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Insurance Frequently Asked Questions
Q1. Can I purchase insurance to pay off my home in the event of my death and can it be added to my existing policy?
Answer: The answer is yes and no.
Yes you can purchase insurance to pay off your home in the event of your death.
No it can not be added to your existing homeowners policy.
Homeowner's insurance is in the Property & Casualty realm of insurance where we insure against the loss of inanimate objects... home, furniture, car, boat, etc. Insurance that pays in the event of a person's death falls under the auspices of Life Insurance. There are, quite understandably, different guidelines.
What we recommend, in general, is to consider a Life policy with a face amount equal to (or better than) your mortgage. We do not recommend the so called "decreasing life" policy that decreases as your mortgage decreases over time because time has a way of changing your situation and you don't want to "lock in" to something that isn't what you need say 10 years down the road. Here's an example: if your mortgage is $250,000; you could purchase a 20 or 25 or 30 year term life policy with a face value of $250,000. If you died 15 years later, the mortgage would be less than $250,000 but your beneficiary would get the whole amount and could not only pay off the mortgage, but would also have some extra for final expenses, which are often ignored.
There are, of course, many other options open to you. You need a sit-down appointment with the Life agent here in our office. His name is Robert Johnson. He can be reached at 702-547-1900 ext. 103 or by e-mail at robertj@sageinsurance.com . Insurance protection is a serious matter to consider and you need knowledgeable people to help you wade through the different options you might have. The variables are many as are the choices you have. Make an appointment and come in and talk to Robert. The appointment is free and the knowledge you gain might be priceless.
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Q2. I assume that Sage does not have a carrier for home warranty insurance. Do you have any companies that you recommend for this type of coverage?
I enjoy reading your newsletters and appreciate the information.
Answer: First, I must apologize for the length of time it took to answer this question. Please forgive me. Now to the answer.
No, we do not have a home warranty company. But it is a misnomer to think of home warranty protection as insurance even though there is a similarity in the mind of the consumer. Insurance is designed to cover losses that are unexpected (like fire, windstorm, theft, etc.). Home warranties are designed to cover losses that you would eventually expect to happen (like an A/C unit fails, or a refrigerator breaks, etc.). Warranties on kitchen appliances, for example, are often purchased when you buy the product new. Home warranty programs are designed to cover most of your household appliances plus things like pipes, ductwork, water heaters, and things like that. The major home warranty companies in the US have programs for just about anything and everything that will eventually break.
Recommendations are tough because we really have no control nor can we act in your behalf when there is a problem. BUT, you did ask, so here are 3 companies we have had some experience with:
1. National Home Warranty
Website: lv-homewarranty.com
We like them because they're local. Their office is right here in Las Vegas at 1675 S. Mojave Rd. and their phone number is (702) 641-8888.
2. First American Home Warranty
Website: homewarranty.firstam.com
We've known them to be fair and honest and have known a few of their local agents. They are also a part of the First American Family of products and we do offer First American Insurance here at Sage.
3. American Home Shield
Website: ahswarranty.com
I do believe they are the most prolific in the US and offer coverage almost everywhere. They advertise as "the leader" in warranty services and I have used them myself in the past.
Here is a quote from the American Home Shield website:
A home warranty is a renewable service contract that covers the repair or replacement of many of the most frequently occurring breakdowns of system components and appliances.
I should think if you pick from one of these 3 you would be satisfied, but be advised there are many more of them out there with similar names and similar claims. If you want to go on a Home Warranty shopping spree, just Google "home warranty" on your internet browser and you'll have plenty to choose from.
Thanks for the question. |
Q3. Can I put my policy on EFT (Electronic Funds Transfer) at any time during my policy term?
Answer: Love this question... because EFT (Electronic Funds Transfer or automatic bank withdrawal) is a good way to pay your premium and not worry about late pays or cancellations.
The basic answer is YES you can put your account on EFT at any time with almost all of our companies. You surely can with Progressive, Travelers, Hartford, Mercury, Colorado Casualty, Western National and Mendota.
First step is to get an EFT Enrollment form (many are available right here on our site in the documents link under Resources). Fill it out, sign it, attach a voided check and get it to us by e-mail or fax or mail. We'll do the rest.
CAUTION: Timing and the company billing cycle are always a factor so the change may not come as quickly as you would like. In fact, if you hit the billing cycle at the wrong time, it may take well over 30 days for the change to become effective.
We're here to help you... so count on us and we'll walk you through every step. |
Q4. If I go out and buy a new car, do I automatically have coverage on it?
Answer: Great question... and often misunderstood.
Basically, yes... for 14 days. However, you only have the coverage that you currently have on the highest covered vehicle on your policy. So, if you only have liability now, you will only have liability on the "new" vehicle. That can be dangerous! If you buy a car from a dealership, they give you 30 days to get it registered and sometimes that is confused with insurance. The State of Nevada gives you 30 days to register your new vehicle, but you only have 2 weeks to notify your insurance company.
Primarily, you need to be concerened with coverages on your new vehicle. If you have a preferred, fully covered vehicle now, your new vehicle will have the same coverages for those 14 days. If you want it to be different, you need to tell us immediately. It is not uncommon for us to fax insurance ID cards to new car dealerships in Nevada, so you can even call us while you're there and we'll help you.
Finally, please understand that we are your partner in insuring your assets. Call us. We'll help you get the coverage you need. |
Q5. I'd like to know why insurance rates are so high in Nevada!!!!!!
Answer: A complex question, with many answers - here are a few:
First, auto insurance rates are not "statewide;" and therefore, rates in some parts of Nevada are quite inexpensive. Can you guess where? And why?
If you guessed the more rural parts of the state - you're right. Why? Simply because there are fewer losses. Insurance companies base their rates on the loss experience they encounter in an area. The areas are conveniently divided by the US Postal Service - Zip codes. It is simply the most efficient way to use geographical boundaries in the U.S. Every location has a zip code, and therefore every loss (or claim) has a zip code related to it. When determining rates, the company uses these statistics to determine the most "loss prone" and the least "loss prone" areas. That is only one factor that is considered - there are numerous others.
Some of the other factors are: driving record, the vehicle itself, age, gender, marital status, how much you drive [distance], and credit history.
So, auto insurance rates are not, necessarily, high in Nevada. However, Clark County (the Las Vegas metropolitan area) is surely one of the highest in the nation. Why? More losses. There is an abundance of reasons for the losses: 24-hour traffic, thousands of tourists, a population of drivers that is used to going 'fast', a preponderance of free alcohol, a somewhat blatant disregard for traffic laws, et. al.
Are you paying too much? I'm certain everyone thinks that answer is yes. We're here to help whenever we can and quite often we can save you money. But our primary goal is to make certain that you are covered properly for a loss. All of our companies have competitive rates, so once we have agreed on the right coverage's we'll test the market for you and find the best price. |
Q6. Does my auto insurance cover my personal property if it's stolen from my car?
Answer: The answer is no.
If you have a loss to your vehicle (stolen, break-in, etc) and you've also lost many personal items, you'll have 2 claims to file - one for the damage or loss to the car and one under your home/renter's insurance for the personal items lost. Many years ago I had clients who returned late at night from a trip overseas. Because of the hour, they left all their luggage, belongings and gifts purchased on the trip in their vehicle. The car was vandalized during the evening and everything was stolen. We processed 2 claims - The car was repaired through their auto insurance and the luggage, clothing, gifts, etc. were paid for by their homeowner's insurance carrier (less their deductibles). This is another reason to think about renter's insurance if you don't own a home.
Call us! We can help. |
Q7. I would like to know if changing insurance companies after being with one for more than 25 years will hurt my rates? Is it true that if an insurance company sees that you have moved your policy on a regular basis, such as every year or two, that you will end up being rated at a higher rate?
Thank You,
Curious Georgette
Answer: What an interesting question. I'll have to answer it a couple of ways and I'll gear my thoughts mostly to personal insurance (auto/home).
Let's start with loyalty - back in the "old days" when agents dealt with individual company underwriters, talked to people at the company and/or dealt with more than a computer, your agent could "appeal" to these people to keep your insurance if you had too many losses or needed to be reinstated because you inadvertently missed a bill. The human touch could look and see how long you had been with that company and often made exceptions if they made sense. That still can happen occasionally but more often, there's a "rule" on how many days late you are and how often you may have paid late and the rule is firm and fast without any thought to loyalty. When it comes to claims, the company often reviews and decides to keep you or not and no amount of appealing works - but it still does every once in awhile.
When it comes to rates, some companies give renewal discounts - if you've been with the company for so many years, you'll get a discount. That's fine - but if another company has a more competitive rate than you currently have including the renewal discount, it doesn't matter.
Now let's talk about moving your insurance often - from the agent's point of view, that doesn't make you a loyal customer. When you are with a direct writing company like State Farm, Allstate, etc., if you don't like your policy or rate, they do not have an alternative option for you since they only write with that one company. If you are with an independent like Sage Insurance, we can shop you with several other companies than the one we have you with. We would normally not move your insurance for a small amount of money just because your company took a reasonable rate increase - as soon as we move you, the new company may take a rate hike within the next year and you wouldn't have gained anything.
Finally, no insurance company "uprates" you because you change companies!! As long as you have continuous insurance, you get the appropriate rate with each company and they don't care how long you were with your prior company. They care how long you've had continuous insurance. |
Q8. Why do my insurance premiums keep going up?
Answer:
An open ended question that I answered to the writer personally, but thought that it could be answered in a general fashion and apply to everyone. I'm going to adress both homeowners insurance and auto insurance.
Home rates typically rise every year but the increase is normally not significant. When you have a single family home, every insurance company applies an inflation factor to your policy which is designed to keep your coverage current with the cost to rebuild. For example, if you have a home which would cost $200,000 to rebuild and the cost of construction in Southern Nevada goes up 4%, then your coverage will renew the following year at $208,000. Simple!! That additional $8,000 coverage costs you a small amount but it keep the house current and maintains the additional replacement coverage you have on your policy. If you have purchased a new home (or less than 7 years old), you are probably receiving a "new home" credit on your policy - this credit decreases a bit every year until it is zero. As the credit decreases, your premium increases but only a small amount. Finally, occasionally insurance companies take rate increases. If that happens, you would have an increase. These increases are typically "across the board" meaning everyone gets them but they happen less often than rate increases on auto.
Rate changes on auto insurance happen fairly regularly. Some companies have to take a rate increase for everyone and sometimes they "tweak" rates and go up on just the coverages that cause them to lose money and go down in areas of profitability. They also "tweak" territory rates which means that if your zip code is one in which they are losing money, the rate will increase and vice verse - they sometimes decrease rates in profitable zip codes.
Other reasons for increased rates include:
1) Cost of medical care increases. Auto policies cover bodily injury liability - if you are hurt in an accident, you will have medical bills. If the cost of health care increases, then the cost of bodily injury, uninsured motorists coverage (which is for bodily injury in Nevada) and medical payments coverage increases.
2) Frequency of claims - as claims increase so does the cost of insurance. We are not referring to fraudulent claims even though they are a part of the cost of claims but just more and more drivers submitting claims.
3) Severity of claims - insurance companies are seeing more severe claims - total losses, thefts and major accidents causing death or severe bodily injury.
4) Cost of doing business. Of every $1.00 an insurance company takes in, about 30-35 cents pays their cost of doing business. If corporate operating costs increase, then the cost of insurance increases
5) Tickets and accidents. This is something you already know; but when you have tickets or accidents that are your fault, you can be up-rated. Insurance companies charge "points" for every violation or accident for at least 3 years and most are charging a smaller amount for the past 4th and 5th years .
6) FRAUD. As the economy dips, the dishonest people in the world think of ways to defraud insurance companies. Most of the major companies have fraud units and will investigate and prosecute - but not all fraud cases can be proven. If you ever suspect fraud, please be sure to report it to your carrier or us and we'll be happy to do our part in helping a fraud case get investigated. (See more about insurance fraud on this website's Blog section) |
Q9. What is an SR-22 and how do I know if I need one?
Answer: An SR-22 is, simply, a document required by the State of Nevada showing "proof" of financial responsibility. The process is administered by the Nevada Department of Motor Vehicles (DMV) and many insurance companies licensed in the state. If it is determined you need one (see below), you have to get it from your auto insurance carrier ... that's where we come in ... and your auto insurance has to remain active for three (3) continuous years after the SR-22 date. That means that you can not have a lapse in coverage or the 3-year period starts all over again. An SR-22 is NOT insurance. It is a State of Nevada requirement added to your insurance policy for several different reasons.
The term SR-22 is often thought of as the "punishment" for receiving a DUI ticket, but that is not always the case. You may be required to obtain an SR-22 for almost any serious moving violation. It is also imposed if you are cited for driving without insurance, repeated traffic offenses in a short period of time, driving with a suspended license, and other offenses deemed serious enough by the court system. If you are guilty of any of these offenses, the court will require an SR-22 in order to continue your driving privileges.
It is important for you to know that only you can determine if you need an SR-22 and only you can determine if the required period of time is up and it can be removed. You have to find out from the DMV. If you have one and determine it is no longer needed, then you fill out a simple form available on our website or here in the office and we'll remove it for you. But the ultimate responsibility is yours.
There is an administrative cost associated with SR-22's charged by most companies (typically $25 -$50 every 6 months). But insurance points are not charged for this service. It is quite possible to have a preferred auto insurance policy with all of the added features that go along with it and still have an SR-22 on record. Insurance companies are well aware of the SR-22 requirement and if your composite picture of risk warrants preferred rates, you can still get them.
Sometimes people move to Nevada and require an SR-22 filing in another state in order to be granted a Nevada drivers license and registration. In most cases, we can take care of that also. But, you will have to carry the minimum liability required in that other state for the 3-year period. Many states have higher minimum limits than we do in Nevada.
In summary, call us if you need an SR-22 filing and let us help you. If you are already a client of ours and want your filing removed, we can handle that too. Thanks for the question. If you need more information, please contact us.
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Q10. What, exactly, is a deductible?
Answer: The concept of a deductible is as old as the insurance industry itself and in our contemporary environment it helps keep costs and premiums down.
In essence, it is a shared acceptance of risk between you and your insurance company. For example, you have some property to insure… let’s say your car (but the concept applies to all of your property). Your car is worth $20,000 and you insure it for the things that can happen to take it away from you for both long and short time intervals (it could be stolen, it could be damaged in an accident, it could be vandalized, etc.). So you and your insurance company make a contract (your insurance policy) and the insurance company says “I’ll insure $19,000 of the value of your car and you insure the other $1,000”. The $1,000 is your deductible. For that scenario, the premium will be some dollar amount. If you want to take less risk and accept only $500 of the value, the premium goes up because the insurance company is taking more risk. If you want to take more risk on yourself and get a $2,500 deductible, the premium will go down.
So, when your agent asks what deductible you want, she is really asking “How much risk do you want to accept?”
If you are in an accident and there is $5,000 damage done to your car, the insurance company will pay the bill minus the deductible you choose. You pay the deductible amount.
If your car is vandalized or your windshield needs replacement and the total cost of repair is $900 (and you have a $1,000 deductible), the insurance company pays nothing and you pay the $900. The deductible always comes first, and the remainder is covered by insurance.
It’s like gambling! You have to determine how much risk you’re willing to take and then pay the premium amount for that risk level.
If you want to accept no risk at all… that is, have a zero deductible… the premium is often out of line with the marketplace, and many companies don’t even offer it. One hundred dollar deductibles on autos were common once, but even they have been become rare because of inflation and the cost of repairs. Today, $500 deductibles on autos are common, and $1,000 deductibles are increasingly popular in order to keep premium costs down.
If you want to know the exact effect of a deductible change on your premium, you can call us and we’ll let you know. If you just have general questions about any of your insurance coverages, you can call us and we’ll get you answers. We’re here for you when you need us, so please call with your concerns.
Keep the questions coming. |
Q11. Why do you receive postcards from the DMV to verify insurance when you have insurance????
Answer: First, those postcards come from the Nevada DMV and are a part of the Nevada Insurance Verification Program. You know, those 3 1/2" X 7 1/2" blue sheets of paper you receive in the mail every year with your registration paperwork and probably don’t read. Here are a couple of direct quotes from that sheet:
How will DMV know if I don't have insurance?
Insurance companies licensed to do business in Nevada are required to report, on a monthly basis, all new or terminated insurance policies.
How does the program work?
Once a vehicle has been registered, the verification process begins. If a vehicle is identified as possibly uninsured, a request is sent to you to obtain insurance information for specified dates. When the Department receives the information, it is forwarded to the insurance company for verification. If the insurance company verifies coverage the process ends. If the insurance company denies coverage, or the registered owner does not respond, the vehicle registration will be suspended. The owner is notified that the license plates must be surrendered. It is unlawful to operate a vehicle without insurance.
These quotes are directly from the Nevada DMV. So, now let me give you a few reasons that your vehicle may be "reported" as uninsured.
There are several reasons that the DMV might believe that your vehicle is not insured.
1. A name on the vehicle registration MUST match the name on the insurance policy. That is, the named insured MUST also be on the vehicle registration and the name must match exactly. For example, if a female gets married and gets insurance in her married name and the name on the registration is her maiden name... they won't match. And DMV will send the postcard.
2. An incorrect VIN number can cause problems. You know, that 17 alpha-numeric identifier for every vehicle in the US. I can’t begin to tell you how many ways this can happen, from typos to smudges… the number might be wrong in one place or another. If the VIN doesn’t match on the registration and insurance, DMV will send the postcard.
3. If you pay your premium late and the policy gets canceled (even for one day), there is a possibility that will be reported and the DMV computer will see it as a cancellation. And DMV will send the postcard. Even if you re-instate the very next day.
4. Then there are random checks. That is, we do believe that DMV randomly sends the postcard just to insure that vehicles on Nevada's roads are insured. If the random check reveals you may not have insurance, DMV will send the postcard.
5. And probably the biggest reason is purchasing a new or used vehicle. Notice that the DMV quote above says “Once the vehicle is registered, the verification process begins.” You can read that to say something like “when you obtain a new vehicle and register it, you should already have insurance coverage identified with your company.” The problem here is timing. The best advice is to add the new vehicle to your policy and then register it very soon thereafter. Delays cause problems.
There is no need to panic just because DMV sent you that postcard. As long as your vehicle is continuously insured, we will help you convince DMV that you’re covered. BUT remember, these postcards are a part of the Nevada DMV Insurance Verification Program and they MUST be taken seriously… or you can face a fine from the State of Nevada. |
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