Most Frequently Asked Insurance Questions and Answers

Top Insurance Questions & Anwers for Optimum Insurance Savings

Insurance can be complicated, which is why we've put together a handy little Insurance FAQ to help guide you. PRO TIP: Checkout the "Pro Tips" Section to each of our answers to learn how to best save on your insurance.

But if you prefer to ask us a specific question, we will answer it directly.

Q: Should I bundle my home and auto insurance with the same insurance carrier?

Typically, yes! Some carriers may be able to offer you great discounts of up to 15% by combining your home and auto insurance. But pricing shouldn't always be your primary factor for buying insurance. Coverage is also an important element to your insurance plan. This is where a trusted insurance agent proves valuable. A good insurance agent can find you good bundling opportunities without sacrificing coverage.

PRO TIP: When getting a personal insurance quote you should ask to bundle your auto with your home to maximize your savings.

Q: What is "actual cash value"?

Often insured items can depreciate in value over time, meaning they are worth less at the time of replacement than when they were purchased or acquired. Actual cash value is the figure that you get when depreciation is deducted from the replacement cost.

PRO TIP: This is why it’s always a good idea to check whether your policy uses replacement cost or actual cash value.

Q: When do I need an additional interest on my insurance policy?

Additional interest refers to a party who is not the policy holder, but has an interest in the insured commodity and as such, requires notification of changes to the policy or cancellation. If, for example, you and your partner share a household vehicle but you are the only one who is insured to drive it, your partner may be the additional interest.

Q: How does my age affect how much insurance I pay?

As we age, we represent greater assurances for some insurers, while representing greater risk to others. For example, we may grow more assured, confident and careful in our driving as we grow in experience, making us lower risk for auto insurance companies. However, as we age into our senior years we become higher risks for auto insurance and can also develop health risk factors which, combined with other health and lifestyle factors, may impact on life insurance premiums.

PRO TIP: If you believe you are an exception to your demographic, and want to prove it. Ask your agent about a drive tracking device like Safeco RightTrack and you could save up to 30% on your annual premium. RightTrack is where the rubber truly meets the road when it comes to saving in auto insurance cost.

Q: Does changing my insurance company affect my credit score?

Potentially. If your credit score dips significantly, an insurer may consider you a higher risks as you may not be able to pay for your premiums once a policy is in place. It may also affect how an insurer allows you to pay for your policy (they may make you pay upfront rather than spreading the costs). However, in some states it is illegal for insurers to discriminate based on credit score and history.

PRO TIP: Colorado insurance companies are allowed to discriminate based on credit scores. 2/3rds of insurance companies have reported lower premiums based on credit scores.

Q: What is replacement cost?

Replacement cost refers to the cost of replacing valuable items that are lost or stolen or the cost of rebuilding or repairing your home or auto if it is destroyed.

PRO TIP: Replacement cost is generally not the same as the actual cash value because commodities can depreciate and lose value over time. This is why many people opt for replacement cost insurance.

Q: What is the importance of being the first named insured on an insurance policy?

If you are the first named insured on a policy it essentially means that you are the owner of that policy. It means that you are in charge of the policy and liable for payments due. It also means that you are the point of contact for the insurance company if information needs to be disseminated (like a change to a policy or if a refund is due, etc...).

Q: How does my credit score affect my insurance premium?

When you purchase a home, your credit score may play an important role in the homeowners insurance premium you pay. Insurance companies often use credit-based insurance scores to help them predict losses by determining potential policyholder’s likelihood to file a claim. The more likely they deem you to be to make a claim, the higher you can expect your insurance premium to be.

PRO TIP: There are many factors that determine the cost of your auto insurance premiums but you may not know that your credit score is likely one of them. As a matter of fact, 92% of insurers consider credit when calculating the cost of premiums. Among the factors considered are the length of your credit history, types of credit (i.e. loans, credit cards etc.) and your payment history, including late payments and delinquencies.

Q: Does how I pay for my insurance affect my premiums?

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It could. Most insurance providers offer a range of ways in which you can pay, but will typically give you a discount for paying in full. This is because it not only mitigates the provider’s risk, it also results in fewer payment and transaction fees so the provider can pass their savings on to you.

PRO TIP: Pay in-full to save in full.

Q: How are insurance claims handled on a partial loss?

A: There are some instances where losses are not equal to the total amount for which lost, stolen or damaged items are insured. This is known as a partial loss. In the event of a partial loss, claims are handled in much the same way as a full loss, based on either actual cash value or replacement Cost.

Have More Questions About Insurance? Don't Hesitate to ask us!

The world of insurance is incredibly complex and contradictory. And for the untrained, it can be extremely difficult to navigate through the jargon and technical terms and get to the simple truths which will help you make an informed choice.

That’s where we come in!

We’re officially rated as one of the top 3 insurance agents in Denver. Our expertise and years of experience can help make the complicated simple and explain any other insurance you have in plain-speaking, jargon-free terms. While we’ve tried to be as transparent as possible in the FAQ above please don’t hesitate to get in touch with us today if you have any further question.