Personal Auto Coverages

Posted on October 3, 2018 by Brad Smith

Most state financial responsibility laws require proof that you are able to pay for any damage or injury you may cause while driving. Auto insurance is the way that most people comply with these laws. Typically compliance only takes liability insurance at some minimal limit that varies by state. Liability coverages include the following:

Bodily Injury Liability – insures against injury that you may cause to other persons. The key is that it involves you being held financially responsible for injuries to other persons because of your driving, your ownership or other use of your vehicle.

Property-Damage Liability – handles damage that you may cause to another person’s property. Again, the coverage only responds when you are financially responsible for such damage and it has to be related to your use or ownership of a vehicle.

Uninsured Motorist Coverage – This coverage typically pays for injury you suffer from an uninsured motorist, underinsured motorist accident caused by a person who has no insurance; a person who can’t be located (“hit and run drivers”); or a person who has insurance but their insurance company is insolvent.

Important: Payment under this coverage is controlled by various laws that dictate what limit or limits must be sold. In some states, you may have an option to reject the coverage. Typically, the rejection must be in writing.

Underinsured Motorist Coverage – Similar to uninsured motorist, it pays for injuries caused by a driver who is inadequately insured. Example: You are seriously injured by someone carrying a bodily injury limit of $25,000, but your injuries are nearly $50,000. Your Underinsured Motorist Coverage limit is $100,000. In this instance, your policy would pay the difference between $25,000 and $50,000.

Kentucky's No-fault Auto insurance system Cars are expensive to buy and repair, providing great reasons for protecting them. If you borrowed money to buy your car, or if you leased the vehicle, the lender or leasing company was likely to make certain that you had coverage to pay for any damage to the vehicle. Below are typical coverages that apply either to the vehicle or to those operating the vehicle:

Collision coverage – This covers damage to your own vehicle that happens when your vehicle runs into another object, such as other vehicles, trees, light poles, mountains, etc.

Other Than Collision coverage – This also covers damage to your own vehicle that is due to sources such as fire, theft, hitting an animal, vandalism, earthquake, flood or hail.

Collision and Other Than Collision coverages are subject to deductibles (the amount a policyowner must pay). They eliminate the need for an insurer having to pay for very minor losses.

Personal Injury Protection or Medical Expense – This coverage typically handles medical expenses for injuries to you, your passengers or people who are “around” you. It may also cover you and your household if you, as a pedestrian or a bicyclist, are struck by an automobile.

Towing and Labor coverage – This coverage is to help pay for your costs to deal with a disabled car. It could help pay for the car to be towed to a service station or for any repair that occurs at the location of the car’s breakdown. Note that this coverage is for labor rather than the costs of car parts. Available coverage is minimal (often $25-$75).

Rental Reimbursement – This coverage reimburses your expense of renting a car as a temporary replacement. The car being replaced must be an insured car that’s unavailable for use because of it being damaged, lost (stolen) or destroyed in a covered loss.

Important: This is merely an introduction to complex policy coverages. Be sure to contact your agent for detailed insurance information.

COPYRIGHT: Insurance Publishing Plus, Inc. 2017

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Indemnity

Posted on September 29, 2018 by Brad Smith

Indemnity occurs when an individual or entity receives reimbursement and is made whole for a loss. Insurance policies provide indemnity to the insured when the insurance company pays claims on losses that are directly related to a covered cause of loss.

Most forms of insurance are consider a contract of indemnification or contract of indemnity. A contract of indemnity requires that an insured be made whole in the event of a loss. The contract further states that the insured may only be made whole. Better said, the insured cannot profit from the contract of indemnity.

The no profit clause in the contract of indemnity is critical to insurance companies and insureds as well. Without it, individuals could legal receive economic benefits from an insured loss. This would expose insurance companies to adverse selection, higher claims, which would result in higher premiums for consumers.

“Fold It Up This Way”: Five Things You Need To Know About Motor Home Insurance

Posted on September 28, 2018April 29, 2019 by admin

Congratulations! You’ve Purchased A Motor Home

RV insurance, rv, insurance, KY, OH, TN, RV insurance, KY RV insurance, TN RV Insurance, OH RV Insurance The staff at TruePoint Insurance in Fisherville, KY knows that the truth about what you need with insurance is the most important factor. The staffers here are honest and will tell you exactly what is necessary to make your motorhome experience the very best that it can be. You’ve taken the plunge. You’ve purchased the motorhome. Now, how do you best protect it?

Arm Yourself With Information

The best insurance policies are written when consumer and insurance agents know everything there is to know about what has to be protected. It’s your motorhome. Ask yourself some key questions to get your mind rolling as well as your insurance agents.

Arm yourself with answers to these five questions before you consider the amount of coverage and type of coverage you will need for your motorhome:

Who will be driving your motorhome? How old is the driver? Will there be other drivers on occasion? Do you have a clear idea of the driving histories of all of the drivers of your new motorhome?
Where do you plan to take your new motorhome? Will you be driving internationally? Will you be driving out of state? How often will you be driving out of state or internationally?
Where will your motorhome be stored when not in use?
Are you going to let others rent your motorhome when you and your family are not using it?

A complete, comprehensive conversation with an insurance agent at TruePoint Insurance in Fisherville, KY today can negate regrets tomorrow. Call us today or come in so that we can discuss how your motorhome can be the rolling bed of recreational freedom and enjoyment for yourself and your family.

What is insurance? Part 2 of 2

Posted on September 20, 2018September 19, 2018 by Brad Smith

What is insurance?

Practice Risk Avoidance at your own risk

Individuals and business also practice a direct from risk avoidance. Suppose you sold your car and committed to using public transportation. Without a car, you have successfully eliminated your primary automobile liability exposure. And without the risk, you are no longer required to carry the state-mandated insurance.

Businesses might opt to outsource specific functions allowing them to eliminate multiple risks ranging from property to casualty to workers Risk Avoidance at your own risk compensation. Altering production methods, implementing automation, and revising policies and procedures are just a few avenues where businesses can eliminate specific risk.

Risk avoidance is not a practical solution for all exposures, but it can be a very cost-effective solution when implemented correctly. Those practicing this method must realize that risk avoidance may not be as simple as it appears. You may have noticed in the auto liability example above, the phrase “primary exposure.” This suggests that there continues to be potential exposure even after the sale of the vehicle.

You don’t have to own a vehicle to drive. People rent cars all the time. While it is hard to imagine a scenario where you could rent a vehicle without liability insurance if you did you would be exposed. A more likely scenario would be your exposure in the event you borrowed a friend’s car. Coverage stays with the auto, so as long as you had permission from your friend to drive their vehicle, the policy covering the car would protect you.

Borrower Beware! What auto liability limits does your friend have? Did you ask? Does it matter? Let’s assume that the vehicle has the minimum coverages allowed by your state. For us, that would be $25,000 for bodily injury for any one person, capped at $50,000 if multiple individuals are injured and $25,000 for property damage.

As the driver of the vehicle, you are potentially liable for damages that exceed the vehicles policy limits. In this scenario, the vehicle coverages are limited, placing you in a position with significant exposure. In your past, this wasn’t an issue. When you owned an auto and had insurance, your policy extended liability protection to you even when it wasn’t your car. Your decision to practice risk avoidance has triggered additional and perhaps unforeseen exposures.

There is an old saying, “You’re picking up pennies in front of a train,” or more simply said, you’re taking too much risk for only a modest reward. If you practice risk avoidance, you better know the train schedule.

Risk Reduction; Modifying exposures for everyone’s benefit

Reduce risk What is risk reduction role in risk management? Unlike the other three methods, risk reduction is not a stand-alone method. It is more akin to a complimenting strategy or modification. Examples of risk reduction would be businesses utilizing sprinklers, keeping parking lots and sidewalk free from ice and snow, or preemptively addressing employee actions that put an organization at risk. Individuals performing regular maintenance on their home or auto are practicing risk reduction. Installing a security system or erecting a fence with a locked entry gate around a pool are also examples of individuals utilizing risk reduction techniques.

When combing risk reduction methods with risk retention, the results directly benefit the individual or business. These actions may have one of two outcomes. The installation of a sprinkler system is an action that results in lessening the loss. Steps taken to reduce risk can also lower the probability of loss. The previously mention action to address snow and ice removal would most likely reduce the potential for a loss.

Don’t Fear the Loss Control Man!

The role of Loss Control can be confusing. Insurance companies can be viewed as risk management consultants and as risk transfer solutions. However, a fine line exists between providing beneficial risk management counseling and becoming a deterrent to business. The action of an insurance companies loss control efforts can easily gauge the company’s success in balancing the two roles. When this group with providing risk reductions techniques for the insured they become a catalyst for change that becomes genuinely value added for both the insured and the insurer. Loss Control units aimed at creating awareness of potential risk reduction opportunities will have a positive financial impact on the insurance company, which should, in turn, have a positive effect on the insured’s cost of risk management.

When you buy an insurance policy, you are purchasing much more than a risk transfer agreement. The insurance policy today has evolved to incorporate many aspects of risk sharing, risk retention and indirectly risk avoidance. The final method of risk management, risk reduction also comes into play. Acting primarily as an incentive, or a chance to reduce the overall cost insurance.

So what is insurance? Today, insurance is a contract/relationship between an insured and an insurer where the insurer utilizes modern risk management tools and encourages proactive steps by the insured which will lead to an increasingly efficient process of indemnifying the insured against specified peril(s).

Access Part 1 of this series

What is insurance?

Posted on September 19, 2018September 20, 2018 by Brad Smith

Insurance

Some people think that insurance is risk management. But industry professionals will argue that insurance coverage is only one component of the risk management process. What’s the difference between the two? Risk management is a discipline used to identify, evaluate and address specific risks. A risk management plan will utilize one or more of the four risk management methods.

The Four Risk Management Methods

Risk Avoidance Risk elimination

Risk Reduction Reduce

Risk Sharing Transfer, Insurance

Risk Retention Do Nothing, Self-Insure

So what is Insurance?

If insurance isn’t risk management, then what is it? Insurance is commonly considered to be a mechanism for risk transfer. If you look up the word insurance, you are apt to find the words “transfer of risk” or “risk sharing.” So insurance is risk sharing or risk transfer? Yes. But it’s more.

Insurance is a mechanism that can be used to transfer risk from one party to another. In exchange for a premium, insurance companies will agree to provide indemnification. Indemnification, or the protection against loss, can be purchased to mitigate a large number of exposures. Insurance products exist to transfer both property and liability risks.

Insurance Today

“Ah, the joys of homeownership,” words muttered regularly by homeowners. Homes generate problems. Many associated with either property or casualty exposures. Typically these risks are transferred to an insurance company through a homeowner’s policy. In a pure form of risk transfer, the insurance company would make the insured whole in the event of a specified loss. But most of us don’t transfer all the risk. The amount we recoup will be the value lost less a deductible.

Most property policies have a built-in risk retention mechanism, the deductible. On the surface, this may seem to be negative. But before making these assumptions consider why it’s there. The deductible is in fact risk retention. By retaining the first $500, $1,000 or more, the insured can significantly lower the cost of insurance. Without deductibles, insurers would become inundated by the number of small claims. Smaller claims would also adversely impact administrative cost markedly. Finally, without a deductible, insurance company’s exposure to fraudulent claims would likely skyrocket. Without a deductible, insurers would face mounting costs that could only be offset by raising premiums.

At first blush, deductibles appear to work to the benefit of the insurance companies. Deductibles no doubt benefit insurance companies. But after considering the implications, it would seem that consumers are reaping the most value.

Today’s insurance contains a risk retention component

When insurance companies avoid risk it benefits the company and the consumer

You may have learned from experience that insurance companies will not provide coverage in some instances. Insurance companies don’t want all risks. By insuring only the risk that they prefer, they are practicing risk avoidance. Trampolines, pit bulls, fireplaces, and log homes are good examples of risk that many insurance companies avoid.

Insurance companies underwriting higher risk exposures are expected to have increased losses. What does this mean for the insured? That’s hard to say. It doesn’t mean that you can’t get insurance. You most likely can. It does mean that you will have fewer options and in most cases, reduced competition leads to higher costs.

Rejecting certain risk helps insurance companies, but how does it help the consumer

The practice of risk avoidance improves insurance companies underwriting results. In theory, insurance companies that can successfully manage their risk are more likely to have higher profitability and faster capital growth. As the company’s capital grows, so does the need to write additional insurance. If enough insurance companies are experiencing the same results, competition will increase. The increased appetite for risk will ultimately impact the insured, by putting downward pressure on premiums.

Trickle-down risk management

The benefits from risk avoidance can be direct or indirect. The risk avoidance techniques used by insurance companies have both a direct and indirect effect. As mentioned, the direct actions put downward pressure on the cost of insurance. These practices can passively encourage consumers to avoid unacceptable risks. Over time, sound risk management practices trickle-down which further reduce risk management costs.

Access part 2 of this 2 part series which will be published on 9/20/18

What is an Insurable Interest?

Posted on September 17, 2018 by Brad Smith

Most of us buy insurance. We buy insurance for our homes, autos and even our lives. But have you ever consider what would happen if you tried to buy insurance on the building owned by the company you worked for? Any answer other than no will raise red flags.

First off, you most likely can’t buy insurance on the building. You don’t own it. Yes there are instances where you can buy insurance on a building you don’t own. The most common being property you rent where the lease specifically cause for you, the tenant, to provide property coverage.

Second, why do you want coverage for the building? Are you concerned that it will burn or blow down? What will you do with the proceeds? You’re not reasonable for paying off the mortgage.

Before you can buy insurance you should be required to prove that you have an insurable interest. Otherwise the policy will not be valid.

Insurance is based in part, on the Principle of Indemnity, a theory that the insured should be may whole. The principle of indemnity has two requirements:

The insurance company must make the insure whole or restore the lost financial value

The insured, as a result of a loss, cannot be rewarded or generate a profit

If not for bullet two above, abusive practices would occur that would drive up the cost of insurance. Along these same lines the insurable interest requirement comes into play. If an insured had no interest they would also have no financial exposure or loss. Any insurance payments received would create a windfall for the insured. That would then be in direct conflict to the above. This would ultimately encourage unethical behaviors. The end result would be an increase in the cost of insurance for all.

Understanding what is an Insurable Interest

Can you insure a car that is not title to you? In most cases the answer would be no. But there are times when you can. If you lease a car, the title of the car is not in your name. Even though you don’t own it you can insure it. Your lease agreement places the loss of value (other than normal wear and tear) on your shoulders. The agreement most likely goes a step further, by requiring you to maintain insurance for the term of the lease. Bottom-line here is that you to have exposure to a financial loss in the event the vehicle is damaged. Thus giving you, the lessee, an insurable interest in the vehicle.

As you can see, property ownership is not a required to have an insurable interest. Consider Liability Insurance or Workers Compensation Insurance. Both forms of insurance protect from exposures where there is no property. In both cases an insurable interest exists that are not tied to property of the insured. However, both coverages are in place so that the insured can take ownership of their actions. When actions of an insured lead to loss or damage to others they trigger a financial exposure. This in turn creates an insurable interest.

Tackling Insurance Terminology; Homeowner’s Insurance

Posted on September 11, 2018September 20, 2018 by Brad Smith

Homeowners Insurance is the insurance policy used to protect your home and contents. Insurance for your house can come in various forms. Taking the time to understand what your policy does and doesn’t cover is essential.

In its most common form, home insurance is written as a package policy. A package policy occurs when an insured’s home and auto coverage come from the same insurer. Individuals that can keep their home and auto insurance together enjoy significant savings.

The primary purpose of homeowner’s insurance is to indemnify your home against loss. In most cases, the policy also protects personal belongings and additional structures.

Besides protecting property, most homeowners policies also provide personal liability coverage. This coverage provides protection in the event another party suffers loss due to the negligence of the homeowner.

We advise homeowners to actively participate in the insurance process. Reading your insurance policy should never be considered optional. Some of the more important aspects to consider are:

Covered Causes of Loss

Limits

Deductibles especially those state as a percentage

All information used to identify and describe your property

It is important to remember that certain risks are not covered by the homeowners insurance policy. Earthquake, flood, water backup, sinkhole, as well as other significant risks, are typically offered a la carte.

Insurance Check-Up: Auto Insurance

Posted on September 9, 2018September 9, 2018 by Brad Smith

As we go about living our lives, insurance seldom crosses our minds. That’s why we buy insurance! Yes, it is. However, what we do and how we live our lives impact our insurance. Getting married, have children, moving are a few examples. There will be no alarm. You will not find a note on your calendar. There may not even be no insurance agent calling to inform you of the need to review your insurance.

There are a few events in life where you will get a friendly reminder to review your insurance. The most obvious; when you buy a new car. Some of you may be thinking that buying a new car shouldn’t trigger an insurance review. The only requirement is that you call your agent and ask them to add your new car to your existing policy. It’s certainly possible that for some, that will suffice. For the rest of us, we are providing an insurance checklist to consider:

Make sure your new vehicle is added to your policy

If you traded in a car, you will need to make sure it is removed from your auto insurance policy.

Your new car may increase your financial exposure if left uncovered. It is important that you review your physical damage coverages, collision and comprehensive. If you didn’t have them on your previous vehicle, you may want to consider it now.

New Car Replacement Coverage: New cars deprecate red to have comprehensive and collision.

New Car Replacement Coverage:

New cars depreciate significantly when you drive them off the lot. That depreciation may impact your settlement in the event of a claim. The best way to avoid this is to add a New Car Replacement endorsement added to your auto insurance policy.

Gap Coverage:

You might find yourself writing a check. If your cars current value is less than the balance on your loan, your insurance may not cover it the difference. You can avoid this nightmare by adding this endorsement.

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Knowledge is King. Be prepared to save money on your next car insurance quote.

Posted on September 7, 2018September 20, 2018 by Brad Smith

When reviewing car insurance quotes, it is critical to consider more than price. Sure price is important. It’s extremely important! But it’s also important to get what you pay for and have protection tailored for your circumstances.

Where to Start

You should start by considering the major components of an auto insurance policy.

Kentucky Auto Insurance

I. Automobile Liability Insurance

Liability insurance reimburses others when your vehicle is involved in an At-Fault. Coverage is assigned to the specified vehicle. This means your insurance will pay when you or any authorized driver are behind the wheel. Auto Liability insurance covers injuries and property damage.

a. Bodily Injury injuries to other individuals

i. per person $25,000 (KY Minimum Limit)

ii. each occurrence $50,000 (KY Minimum Limit)

Before accepting the state minimum you should ask yourself:

· How long will $25,000 last in the Emergency Room?

· How far will $50,000 go if you hit a van or bus and injure several people?

b. Property Damage reimburses others for damages to vehicles or other property.

i. each occurrence $25,000 (KY Minimum Limit)

Again, ask yourself:

· How many cars did you pass on your way to work today worth more than $25,000?

· What will happen if you rear-end someone that leads to chain reaction? What are the chances of $25,000 covering you if your actions total two or three cars? Five cars? Ten?

Higher limits are available. Limits may be increased to as high as $250,000/ $500,000 for bodily injury and $100,000 for property damage.

If you require higher limits:

A personal umbrella policy is a very cost-effective way to transfer excess risk.

II. Personal Injury Protection

or PIP is a product of the No-Fault System. It covers injuries and other related costs for the driver of your vehicle and passengers.

i. each occurrence $10,000 (KY Minimum Limit)

Higher limits are available

III. Physical Damage `

Property Damage coverage for your car

a. Collision

covers your car in the event of a collision with another car or object regardless of who is at fault. If you are at fault, collision coverage reimburses for the cost of restoration. However, the coverage comes with a risk-sharing mechanism known as a deductible. In an At-Fault accident, your settlement will be reduced by the amount of your deductible. If you are not at fault you will be reimbursed by either the at fault parties insurance or by your insurance. In either case, when you are not the party at fault you will not be required to pay a deductible.

b. Comprehensive coverage

protects your vehicle from risk out of your control. Also referred to as “other than collision,” this coverage protects against Mother Nature. Exposures such as wind, hail, hitting a deer or a falling tree are examples of covered causes of loss. The policy goes beyond covering “Acts of God” by also insuring your car from fire, theft, and vandalism.

IV. Uninsured (UIM) and Underinsured Motorist (UNIM)

coverage is also tied to the No-Fault Insurance System. Used in only 21 states, it covers the insured when the AT-Fault Party isn’t insured or doesn’t have enough insurance.

UIM and UNIM are optional coverages, that help pay medical bills and/or the cost to repair your vehicle. This coverage is utilized only when the other parties insurance is insufficient. Coverage limits tied to and capped at the same limit as your auto policies liability limit.

Do you know the percent of uninsured drivers in Kentucky?

Over 15% of Kentucky’s drivers are uninsured. It gets worse, as the number of underinsured drivers is significantly more. It is critical that you consider how UIM and UNIM coverages may impact you.

V. Other Coverages

Include items such as:

Towing

Rental Reimbursement

Loan Gap

New Car Replacement

OEM Endorsement

The above list, while secondary, may include coverages important to your auto insurance. We highly recommend that these, as well as the other car insurance coverages that we have discussed, be reviewed with a licensed insurance professional.

The old adage, ” a penny wise and a pound foolish” must have been first spoken by an insurance agent. The old English saying proclaims that it is rather foolish to save a penny today when it will cost you a dollar at some point down the road. Prudent counsel.

Would you expect to receive that kind of advice today? NO!! What we get today is more along the lines of naming your own price. WHAT!!! Yes don’t bother to worry about managing your risk, just tell us what you want to pay. Our computer will carve up, water down, and eliminate the coverages this best way it can. The end result certainly isn’t a tailored insurance policy, but it does come at the price you want.

Automobile Insurance

Posted on September 4, 2018August 31, 2018 by Brad Smith

Insurance that provides protection or indemnification against losses to the motor vehicles covered. The insurance comes in various forms. The term automobile or auto insurance is most commonly used to describe the mandatory and optional coverages required by each state’s Department of Motor Vehicles (aka DMV.)

The mandatory component, or liability coverage, protects the insured against claims or liabilities that may arise as a result of bodily or property damages where the insured has been found “at fault.” Auto or car insurance can also be purchased to protect the insured’s automobile in the event of physicals damages. Physical Damage coverage or PD provides car owners an insurance vehicle that will protect comprehensive risks (such as weather, animals, etc.), collision (“at fault” accident, damage due to striking another object) or both.

A separate and different form of insurance that at times may be referred to as automobile insurance is a warranty. New and occasionally used vehicles can be purchased with a limited warranty that provides protection against product defects.

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