10 Most Common Insurance Questions

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Many prospective buyers make the mistake of rushing into the most lucrative quote as provided by an agent or broker. However, with well-placed research, you can be able to get the most appropriate insurance policy for your needs. 

​In this article, we look at the 10 most common insurance questions you need to ask before committing to buy.

​Why Is There A Misconception Between Insurance And Value?

Most people make the mistake of using the market value of their home as a cost basis when looking for homeowners insurance. However, they do not consider the cost of reconstruction when evaluating their homes. They miss other valuables such as custom features, age of the home, accessibility, and more. 

​Do Home-Based Businesses Need Insurance?

Most businesses run from home are relatively small and will not need business insurance such as workers compensation insurance. However, they will need to get extra business liability and property insurance policies that might not be enough as stipulated in the typical homeowners or renters insurance. 

What Is the Difference between Business Owners Policy and a General Liability Policy?

A business owner's policy is suited towards addressing a specific class of business risk. It will cover you against the common losses faced by a business. On the other hand, a general liability policy provides legal defense and protection from risks such as third-party property damage, and general injuries such as trips and falls. 
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However, not all businesses have access to a business owners' policy since they face a unique exposure to risk. Talk to American Financial Solutions today for a proper assessment of risks in your business.

​What Is Uninsured Motorist Coverage?

The uninsured motorist coverage policy comes in handy when another motorist hits you and does not have adequate or no auto insurance at all. If you or someone in your car is badly injured by a driver with insufficient low-cost insurance, the uninsured motorist coverage will help you get the necessary compensation. 

​What is Renter’s Insurance?

Renter’s insurance is designed for individuals and families who do not currently own their house. It is similar to homeowners insurance, except that the building is not part of the cover. However, it includes coverage for personal liability and property, and more. 

​What Is Umbrella Policy and Do I Need One?

An umbrella policy is generally a liability insurance cover that provides an extra layer of coverage beyond what you will get in your underlying insurance covers ​such as rental property, homeowners, and auto among others. There are also commercial umbrella policies providing extra cover over and above the current business policies.

​Does Credit Score Affect The Amount Of Premiums Payable?

Yes, your credit score will affect the amount of premiums you will pay. There is a direct connection between credit scores and the amount of risk such as policy cancellations due to non-payment. Consequently, a person with a lower credit score will pay high premiums. 

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What Is Universal Life Insurance?

Universal life insurance cover is a combination of two covers. The first is a cash value account that grows at a fixed interest rate or the current rate whichever is higher. The second one is an annual renewable term life policy with the face amount listed in the policy. With the universal life insurance cover, you have the option of cashing out and changing the amount of premiums at will.

​What Is Employers’ Liability On A Workers Compensation Policy?

Workers' compensation insurance is designed to protect both the employee and the employer from financial ruin in case of an accident. The employee will not have a cause to sue the employer, but that is not always the case.
In such a case, the employer’s liability will protect the business and the owner from ruin in case the employee sues the business or owner.

​What Is A High Deductible Health Insurance Plan?

A high deductible health insurance plan places a high level of upfront cost on the policyholder. However, the policy has much reduced rates compared to typical health insurance policies. The common deductible amounts range between $1200 and $1500.

This means that you will be responsible for the first $1500 and then the insurer will take up the rest of the costs based on the policy details.

​Final Thoughts

Shopping for an insurance policy is not easy and there is much research required before settling. These 10 of the most common insurance questions will set you on the right path.

Contact American Financial Solutions for answers to all your insurance questions today.