Frequently Asked Questions

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Personal Insurance

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    Private Passenger Auto

    Q: What is the difference between Comprehensive and Collision coverage?
    A: Comprehensive extends coverage in the event there is anything other than collision. Collision extends coverage to your vehicle in the event of a collision with another object regardless of fault.

    Q: What is Uninsured/Underinsured coverage?
    A: Also commonly referred to as UM/UIM, this coverage extends to you in the event the other driver involved in an accident does not have enough or any coverage to cover your bodily injury. For a complete description of this coverage check out our Casualty Insurance 101 section

    Q: What is the state minimum coverage for Arizona?
    A: State minimum coverage for Arizona is $15,000 per person / $30,000 per accident  in Bodily Injury and $10,000 for property damage. Though it’s strongly suggested Arizona does not require that you carry Uninsured/Underinsured motorist coverage.

    Q: If a friend borrows my car are they covered?
    A: In Arizona the insurance follows the vehicle, provided your friend also has auto insurance their policy would cover the vehicle on an excess basis. Many carriers do have terms and conditions pertaining to this matter so it is important that you review your policy carefully before lending out your vehicle.

    Q: Does my policy provide coverage when I rent a vehicle while on vacation?
    A: This is one of the most common questions and it really depends on your carrier and the coverage form used within your policy. In many cases your insurance policy will extend excess coverage. In the event you don’t purchase the rental car insurance your policy will act as the primary. For physical damage to the rental vehicle, some carriers will extend comprehensive & collision coverage less the deductible selected on your policy.

    Q: Am I covered when driving in Mexico?
    A: Mexican law requires that you purchase separate liability coverage before operating your vehicle in Mexico. Your Arizona personal auto policy may provide some limited coverage on a limited basis (generally no more than 20-30 miles of the Mexican border), but this coverage does not meet the insurance requirements of the Republic of Mexico.

    Additional Private Passenger Auto Insurance Questions (Coming Soon)

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    Q: Does RV insurance cover my personal property?
    A: RV insurance polices do have the option of adding personal property coverage in the event of theft or damage up to the limits of liability. Every carrier has specific limits they will cover up to as well as exclusions so it’s important that you review the endorsement with your agent.

    Q: Is roadside assistance available for my RV?
    A: Just like auto insurance RV policies do have the option of adding roadside assistance. This is a valuable coverage and can save you hundreds on towing expense for these large vehicles. Certain carriers also extend loss of use coverage which will cover  cost of temporary housing and transportation costs.

    Q: Can I decrease my coverage when not using my RV?
    A: Certainly, many people drop coverage limits down to state minimum and maintain comprehensive coverage during the office season or when the RV is just sitting on the side yard. Not only is this process going to save you money but it’s really easy to do. It is important though if you drop your coverage that you remember to contact your agent before the next road trip to increase back to suitable limits.

    Q: Are all drivers covered when operating my RV?
    A: When purchasing an RV policy it’s important that you list all drivers that are going to be operating the vehicle. If someone not listed on the policy is driving and crashes the insurance carrier has grounds to cancel the policy or back-charge premium for the unlisted operator. Each carrier is different so it’s important that you review all your

    Q: I live out of my RV for most of the year, am I covered under a standard RV insurance policy?
    A: While certain carriers exclude this type of risks there are carriers that offer a “Full Timer’s Package” for those who use their RV as a primary residence.

    Additional RV Insurance Questions (Coming Soon)

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    Q: Is my safety gear covered in the event of an accident?
    A: Most carriers now offer coverage for safety equipment including helmets, gloves, jacket, eye protection, and boots, some at no additional charge. It’s important that you review the coverage terms as there may be specified limits to this coverage, for instance Safeco Insurance offers coverage up to $1,000.

    Q: I race my motorcycle, does my policy cover me during the race?
    A: Many carriers exclude coverage when racing, taking part in time trials, or speed testing. While some carriers may exclude coverage during these activities, some carriers won’t offer any coverage to the individual at all if these activities take place. It’s important that you let your agent know before writing the policy to ensure they’re able to place you with the proper insurance carrier.

    Q: Can I save money by taking a motorcycle safety class?
    A: Insurance carriers strongly support and recommend taking safety courses to improve your motorcycle handling skills and safety knowledge. Many carriers also offer discounts to those who have recently or actively take safety courses.

    Q: I have custom saddle bags on my motorcycle, are they covered in the event of an accident?
    A: Custom parts & equipment coverage is available to endorse onto the policy which extends coverage to your saddle bags in the event of an accident. It is important that you review the coverage form specific to the carrier as they may or may not include coverage for the contents within the bags. Certain carriers automatically include $1,000-$3,000 in coverage when full coverage is purchased.

    Q: Is there coverage for my guest rider/passenger in the event of an accident? 
    A:  In most states, guest passenger liability is mandatory on all street bikes, and optional for off-road bikes.Guest passenger liability helps cover the cost of hospital bills and medical care in the event you’re at fault for the accident that has caused the injury. It is similar to bodily injury liability, but specifically for a guest passenger.

    Additional Motorcycle/ATV Insurance Questions (Coming Soon)

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    Boat/Personal Watercraft

    Q: Is boat insurance required by law like auto insurance? 
    A: You are not required by law to purchase boat insurance as an owner in Arizona. Other states however like anything else do have their own laws and regulations so it’s important to check with an insurance agent in your state.

    Q: Does boat insurance extend coverage to my passengers?
    A: Yes, boat insurance covers both the owner as well as passengers under the liability portion of the boater’s policy. Depending on the policy the coverage may or may not extend to passengers being pulled behind the boat during water sports activities. It’s important to review all the coverage forms and address any questions or concerns with your agent.

    Q: Does boat insurance cover mechanical breakdown?
    A: Many carriers do not offer mechanical breakdown coverage as it’s generally wear and tear that causes engine failure. However Progressive Insurance offers an endorsement called Propulsion Plus® which extends coverage to repair or replace a mechanical breakdown that occurs in the lower unit of an outboard engine, or in the upper and lower units of an inboard/outboard (stern drive) engine. Wear and tear and defects are all covered. A $250 deductible applies to each breakdown.

    Q: Does my policy cover hull damage in the event I hit a rock?
    A: Coverage is extended provided you have physical damage coverage for your hull and machinery less the deductible you’ve chosen. Some policies may have a different deductible for above and below the waterline losses, be sure to ready all the coverage forms.

    Q: Does my policy cover theft? If not can I add theft coverage?
    A: A standard boat policy only extends liability coverage unless you endorse the policy to include comprehensive which extends coverage for theft of the boat itself. You also have the option of adding coverage for personal property such as fishing equipment, binoculars, cd players, coolers, etc… up to the limits selected.

    Additional Boat/Personal Watercraft Insurance Questions (Coming Soon)

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    Q: Why should I buy homeowner’s insurance?
    A: Homeowner’s insurance provides coverage for the property, your personal property, and extends liability coverage for accidents that injure other people or damage their property.

    Q: Is it legally required to purchase homeowner’s insurance?
    A: No, it’s not legally required but if you have a mortgage on the property they may require you carry it until the loan is paid off. In some instances a mortgage company may also require you to carry flood insurance if you’re in a flood zone.

    Q: Are there any items not covered on my homeowner’s policy? 
    A: Most items are covered under a standard homeowner’s policy, if it’s not covered you may be able to endorse the coverage. A few items that are not covered under a homeowner’s policy are; motorized vehicles, land, pets/animals, electronic data(unless an endorsement is purchased).It’s also important to know that there are aggregate limits to certain types of personal property listed on the policy. Every carrier is different so it’s important that you review your declarations page and speak with your agent to ensure you have adequate coverage.

    Q: How do you determine replacement cost of my home?
    A: A common misunderstanding when purchasing homeowner’s insurance is the carrier doesn’t match coverage to the property value or purchase price. The amount of coverage for the property is based on a series of factors such as age, build type, roof type, size, special features, and many other factors. All this information is placed into a cost estimator where these factors along with industry specific data produce an estimated rebuild cost. This is what determines your replacement cost and how much insurance you should carry on the home. In many cases the rebuild & market value are not the same.

    Q: What factors affect the rate of my homeowner’s insurance?
    A: As stated in the previous question rating factors play a big role in determining your rate. There are also other factors such as your age, credit score, insurance score, and claims history that affects the annual premium.

    Q: What does Personal Liability Insurance Cover?
    A: Personal Liability coverage comes in a variety of limits such as $100,000, $300,000, $500,000, or $1,000,000 & is designed to help protect you against the costs associated with bodily injury and property damage for which you are found legally liable for causing to others. This element of your policy can cover hospital expenses, as well as costs related to loss of work, rehabilitation, and more. Damage to property may also be covered.

    Q: What does Medical Payments Cover On My Homeowner’s Policy?
    A: Medical Payments to Others coverage applies to the costs associated with injuries that happen to guests at your home, regardless of who is at fault. Pain and suffering and property damage are not covered by Medical Payments to Others coverage.

    Additional Homeowner’s Insurance Questions (Coming Soon)

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    Q: What is the difference in between homeowner’s insurance and condo insurance?
    A: Both policies extend similar coverage including personal property coverage, liability, and loss of use but where they differ is the dwelling coverage. A standard homeowner’s policy extends coverage to the entire structure and other structures on the premises where as a condo policy only extends coverage to the unit from the drywall in, unless otherwise specified on the association master policy.

    Q: What is a condo association master policy? 
    A: A master policy provides coverage to the buildings and common areas with the condo association, this includes: club houses, pool areas, parks within the community, etc…

    Q: Do I need insurance for my vacation condo?
    A: In short, yes. Insuring your properties is important regardless if you’re there or not. Disaster strikes when you least expect it and leaving your property uninsured could leave you exposed to a costly loss.

    Q: What is loss assessment coverage and how do I determine how much coverage to purchase?
    A: Loss assessment coverage helps protect you from paying out of pocket for damage or liability that exceeds your condominium association master policy limits. Most policies come with a standard limit of $1000 and can be increased as needed. Understanding how much coverage to purchase is based on the condo associations master policy and how much coverage they carry. In many cases an assessment is generally to help pay the condo associations deductible at which their policy kicks in to cover the loss. If there isn’t enough coverage on the master policy to cover the loss, the association may assess the remaining expenses to the condo owners. When purchasing this coverage it’s important to review the master policy with your agent to determine an adequate coverage limit.

    Q: Am I covered if the occupant above me floods his bathroom and it causes damage to my unit?
    A: In an unfortunate situation such as this it’s not black & white as to who will foot the bill for repairs. The firs step should be making any immediate accommodations necessary to slow or stop any further damage. The next step would be to file a claim with your insurance carrier so they can begin the investigation process. What will occur is the claims adjuster will then investigate the condo association master policy, and contact the insurance carrier of the unit owner above you. If there is any negligence determined by either the condo association or unit owner above you, your carrier will subrogate the loss to the other carrier(s) accordingly.

    Additional Condo Insurance Questions (Coming Soon)

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    Q: What is the difference in between a homeowner’s policy and a landlord policy. 
    A: Landlord & homeowner’s policies are quite similar in the sense that they both extend coverage to the property, include liability coverage, and if desired you can also purchase personal property coverage. Where the coverage primarily differs is in the actual coverage forms, a homeowner’s policy is written on an HO3, HO5, or HO5 form while a landlord policy is written on a DP1, DP2, or DP3 form depending on the coverage options desired.

    Q: I no longer have tenants and am hoping to have new tenants within 30 days is that going to be a problem?
    A: All policies are different and should be reviewed to determine the amount of time a home can be unoccupied before being classified a vacant property. Generally the time frame to declare a property vacant is 60 days. One of the main requirements when purchasing landlord insurance is that there are tenants currently in the property. In short if you’re in between tenants and the expected time frame is less than 60 days you should be fine but you will want to consult the coverage forms to verify.

    Q: Will landlord insurance extend theft coverage to the appliances included in the property?
    A: On premises theft coverage is an optional coverage available to be endorsed onto the policy in addition to the personal property coverage. Certain carriers will split the personal property and theft coverage limits, for instance you may have $10,000 in personal property coverage and have a selected on premises theft coverage limit of $5,000. Though there are two limits it doesn’t mean you have a total of $15,000 in coverage, it just means they will only cover up to $5,000 maximum due to theft, up to $10,000 due to any loss.

    Q: Does my policy extend coverage to my tenants personal property?
    A: No. Landlord insurance does not extend coverage to any tenants personal property, it’s up to the tenant to purchase renter’s insurance to cover their personal property. In addition it’s wise as a landlord to require your tenants to carry renter’s insurance as it provides liability coverage for personal injury or property damage inflicted on others.

    Q: Am I required to carry landlord insurance when leasing the property?
    A: Although Arizona does not require that you carry landlord insurance, if you still have a mortgage on the property the financial institution may require that you carry some form of property coverage. Though landlord insurance is optional we strongly recommend it to ensure you’re protecting both your asset and income.

    Additional Landlord Insurance Questions (Coming Soon)

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    Vacant Property

    Q: Will my homeowner’s policy continue to cover the property while it’s on the market?
    A: Standard homeowner & landlord policies generally have a vacant exclusion that kicks in after a home has been empty for 30 or 60 days. What this means is your current homeowner’s insurance policy will not extend coverage in the event of a loss if the home has been unoccupied and empty for this duration of time.

    Q: I own a vacant property and plan on flipping the house. Before we list it on the market we plan on remodeling the kitchen & living room, will I be covered during this process?
    A: Vacant property insurers such as American Modern generally allow basic renovations such as painting, flooring, replacing cabinets, etc… Larger renovations such as adding a garage, knocking out interior walls, or any other major structural changes may not be covered so it’s important to disclose this information to ensure the policy written extends coverage for this exposure.

    Q: Does vacant property insurance cover vandalism? 
    A: First it’s important that you understand the definition of vandalism. If there is no theft, just physical damage or defacement, the loss is considered to be vandalism. When purchasing vacant property insurance you have the option of endorsing Vandalism/Malicious Mischief onto the policy which extends coverage for these types of loss.

    Q: What is the shortest policy term I can purchase for a vacant property we’re selling? 
    A: Vacant property insurance policies have several options including annual, six month, or three month policy terms. When considering your options it’s also important to keep in mind that certain carriers include a minimum earned premium clause upon binding coverage.

    Q: When reviewing my policy documents I noticed it states “Coverage Form DP-1”, what is that?
    A: Vacant property insurance can be written on both a DP-1, DP-2, and DP-3 forms. A Dp-1 form is most commonly used for vacant properties and provides the most basic coverage on a “named peril” basis.

    Additional Vacant Property Insurance Questions (Coming Soon)

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    Commercial Insurance

    Q: What Is Business Insurance?
    A: Business Insurance protects a company from losses due to events that may occur during the normal course of business. There are many types of insurance including coverage for property damage, legal liability and employee-related risks.

    Q: What type(s) of Business Insurance do I need?
    A: No two businesses are identical so it’s important to first understand the risk exposures associated with your type of business. Once identified you can then outline the types of insurance needed to provide adequate coverage. In almost all types of businesses you will need general liability, commercial property insurance if the building is owned, business personal property for equipment, furniture, etc… , and worker’s compensation coverage if you have employees. There are additional coverage options such as inland marine, cyber liability, professional liability which can also be purchased to cover any gaps in coverage. We suggest speaking with an agent to determine what coverage your business needs.

    Q: What Does General Liability Insurance Cover?
    A: General Liability protects business organizations against liability claims for bodily injury and property damage arising on premises from operations, personal injury, and other potential losses that can arise from business operations.

    Q: What is a Waiver of Subrogation?
    A: A Waiver of Subrogation is an agreement between two parties in which one party agrees to waive subrogation rights against another in the event of a loss.  This is most common in contractor policies where there are General Contractors & Sub Contractors involved & is in place to prevent one party’s insurer from pursuing subrogation against the other party. Typically, insurance policies do not bar coverage if an insured waives subrogation against a third party before a loss. However, coverage is excluded from many policies if subrogation is waived after a loss because to do so would violate the principle of indemnity.

    Q: What Is a Business Owner’s Policy?
    A: A business owner’s policy (BOP) is a package policy geared towards small to medium sized businesses which combines liability, business interruption, and commercial property insurance coverage.

    Q: How do I protect my business property while being transported?
    A: To cover property in transit you will need to purchase an inland marine policy. In many cases an inland marine policy will cover all types of property regardless of location, these policies are also sometimes referred to as floaters. Depending on the type of property you may be required to write a separate type of floater such as an equipment floater, or tool floater.

    Q: I put my company logo and contact info on my truck, do I need commercial auto insurance? 
    A: Short answer is yes. Though certain business activities are allowed under a personal auto policy, the moment you put signage on your vehicle you will need to place the vehicle on a commercial auto policy. Once on a commercial auto policy you do have the option of selecting personal & business use for the vehicle but you will need to list all drivers of the vehicle on the policy or be the sole driver of the vehicle.

    Q: Our company sells product online and keeps client information on a private server, is there coverage options available for data breach?
    A: Every year there are more and more online businesses launching and it has created a unique set of risk exposures such as data breach, destruction of critical data, and identity theft. Insurance carriers are now offering cyber liability insurance which extends coverage for these types of exposures and more. Much like general liability, cyber liability is becoming a new standard for any business with an online presence. If you would like to learn more about this valuable coverage option contact us today.

    Additional Commercial Insurance Questions (Coming Soon)

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