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Frequently Asked Questions

Does an “All Risk” insurance policy truly insure me against all risks?

It is now common for both commercial and residential insurance policies to use the term “All Risk” coverage. Although insurance policies are now much more comprehensive than they used to be, no policy covers you for everything. For example: all policies contain exclusions and this alone means that they are not truly all risk.

We recommend that you familiarize yourself with your individual policy coverage.

When should I drop Collision and Comprehensive Coverage on my vehicle?

This is one of the most frequently asked questions that we receive and there is no right or wrong answer. Many people drop physical damage coverage once the vehicle loan is paid off. You have to determine if your financial resources will allow you to replace your vehicle should it become written off in an accident without insurance coverage. Although your bank loan may be paid off, your vehicle still may be worth several thousand dollars.

If you require your vehicle for daily commute or work, then retaining physical damage coverage would be appropriate since you will require a quick replacement.

I have just purchased a home for $100,000, but my insurance broker is telling me I have to insure it for $150,000. This makes no sense at all.

The market value of a home and the reconstruction cost of a home are unrelated and there is often a major discrepancy between the two figures. Market value is based on trends, location, economic conditions, etc. Yet, the cost to rebuild a home in a down real estate market does not change and, in fact, continues to go up as building material costs go up.

Most homeowner’s insurance policies are required to be valued based on replacement cost for this reason.

What policy deductible should I have on my car or home policy?

Again, there is no right or wrong answer to this question. Most insurance companies offer several deductible options on their policies. The deductible is the amount that you pay in the event of a claim. Generally, the higher the deductible the lower the premium since you are absorbing more of the claim.

The trend today is to buy as high a deductible as you can afford to pay. This helps keep your overall insurance premiums lower, and over time the cost savings for carrying higher deductibles can be very substantial. It boils down to what limits you are comfortable with in your particular situation.