurance on my home?

Replacement Cost – Homeowners and Dwelling Policies

This is a great question, and one that our customers ask frequently.

For one thing, we believe you should have an amount of insurance that is sufficient to rebuild your home – probably your largest investment – in the event it is totally destroyed by a fire or tornado.

In addition, your policy contains what is called an insurance-to-value provision. This is essentially an agreement between you and the insurance company. In exchange for your agreement to insure your home for at least a specified percentage of its replacement value, the company agrees to issue the policy for a lower premium than it would charge for a policy without this provision. After a loss – even a small loss – if the amount of insurance on your home isn’t sufficient to satisfy your part of the agreement, then the insurance company can reduce the amount it would normally pay.

While it is your responsibility to establish the value of your property and select the amount of insurance for your policy, we can help with that decision and explain what you can do to avoid a loss penalty.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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Should I purchase the Loss Damage Waiver offered by the rental agent when I rent a vehicle?

Rental Car Coverage

This is a great question, and one that our customers ask frequently.  Whether you rent a vehicle for personal use while on vacation, or as a substitute while your vehicle is out of commission for repair or service, or for business use while out of town, there comes that time when you’re standing at the rental car counter and the agent asks the inevitable question:  “Do you want to buy our loss damage waiver (or our insurance coverage)?”

Most loss damage waiver (LDW) fees are outrageous.  Sometimes they cost more than the daily rental fee itself.  But are they worth the additional cost?  The answer may depend on your tolerance for risk and inconvenience.  You must decide if the extra cost is reasonable, considering the potential for an uninsured loss should something happen to the vehicle during the term of the rental contract, and the resulting inconvenience of dealing with the rental company and your insurance company to satisfy the rental company’s demands.

First, you should know that the LDW is not actually an insurance policy.  It is a waiver of the rental company’s requirement in the rental contract that you bring the vehicle back in the same condition as when it left their lot.  Most rental contracts make you responsible for any damage to the vehicle, including theft and weather-related damage.  When you purchase the LDW, the rental company is removing that provision from the contract on a conditional basis. 

If you don’t purchase the LDW and the vehicle is damaged, here are some of the costs for which you could be held responsible under the rental contract:

  1. Cost to repair damage to the vehicle, or the full value of the vehicle if it is a total loss
  1. “Diminished value” of the vehicle – the difference between what the vehicle was worth before the accident and what it is worth after repairs have been made
  1. “Loss of use” – the amount of money the rental company loses on rental fees while the vehicle is out of service for repair or replacement
  1. Administrative or loss-related expenses incurred by the rental company, such as fees for towing, appraisal, and claims adjustment, plus general office expenses for handling the paperwork

Whether all or any of these costs are covered by your personal auto policy depends on several factors.  One big factor is the type of personal auto policy you have purchased.  Insurance companies sell different policies in Texas and the coverage and exclusions are not the same from one company to the next.  Some companies sell a policy that covers damage to the rented vehicle in the liability section of the policy, while others sell a policy that covers damage to the rented vehicle in the physical damage section.  Each type of policy is discussed separately below. 

We encourage you to ask your agent which type of policy you have, because as you will see, the differences are significant.

Reasons to purchase the Loss Damage Waiver when you have a policy that covers damage to the rental vehicle in the liability section:

1.  Your limit of liability may not be sufficient to satisfy the rental company’s demands.

Coverage for damage to the rental car and related costs are provided by the property damage liability section of your personal auto policy.  If the property damage limit of liability is not sufficient to cover the value of the vehicle you rent, plus pay for any other costs the rental company demands, you will be personally responsible for the costs that exceed what your insurance company has to pay.

2.  Your policy may exclude rented pickups and vans used for business purposes.

If you rent a pickup or van for business purposes, your personal auto policy may not provide coverage at all.  Some insurance companies consider an SUV to be a pickup or van, and may therefore not cover any damages arising out of the use of an SUV rented for business purposes.

3.  Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory.  If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

4.  Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company. 

5.  You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away.  When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

Reasons to purchase the Loss Damage Waiver when you have policy that covers damage to the rental vehicle in the physical damage section:

1.  Your policy may not cover damage to the rental vehicle at all.

Coverage for damage to the rental vehicle and related costs are provided by the physical damage section of your personal auto policy – IF your policy provides physical damage coverage on at least one of your covered vehicles.

2.  Your insurance company may not pay the entire amount demanded by the rental company.

When your policy provides physical damage coverage on one of your covered vehicles, the policy covers damage to a rented vehicle.  The amount payable by the insurance company is the lesser of the “actual cash value” of the vehicle or the amount “necessary” to repair or replace the vehicle, minus your deductible.  In addition, the policy covers “loss of use” with a daily limit (usually as low as $20 per day) and a maximum limit (usually $600), and there is usually a 1- or 2-day waiting period before the policy will begin to pay these expenses.  Because of all these limitations, you may become personally responsible for:

  1. The amount demanded by the rental company to repair or replace the vehicle in excess of “actual cash value” or the amount “necessary” to repair or replace;
  2. The amount of your deductible;
  3. The amount demanded by the rental company for “loss of use” in excess of the daily and maximum limits payable by your insurance company;
  4. The amount demanded by the rental company for “diminished value” of the vehicle, even after the repairs are complete;
  5. The amount demanded by the rental company for administrative or other loss-related expenses.

3.  Your policy may exclude some electronic equipment.

Your policy may exclude loss to some electronic equipment that receives or transmits audio, visual or data signals.  If you rent a vehicle equipped with a GPS receiver, for example, your policy may not cover it.

4.  Your premium may go up or your policy may not be renewed if you have an at-fault accident.

You are driving an unfamiliar vehicle in unfamiliar territory.  If you have an at-fault accident while driving the rented vehicle, your insurance company may hold it against you – with a premium surcharge or perhaps even non-renewal.

5.  Your line of credit may be adversely affected.

If you don’t buy the LDW, the rental company will probably ring up an estimated damage amount on your credit card, pending notification to and settlement by your insurance company. 

6.  You may suffer a huge inconvenience.

When you have purchased the LDW, you can bring a damaged vehicle back to the rental company, throw the keys on the counter, and walk away.  When you haven’t purchased the LDW, you may have to spend a significant amount of time dealing with the rental company and your insurance company.

Bottom Line

We recommend that you buy the Loss Damage Waiver from the rental company.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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I am taking my family on vacation this summer. We may travel to a foreign country. Will I need any special insurance to cover my personal property and liability?

Taking Insurance on Vacation - Homeowners and Personal Auto Policies

This is a great question, and one that our customers ask frequently. 

Vacations -whether taken in the summer or the winter -can pose unusual risks you don’t encounter every day, especially when you travel out of the country.

If your fishing skills are a little rusty and you injure a fellow fisherman, or if one of the kids starts a fire in a hotel room, will your homeowners insurance respond and pay the claim or defend a lawsuit? What if you participate in different recreational activities while on vacation, like golfing, boating, jet skiing, biking, snowmobiling, or hang-gliding? Will you be renting a golf cart or snowmobile, or maybe a moped, 3-wheeler, and 4-wheeler? All of these activities can be fun, but they can also be dangerous. Will one of your policies respond if you hurt someone or damage property belonging to others while participating in these activities?

One of your current policies may provide coverage for some of these activities, but unfortunately, there is no policy that will provide coverage for all of these activities.  

Automobile Risks. The typical auto policy covers auto accidents and losses in any U.S. state, territory or possession, and Puerto Rico and Canada. In fact, the liability limits under your auto policy may actually change as you cross state lines or enter Canada, in order to meet financial responsibility or compulsory insurance laws requiring certain minimum limits and coverages for automobiles operated in that jurisdiction.

It’s a different story, however, if you travel to Mexico or a foreign country other than Canada or Puerto Rico. Your policy does not provide adequate coverage for accidents in those countries. (Your policy may extend some coverage to accidents in Mexico, but the coverage is very limited and you shouldn’t count on it providing adequate protection for your family.) If you don’t plan to rent a car while vacationing in a foreign country, but may be using some form of public transportation such as buses and taxis, consider buying special trip insurance to cover medical and other expenses that may result from an accident -see Trip Insurance below. 

If you rent a car while vacationing in the U.S., your auto policy provides limited coverage for damage to the rent car and other claims arising out of the operation of the rent car. However, we recommend you purchase the damage waiver offered by the rental company for complete protection. (We have a separate report available on rental car exposures. Please ask and we’ll send it to you.) 

If you rent a car in a foreign country, you will definitely need special coverage. Ask the rental company what they offer, and see Trip Insurance below.

Recreational Vehicle and Watercraft Risks. If you rent any kind of recreational vehicle or watercraft on your vacation, your auto or homeowners policy may not cover damage to the rented vehicle or watercraft, or injury to others or damage to property owned by others. To be safe, we recommend you ask the rental company if a damage waiver and liability insurance is available for an additional charge. 

Personal Property. Your homeowners policy covers property you take on vacation anywhere in the world, but the amount of coverage on property away from home may be lower than the limit shown on your policy. In addition, most policies won’t cover unusual types of losses you might encounter on vacation. For example, there may be no coverage if a monkey at the wild animal park or a bear at the campground shreds luggage or other personal belongings. Also keep in mind the policy may contain very small limits of coverage for money and jewelry, so take special precautions if you carry more cash and jewelry on vacation than you would usually carry at home.

Your policy covers theft, but you must report the theft to local authorities. Obtain a copy of the police report before leaving the area, especially if the loss occurs in a foreign country.

Liability Risks.  The liability section of your homeowners policy applies to accidents anywhere in the world, but all policies contain exclusions related to certain activities like the recreational vehicle and watercraft activities mentioned above. For the typical liability risks, however, like injuring someone while fishing, or setting the hotel room on fire, your homeowners policy will pay claims or defend lawsuits in the U.S. or any foreign country. If you don’t already have a personal umbrella policy, ask us about this. These policies provide high limits of liability over and above your auto and homeowners policies, and may also cover unusual exposures not covered by those policies.

Trip Insurance. Trip Insurance covers canceled or interrupted trips, as well as emergency medical coverage and rental car coverage for U.S. citizens traveling abroad. It typically comes in a package that covers these and other exposures, although it can be purchased to cover a single exposure. Package policies are the most common and once were sold primarily by travel agents. However, with growing numbers of travelers making travel plans themselves on the Internet, web sites offering Trip Insurance are flourishing. For an example of one of these sites, take at look at insuremytrip.com

Vacation Time is Insurance Check-Up Time

Contact our agency for a review of your policies before you go on vacation. This is an excellent time to consider purchasing those higher limits and broader coverages we’ve been telling you about.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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My son (daughter) is leaving home to attend college this fall. Will my auto and homeowners insurance policies cover him (her) while at college?

Taking Insurance to College

This is a great question, and one that our customers ask frequently. 

When college students move from home to their home-away-from-home - a rented dorm or apartment – insurance issues can arise and should be addressed before they leave home.

One key question that arises in discussing these issues is whether the student is still considered a resident of your household. This is a legal question, but your homeowners and auto policies both contain provisions that apply the broadest coverage available in those policies to persons who are legally considered residents of your household.

It is generally accepted that students living away from home while attending college are residents of their parents' household. Based on previous Texas court decisions, the real test is whether the absence of a person from the household is intended to be permanent or only temporary - whether there is physical absence coupled with intent not to return. This leaves a great deal of room for interpretation. There may be borderline cases that require you to think about alternatives. For example, it may be difficult to consider a 23-year-old graduate student living in an apartment year-round to be a resident of your household.

Homeowners Policy
Your homeowners policy covers personal property owned or used by a resident of your household while the property is located anywhere in the world.

However, most policies limit the amount of coverage on personal property to 10 percent of the amount shown on the policy for personal property, when the property is located at another residence away from the home address. 

Look at your policy and find the limit provided for personal property. Take 10 percent of that amount, and then think about the items your student has taken to college: clothes, TV, computer, other electronics, furniture, and household items. How much would it cost to replace all those items if they were all lost at the same time in a fire or other catastrophe? 

In addition to the dollar limitation, some policies don’t cover theft of personal property from the student's residence, except while the student is temporarily living there. This is a definite problem, especially when the apartment is owned, or rented for a 12-month term, and the student comes home for the summer.

Your homeowners policy also provides liability coverage in case a family member is legally liable for another person’s injury or damage to another person’s property. This coverage clearly applies to accidents at home or away from home, but some policies limit the coverage when an accident occurs at an owned or rented residence other than the family home. Some insurance companies offer liability coverage at separate residences for an additional cost.

After all of the above information is considered, it's easy to see there are potential coverage gaps in your homeowners policy when a student leaves home for college. That’s why we recommend that you purchase a separate tenant or renter’s homeowners policy for the student's residence, whether it is an apartment or a dorm room. The cost of such a policy is small compared to the benefits it provides. 

Automobile Policy

If your student takes one of your family vehicles to college, the coverage provided by your family automobile policy follows the vehicle anywhere in the United States and Canada. This includes coverage for damage to the vehicle itself (if you have purchased such coverage on that vehicle) as well as liability coverage for injury or damage to other persons or property.

If your student doesn’t take a vehicle to college, some coverage under your policy may still apply if they are riding in or even driving a vehicle belonging to someone else.

Students Who Are Not Legal Residents of Your Household

Coverage complications can arise on your homeowners or auto policy if your student for whatever reason is not considered a legal resident of your household, as was mentioned in the first part of this article. We encourage you to discuss your personal situation with us and your attorney. To be safe, we will likely recommend separate homeowners and auto policies for the student. 

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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My teenager just received a license to drive. Do I need to add him/her to my policy now? Will it increase my premium?

When Your Teenager Starts to Drive

These are great questions that our customers ask frequently.

The short answers are “yes” and “yes.”

Most personal auto policies written in Texas extend liability coverage to anyone using a covered auto with your permission, including children when they begin to drive. However, some policies exclude family members who have not been reported to the insurance company and are not listed as drivers on the policy.

Failing to report your newly-licensed teenager is a dangerous game to play with your family assets. In fact, some companies may consider this to be “insurance fraud” and refuse to pay a claim involving a young driver who has not been reported – especially if the youngster had a license when the policy was first purchased.

Insurance companies expect you to report all drivers in the household and will charge a premium based on the appropriate driver classification. In the case of a youthful operator, that premium will depend on whether the driver is the principal operator of a family vehicle or just a part-time operator.

Be sure to discuss your family’s insurance needs with your insurance agent. After considering your specific circumstances, you and your agent can make a decision regarding auto insurance that is appropriate for your family and your insurance budget.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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What is an umbrella liability policy and why do I need one?

Personal Umbrella Liability Insurance

That’s an excellent question and one that our customers frequently ask.

An umbrella liability policy is a relatively inexpensive way to purchase higher liability limits for you and your family, above and beyond the limits provided in homeowners and auto liability policies. In addition, most umbrella policies provide coverage for liability claims not covered by other policies, subject to a small self-insured retention. Umbrella policies got their name because they provide excess limits in increments of $1 million above more than one underlying policy. Any individual or couple seriously concerned about protecting family assets and earning power should consider an umbrella policy. Accidental tragedies resulting in multi-million dollar lawsuits are far too common to rely solely on basic policies.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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If I have health insurance, why do I need Personal Injury Protection or Medical Payments coverage on my auto policy?

Personal Injury and Medical Payments – Personal Auto Policy

This is a great question, and one that our customers ask frequently.

Personal Injury Protection (PIP) coverage provides payment for medical bills, funeral expenses, lost wages or replacement services (for homemakers) if you or a member of your family are injured in an auto accident. This coverage also applies to passengers in your vehicle, who may or may not have health insurance.

It's a broad "no-fault" coverage that will pay, even if others pay, allowing in some cases to double-dip for expenses. It has very few exclusions.

Medical Payments coverage is like PIP in that it reimburses covered persons for their medical expenses up to the policy limit. But that’s where the similarities stop. Medical Payments coverage does nothing to reimburse the injured person for lost wages or replacement services. And, unlike PIP, it coordinates with insurance that may be provided by another auto policy or coverage, thus preventing double dipping.

Either coverage can be used to cover deductibles and co-pays under a health insurance plan.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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Why does my credit rating affect how much my insurance costs?

Credit Rating – Homeowners and Personal Auto Policies

This is a great question, and one that our customers ask frequently.

There have been a number of studies in Texas and other states that have shown a direct relationship between credit and claims. The state of Texas allows credit as a rating factor because the impact of credit can be proven like other factors including prior claims, driving experience or the age of a home.

For example, we know that more young drivers will have accidents than experienced drivers. Even though not every young driver will have an accident, they all pay more for insurance. And everyone else pays less. The same is true when credit ratings are used to develop premium for auto and homeowners policies. Those with good credit ratings typically pay less for their policies.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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Why is my neighbor’s homeowners insurance premium less than mine?

Premium – Homeowners Policy

Homeowners policies are like cars. There are different types with different options. And all of those options affect the premium. Your neighbor may have chosen a higher deductible, or chosen to buy a policy that does not provide as much coverage, or chosen to buy a lower amount of insurance.

There are other factors that affect the premium as well. Without reviewing your neighbor's policy it is hard to tell whether they purchased a “Chevrolet” or a “Cadillac”.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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If I purchase collision insurance on all my vehicles, why do I need to purchase uninsured motorist property damage coverage?

That’s an excellent question, and one that is frequently asked by our customers. Uninsured motorist property damage coverage is expensive, especially when you have several vehicles covered on your personal auto policy.

First, let’s take a look at your collision coverage to see exactly what’s covered there. Collision insurance covers direct and accidental loss to your vehicle when it collides with another vehicle or object, or when the vehicle overturns without involvement with another vehicle or object. This coverage applies no matter who is at fault.

A total loss on your vehicle is generally going to be paid on a market value basis, meaning the price a willing purchaser would pay for the vehicle prior to the loss. Damage that doesn’t result in a total loss is repaired or replaced with parts of like kind and quality. If the damage to the vehicle can be repaired, your vehicle may be worth less after the repairs are made than it was worth prior to the accident. This is called “diminished value” and your collision insurance doesn’t cover it.

The expense to rent another vehicle while yours is in the shop for repair is not covered by collision insurance, although many policies cover this expense with a separate coverage. The typical limit for this coverage, however, is only $20 per day for up to 30 days. Electronic equipment installed in the vehicle is covered, but some policies only pay up to $1,000 for such equipment. Collision insurance does not cover any personal items in or on your vehicle that might be damaged, such as a laptop computer. And finally, some policies do not cover or limit the amount you can be paid for custom furnishings or equipment in or on your vehicle.

Uninsured motorist coverage is designed to put your policy in the place of another person’s liability insurance when that person has no insurance, or when the limits of liability carried by that person are insufficient to cover the amount of your loss. In addition, it pays if you are hit by a vehicle that drives away from the scene of the accident and can’t be identified. Just from the standpoint of the chance of such a loss occurring, uninsured motorist coverage is an important part of your protection, because it is estimated that almost 25 percent of Texas drivers don’t carry auto liability insurance. Many persons who do purchase liability insurance only carry the minimum limits required by state law. For property damage liability, the required amount is now $25,000.

Uninsured motorist property damage coverage pays for damage to your vehicle caused by an uninsured, underinsured or hit-and-run motorist. It pays up to the limit you have purchased, so obviously you want to be sure to carry a limit that will cover a total loss of your vehicle. But you should carry a higher limit for some of the reasons listed below.

Here are the top reasons you should purchase uninsured motorist property damage coverage:

  1. There is no daily or total limit on what you can be paid to rent another vehicle while your vehicle is being repaired. If you own a premium automobile, you will be paid what it costs to rent a premium automobile.
  2. There is no limit on what you can be paid for damage to electronic equipment installed in your vehicle or to custom furnishings or equipment in or on your vehicle.
  3. The coverage pays for damage to personal items in or on your vehicle.
  4. The coverage may pay for the “diminished value” of your vehicle after repairs are made.

For these reasons and more, we recommend that you purchase uninsured motorist property damage coverage even when you carry collision insurance on all your vehicles. Contact your agent if you have any questions about this or any other aspect of your personal auto insurance.

This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,800 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.



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Leopold Insurance Agency    |    Hallettsville: 361-798-4311    |    Victoria: 361-570-5214    |    Toll Free: 800-839-3864