Click on a question below to learn more:

1. Do I always need to buy insurance when I rent a car?

2. What happens when I loan my car to someone?

3. What actually happens when I report an accident?

4. How does the company decide how much my property is worth?

5. Does my policy cover my possessions even when I'm on vacation?

6. I work out of my home. Do I need special coverage?

7. What do I do when my property is damaged or stolen?

8. I am a renter, not a homeowner. Do I need insurance?

9. What should I look for in an agent?

10. What steps can I take to reduce my rates?

1. Do I always need to buy insurance when I rent a car?

If you have fully insured your own vehicle, including collision and comprehensive coverage, and rent a vehicle for pleasure only, you may not need to buy extra insurance from the rental company. However, if you have an accident, you may not be covered for the loss-of-use of the vehicle while it is being repaired. This cost could get quite expensive, therefore, it may be best to make sure to get their insurance. Check with your agent for details.

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2. What happens when I loan my car to someone?

Liability and physical damage coverage always follow your car. For coverage to apply to another driver, you must give permission to the person driving the vehicle. So, if a friend borrows your car with permission 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 are supplemental.

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.

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3. What actually happens when I report an accident?

After an accident, you should call your agent as quickly as possible to help you complete a claim form, determine what exactly happened, and evaluate any damages or injuries. Your agent then will contact your insurer. While compensating you for auto repairs or medical expenses is easy and immediate - determining liability is more complicated. The adjuster will begin the settlement process, the length of which will depend on the cooperation of the other party.

The amount of compensation for your loss can vary according to the adjuster's analysis of the damage. You do not have to accept the first amount of money you are offered, if it is lower than the cost of your repair or recovery. While you may have to do some homework to prove your reported loss is valid, it's worth it to be certain your insurer lives up to the provisions of your policy.

Remember, negotiation with an adjuster is just business - insurers simply want to settle claims fairly in light of possible fraud. While it is our insurer's responsibility to root out false claims - you pay the price in the end for fraud. In fact, you spend nearly a dime on every dollar of your premium to cover the false claims of others. So, try to keep an open mind when working with your adjuster to settle on the price that's fair to both you and your insurer.

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4. How does the company decide how much my property is worth?

The common methods are:

Actual Cash Value - The replacement cost of the item minus depreciation. For example, a new television set may cost $500. But if your 7 year old TV set gets damaged in a fire, it might have depreciated 50 percent prior to the damage. Therefore, you would be paid $250 for that set. Do not forget the deductible applies to the first dollar.

Replacement Coverage - The cost of replacing an item without deducting for depreciation. Today's cost for a TV set with features similar to the 7 year old one damage by fire would determine the amount of compensation. If it still costs $500 today, that would be the replacement coverage. Again, do not forget about the deductible.

Replacement value should not be confused with market value. The market value is what your house would actually sell for. The replacement value does not include the land - which almost always does not need to be replaced.

Check your policy. If you prefer replacement coverage and do not already have it, this coverage can be added to your policy. Your agent can advise you of the costs and benefits.

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5. Does my policy cover my possessions even when I'm on vacation?

Yes. Homeowners insurance is a package of insurance coverage that extends to all your possessions no matter where they are. If you take a round-the-world vacation and lose a valuable item, as long as the loss is by a covered event of peril, the location does not matter, you're covered. The liability component also extends well beyond the boundaries of your home. Should you be found legally at fault for injury or loss to another individual, whether you unfortunately and unintentionally cause a tumble down a San Francisco hill or a fall in an Indiana barn, for example, your homeowners policy likely will cover you.

As in the property section of a homeowners policy, there are limits and exclusions to personal liability. Your business activities, for example, are not covered under your homeowners policy. You also are not covered for injuries or damage you purposely cause. Your policy lists specific exclusions and limits.

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6. I work out of my home. Do I need special coverage?

Whether your home business is your primary occupation or a hobby that nets you a few hundred dollars a year, it is still a business and should be treated as such. If you've invested quite a bit in equipment and sell the occasional object, you should consider whether the business personal property limits on your homeowners policy are sufficient. Also, keep in mind that the personal liability protection in your homeowners policy does not extend to business liability. Check with your agent concerning your business insurance needs.

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7. What do I do when my property is damaged or stolen?

Contact your agent as soon as possible.

If there is damage to your home or possessions, make "emergency" repairs to protect yourself and your property from further damage. For example, if some of the windows in your home have been blown out by wind, you may board them up to prevent additional damage. In fact, your policy covers the cost of these emergency measures. However, before making permanent repairs, call your agent. The insurance company has the right to inspect the property in its damaged condition. They may want to send a claims adjuster or have you get an estimate from an independent contractor.

If your property is stolen, notify the police immediately and call your agent.

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8. I am a renter, not a homeowner. Do I need insurance?

Yes. The same rule of thumb that applies to homeowners applies to renters. If catastrophe struck tomorrow, could you afford to replace everything you own? Or if you were sued, would you have enough money to pay legal fees and possibly settle the suit? If not, chances are you would benefit from the protection that renters insurance brings. Renters insurance offers the same general personal property coverage and liability protection as a homeowners policy. Thus, your camera would be insured while you are on vacation, you would be covered if your sofa were to crash through the wall of your apartment lobby leaving a gaping hole, or if you were held liable for causing a fire that damaged the entire building. In fact, most policies are surprisingly extensive and may include additional living expenses if you are forced by fire or other damage to live elsewhere.

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9. What should I look for in an agent?

Agents are there to help you. At the most basic level, any agent should be able to answer all of your questions or be able to get the answer for you, provide you a thorough assessment of your insurance needs, and offer you a choice of insurance products to meet those needs. Also, any insurance agency should provide you with prompt, quality service in the case of a claim.

Just as important is the level of professional confidence and personal comfort you feel with the agent. Many people stick with the same insurance agent for decades, even generations. It helps to find an agent you can get to know and trust.

An important, but sometimes overlooked, factor to keep in mind is that there are two kinds of insurance agents: those who represent only one insurance company and those who represent more than one insurance company. Agents offering through their agencies only the policies of one insurance company often are referred to as "captive agents", because the company they represent does not allow them to offer their customers competitive alternatives. By contrast, agents offering through their agencies the policies of more than one insurance company are called "independent agents", because they can shop around for their customers for the best insurance values among a variety of competing companies.

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10. What steps can I take to reduce my rates?

Insurance companies often discount their rates in order to encourage good driving practices and the use of safety and security precautions. Depending on the company, you can often lower your rates from 5 to 35 percent.

Sometimes the investment you make in your property, such as anti-lock brakes or a home security system, will not only keep you safe and give you peace of mind, but may get you discounts on your insurance.

Increasing the deductibles on both home or auto, is also an easy way in which you could reduce the premium.

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