Insurance FAQ

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What is Auto Insurance ?

Auto Insurance
Automobile insurance protects you from financial losses such as vehicle repairs, medical bills, and legal services that could result from an auto accident.

Illinois law (625 ILCS 5/7-601) requires all motor vehicle owners to have minimum amounts of auto liability insurance. In addition, lending institutions may require physical damage insurance to protect their interest in a financed vehicle.

Required Auto Insurance Coverages
Liability Coverage - Pays for bodily injury to another person or property damage you cause due to the negligent operation of a vehicle. It may also pay if the accident was caused by a member of your family living with you or a person using your vehicle with your permission. The coverage may also pay for a legal defense if you're sued because of the accident. Liability coverage is often split into two separate coverages:

Bodily Injury (BI) - Pays for costs due to injury or death to a pedestrian(s) or person(s) in another car. It may also cover your passengers' injury costs as long as they aren't members of your household. Illinois law (625 ILCS 5/7-203) requires BI limits of at least $20,000 per person per accident and $40,000 total per accident.

Property Damage (PD) - Pays for damage to another person's car or property such as fences, buildings, utility poles, signs, and trees. Illinois law (625 ILCS 5/7-203) requires PD liability limits of at least $15,000 per accident.

Note: You may want to consider buying higher limits because the state minimums may not be enough to fully protect you from lawsuits. Many vehicles today are worth more than $15,000 and medical bills for injuries could easily exceed $20,000 for one person. If you are found negligent in an accident and the damages exceed your insurance limits, you can be sued in court for those amounts not covered by your insurance. Uninsured Motorist Bodily Injury Coverage (UM) - Covers you for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto liability insurance. Currently, Illinois law (215 ILCS 5/143a) requires uninsured motorist limits of $20,000 per person and $40,000 per accident. For additional premium, you may buy higher limits to pay for claims that exceed those amounts.

Underinsured Motorist Bodily Injury Insurance (UIM) - Pays the difference between your UIM limits and the liability limits of the at-fault driver, if lower than your UIM limits. Illinois law (215 ILCS 5/143a-2) requires this type of coverage if you purchase higher limits of uninsured motorist bodily injury coverage (UM).

Other Coverages That May Be Required
Physical Damage - Pays for damage to your auto. You may have to pay for part of the loss, called a deductible. Deductibles can range from $0 to $1,000. Illinois law doesn't require physical damage coverage, but your lender may. Depending on the value of your car, you may decide the cost of physical damage coverage is not worth it. Physical damage is split into two separate coverages:
Collision coverage - Pays for damage caused by an accident with another car or fixed object (such as a tree).

Comprehensive coverage - Pays for damage caused from most other causes, such as theft, fire, hail, etc.


Optional Coverages for Additional Premium
In addition to the required coverages, you can buy optional coverages for extra premium. Accidental Death Benefit - Pays a death benefit if the insured dies because of an auto accident

Custom/Non-Factory Equipment - Covers customized features found in conversion vans, as well as tape decks, CD players, CB radios, cellular phones, etc. added after the vehicle left the factory.

Gap Coverage for Leased or Financed Vehicles - Pays the difference between your vehicle's actual cash value and what you still owe on your loan or lease.

Medical Payments - Covers medical and funeral expenses for you or your passengers if injured or killed in an accident in your vehicle. It also covers you and your family members if struck by a vehicle while walking or while riding in another vehicle. This coverage pays even if you cause the accident.

Physical Damage/Repair/Replace Coverage - Pays for a new vehicle if the cost to repair your vehicle is more than the value of a new car. The endorsement is usually available only during the first three model years.

Rental Reimbursement - Pays a specific amount per day (e.g. $15) to rent a vehicle while yours is being repaired due to a covered loss.

Towing - Pays all or part of the cost to tow your disabled vehicle to a repair shop.

Uninsured Motorist Property Damage (UMPD) - Covers damage to your vehicle caused by an identified, at-fault, uninsured driver. If you don't' have collision coverage, this coverage is available for a maximum of $15,000 and subject to a $250 deductible.


Factors That May Affect The Premium
Rating factors are characteristics that place you in a group of drivers with similar risk-related characteristics. Companies set a rate for each group based on the claims paid for the people in that group.

Hundreds of companies sell insurance in Illinois and prices can vary greatly. Some factors companies use to set the cost include: Age, gender, and marital status - Statistics show certain groups of drivers (for example, young unmarried males) have more accidents. A higher chance of loss means more premium.

Coverage limits - The more insurance you buy, the higher the premium will be.

Driving record - Drivers with accidents and tickets usually pay higher premiums than those with good driving records.

Household driving information - The ages and driving records of other drivers in your household may affect the premium. Most auto insurance policies cover family members while driving your car. You may jeopardize your coverage if you withhold this information.

Location - Since heavily populated areas have more traffic, thefts, and vandalism, city drivers may pay higher premiums than rural drivers.

Type of vehicle - Certain vehicles cost more to insure because they're more likely to be damaged in an accident, cost more to repair, or are frequently stolen.

Use of vehicle, how far you drive to work, and annual mileage - Drivers who commute long distances or drive more miles per year may pay more than those who commute shorter distances and drive fewer miles per year.

Credit history - Companies may consider your financial stability and charge higher premiums based on your financial status (i.e., credit card history, amount of credit, how timely you pay your bills, etc.

Discounts That May be Available
 • Anti-theft devices - Given on your comprehensive coverage for devices that deter theft or vandalism.
 • Auto/home packages - Given if you buy your auto and homeowners policies from the same company.
 • Car pool - Offered to those in a shared-vehicle car pool.
 • College student away from home - For college students who attend school over 100 miles away from home if no vehicle is taken along.
 • Defensive driver - Given to drivers over the age of 55 who have passed an approved defensive driving course.
 • Good driver - For policyholders who maintain good driving records.
 • Good student - Offered to young drivers who maintain a "B" average or better.
 • Low annual mileage - For vehicles operated less than a given number of miles per year, usually 7,500.
 • Mature driver credit - Offered to drivers over a certain age, usually 50.
 • Multiple vehicles - Given when the same company insures more than one vehicle in your household.
 • Safety devices - Offered for such items as air bags, automatic seatbelts, and anti-lock brakes. Ways to Lower Your Insurance Costs Ask about discounts. The type and amount of discounts offered may vary by company. Some discounts affect a portion of your coverage; other discounts may affect the entire premium.
 • Take the highest deductible you can afford. If you raise your deductible, you may be able to significantly lower the price of coverage; but you will pay more out of pocket each time you have a claim.
 • Consolidate your insurance needs. If you have a need for more than one type of insurance, you may be able to obtain a discount by having all your insurance serviced by one insurance provider.
 • Maintain a good driving record. Moving violations and accidents may result in higher premiums. Be a law-abiding and defensive driver.
 • Choose your vehicle carefully. Some vehicles are more costly to insure than others. Contact your insurance producer or company before you make a final decision.
 • Keep a good credit history. Many companies are now looking at your credit information and may charge higher premiums for those with less than perfect credit profiles.

Should I put my teenager on a policy by themselves with lower limits to save money?
If your child is considered a dependent, he or she should be covered by your policy. An injured party may make a claim against parental assets if the at-fault minor carries insufficient insurance. Although the teenager can purchase his or her own insurance, the limits must match the parents for the above-mentioned reason. Please note the parent’s policy can still be surcharged for the youthful driver if the policy does not offer driver exclusion. Contact your agent to see if you insurance carrier offers this exclusion.
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Commercial Lines

Is the renewal of my insurance policy automatic?
Many policies written through Standard Companies do renew automatically. However, policies with specialized coverage and written through Excess and Surplus lines carriers do not renew automatically. Please contact our office if you have any questions.

What is Ordinance or Law Coverage?
Ordinance or Law Coverage is broken down into 3 parts as follows: Undamaged portion of building – A typical ordinance may state that you are required to rebuild the entire building after a loss of 50% or more of the building structure. Without this coverage, you may be required to rebuild the entire structure without any coverage for the undamaged portion of the building.

Demolition Costs
Will cover the costs of demolishing the portion of the building that was not damaged. Increased Cost of Construction – This is the part of Ordinance Coverage with which most people are familiar. It covers the cost of new codes that must be followed after a covered loss, such as adding sprinklers to a building that was not sprinklered.

What is Equipment Breakdown Coverage
Once called Boiler and Machinery, this policy provides coverage for pressure vessels, such as steam boilers, along with coverage for electrical injury and mechanical breakdown of heating, air conditioning and production machinery. 

Liability
Does my Liability Policy include coverage for Employment Practices such as Discrimination, Hiring Practices and Sexual Harassment?
The standard General Liability policy specifically excludes coverage for Employment Practices. However, coverage may be purchased on a separate policy.

What is Directors and Officers Liability Insurance?
Directors and Officers of a company have the responsibility to manage the business in compliance with the law and corporate structure. They may be sued for breach of corporate duties. The Directors and Officers Liability Insurance policy protects both the Corporate Entity and the individual Directors and Officers from actions brought against them for “wrongful acts”.

If I don’t get Certificates of Insurance from my sub-contractors, how will it affect my premium?
Workers’ Compensation
The premium for a Workers’ Compensation policies are based on payrolls. Without a certificate of insurance from a sub-contractor, the amount paid to that sub-contractor will be included as payroll and increase the premium. On Liability policies, the premium basis can be either payroll or sales. Again, if you do not obtain a certificate from a sub-contractor, those amounts will be included in your premium equation.

My Workers’ Compensation policy includes an Experience Modification. How is this determined and how does it affect my premium?
The Experience Modification is determined by comparing the Workers’ Compensation loss history of a company against the average losses for the same types of businesses. If the losses exceed the average, an Experience Debit is established. If the losses are below the average, an Experience Credit is established. Once the Experience Modification is determined, the Debit or Credit is applied to the current Workers’ Compensation premium equation.

What is Co-Insurance?
All insurance companies require that a building structure be insured to its true value. Since it is unlikely that the entire structure would be destroyed in a loss, many owners try to insure their property for less than its full value. The Co-insurance clause states that the property owner will “co-insure” the property if full limits of coverage are not purchased.

What is the difference between Replacement Cost and Actual Cash Value?
Replacement Cost is the cost to repair or replace property of the same kind and quality without deduction for depreciation. Actual Cash Value is simply the Replacement Cost minus depreciation.

Why has my premium increased so much?
There are a number of factors that are considered in the pricing of any insurance policy. One of those factors includes the General Economy. When the Economy is slow, insurance pricing goes up. This factor, along with many other pricing factors, has caused insurance premiums to rise during the past few years. Call our office and we will be happy to discuss your specific circumstance.

If my employee uses his own vehicle for company business, to what extent is my business insured should he have an accident?
In order to be covered for this exposure, you must purchase Non-Owned Automobile Liability.
This coverage protects your business against claims resulting from an accident involving a vehicle not owned by the business, but used for business purposes. For example, if any employee uses his or her own vehicle to visit a client and has an accident, the business will be protected from a liability loss. Non-Owned Automobile Liability does not include any coverage for the vehicle itself. It also will not cover the employee; only the business. The employee (and the business) should find coverage under the employee’s Personal Automobile Insurance Policy.

How do I determine the appropriate deductible to choose on my property insurance?
Deductibles apply to most Property Insurance Coverage, such a Buildings, Business Personal Property, Commercial Vehicles, etc. The deductible is the portion of risk you choose to self-insure. The insurance will not respond until after the loss exceeds the deductible. The higher the deductible, the lower the premium. You should choose a deductible that you can afford, comparing it to the premium savings. Are Computers automatically included in my property coverage or do I need to purchase separate coverage? Though most Commercial Insurance Policies include computers as part of the Business Personal Property, there are exposures to computer hardware, software, data and media that are not covered by the general property coverages. These include electrical injury or mechanical breakdown. We suggest that you purchase Electronic Data Processing coverage for all your computer exposures to make sure all of your exposures are covered.
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Bonds

What type of bond do you need?
There are two main types of bond products that people refer to when referring to “getting bonded”.
The first is a surety bond, The second type is a fidelity bond.
Which one you need. The answer is usually pretty simple. If there is someone requiring the bond of you, it is a surety bond, as there are then three parties. If no one is requiring the bond and you simply want to protect your own interests, it is a fidelity bond.

Surety Bond
A surety bond involves three parties: the obligee (typically the government), the principal (the business in need of the bond), and the surety (the bonding company backing the bond). There are thousand of  commercial surety bond types (e.g. Auto Dealer Bond,  ARC BOND, Broker Bond,  Mortgage Broker Bond etc.).

Fidelity Bond (Fidelity Policy, Employee Dishonesty Bond)
A Fidelity Bond protects an employer from employee theft. Usually, insurance companies and security firms are required to obtain a fidelity bond. Essentially a Fidelity Bond guarantees the employer's money and property in the event that an employee causes damage though negligent or a dishonest action.

Custom Bond
Subject to the specific terms of the bond, these bonds, guarantee the payment of the import duties and taxes, and compliance with regulations governing the entry into the United States of merchandise from foreign countries.

ARC BOND
Used by travel agents to guarantee payments for airline tickets. Bond guarantees that money collected by the travel agency for tickets sold by the agency will be forwarded to the proper airlines.
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Personal Lines

How can I lower my car insurance premium?
1. Avoid filing small, non-catastrophic claims. 2. Raise your deductibles. 3. Package your personal policies under one carrier to retain the multi policy discount. 4. Have your agent shop your coverage amongst other insurers.

Upon my sixteen year old obtaining his or her license, must I report this to my insurance carrier?
Technically, the answer is no. There is no policy provision requiring that you report the addition to your current policy. You will be required to add the youthful driver at the time you complete the next renewal questionnaire. From a moral perspective, it is proper to inform the insurance company of the new driver; an additional premium will be assessed upon notification.

Is my personal property covered away from home?
If scheduled, Personal Property is covered anywhere in the world. There may be limitations and exclusions, however. Contact your personal insurance representative to discuss this further.

Is my college student’s personal property covered on my policy while in a dorm or apartment?
Yes. If your child is still a permanent resident of your household, his or her property will be covered anywhere in the world. Please note some insurers limit coverage to non-resident children to twenty-four years of age. Please consult your agent.

What is Identity Fraud and is there coverage available on my homeowner’s policy?
Identity Fraud is the act of knowingly transferring or using, without lawful authority one’s identification with the intent to commit, aid, or abet any unlawful activity that violates federal, state or local law. Most insurance companies do offer identity Fraud coverage which provides reimbursement to a person associated with restoring identity and repairing credit reports, mail cost, attorney fees, phone calls, etc. Consult your agent if you’re interested in adding the coverage.

 Am I protected for mold on my homeowner’s policy?
Unfortunately, most insurance companies have either eliminated the coverage from their policies altogether or have limited amount of coverage for mold remediation if it is a result of a prior covered water damage claim. Consult your agent to verify coverage.

How can I lower my home insurance premium?
 1. Raise your deductible to the highest level of affordability. 2. Package your personal insurance with one insurer to receive package credits. 3. Consider installation of home security system. 4. Avoid filing small claims. Insurance should be viewed as a funding tool for costly or catastrophic claims.

 What is the most common cause for mold to form in my home?
If there has been water damage to your home and it has not been properly cleaned up or repaired where the damage occurred, mold can form.

Am I insured when operating a vehicle I do not own?
 In most cases the answer is yes. If you borrow an auto you do not own, the owner’s insurance will pay for liability, physical damage and medical payments claims if those coverages are purchased. You will be subject to their limits and could be at risk if they have not properly renewed their insurance.

Even so, if you purchase a Personal Auto Policy in your own name, it will cover you should the owner’s insurance fail to perform. It will not protect the owner as he/she should have had their own insurance in place.

If you do not have a Personal Auto Liability Policy or Drive Other Coverage provided by your employer, you would be 100% dependent on the insurance purchased by the vehicle owner.

How would you know if their limits are adequate or if the policy was renewed?
Insurers use a variety of tools to set the amount of insurance on the dwelling. For very large and expensive homes, these tools include actual appraisers who are sent to your home by the insurance company to determine its replacement value.

For homes valued at insurance purposes at $500,000 or below, typically agents are given software to use which is different for every insurance company selling home insurance. There is hardly any training on how to use the software properly but it must be used to calculate the maximum amount to insure the home. The agent asks the homeowner a series of questions, enters all the answers, and hits the calculate key. The software program ends up giving you a printout of how much the home should be insured for.

Once the value of the dwelling is determined, typically the rest of the coverage is based upon a percentage of the dwelling amount and is additional coverage. Companies use 10-20% for other structures, from 25% to 100% for personal property and up to 30% for additional living expenses. There are all kinds of variations and some policies can be fine tuned more than others.

Everyone I have ever sold home insurance to has always told me they wanted to be fully covered. I can't understand why the insurance industry hasn't figured out a way to solve the problem of underinsurance.

Most homeowners need to pull out their policies and carefully review their current dwelling and other coverage limits, understand how they were determined, and change them if they are not adequate.

How large of a physical damage deductible should I select?
Select the largest deductible you can comfortably absorb up to the point of diminishing deductible credits, normally at or below $1,000.Large fleets with geographic diversity can normally afford larger deductibles.

If a wind storm damages or uproots a tree in my yard, will my Homeowner's Policy cover the cost of the tree and the debris removal?
 No. Wind is not a covered peril for landscaping and trees. There would be no coverage for the tree or the cost to remove the debris. However, if the tree landed on your home, your policy would cover the damages to the house and there would be a limited dollar amount of coverage in the policy to "remove" the tree from the house.

 Do I need Flood insurance or Earthquake insurance?
Losses from Flood and Earthquake are excluded under virtually all Homeowner’s Policies. Loss from Flood and Earthquake, although infrequent, can be catastrophic. If you live in an area prone to floods or earthquakes, you should add coverage to your Homeowners Policy if possible. If not available from private insurers, there are government sponsored programs for Flood and Earthquake Insurance. In some cases, your mortgage company may require Flood Insurance.

Is my In-Home Business covered automatically under my homeowner's policy?
 Most times the answer is No. Your homeowner's policy offers a limited amount of business property coverage(typically $2,500 or less) but does not protect against Liability exposures that can result from business related matters. A separate in-home business endorsement should be purchased (if applicable) or a Business Owners Policy in order to provide the proper protection.
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Health Insurance

What types of health insurance plans are available?
There are several health insurance plan options offered. The most common among them include the following:
• HMO (Health Maintenance Organization) - a form of managed care that will only provide benefits if you use a physician / hospital within the plan’s network. You must select your physician at the time of enrollment and are required to see this physician for all care, or this physician must provide you with a referral to see a specialist.
• PPO (Preferred Provider Organization) – a form of managed care that allow you a greater benefit when you visit a physicians within the plan's network, but provides the flexibilty to go to any physician within the network without a referral, as well as to go outside of network at an increased expense to you.
• MSA (Medical Savings Account) allows individuals to contribute money to a special account on a pre-tax basis. The money is then used to pay future copayments and deductibles.
• POS (Point of Service) plans are similar to an HMO or PPO in that you have flexibility in your decisions about what physicians you would like to visit. If using an in network physician, it works the same as an HMO, however you also are given the flexibility of a PPO by having the option to go outside of network at an increased expense to you.
Some health insurance companies offer additional options or variations of the plans described above. Please contact our office for further details.

What is a deductible?
 A deductible is the amount of covered expense a plan member must pay before the insurance company will pay for any of the covered medical expenses. If your plan deductible is $500 then you will pay for the first $500 of your medical expenses before your plan will begin paying for covered medical expenses. Please contact our office for further details.

What is coinsurance?
Insurance companies share the cost of the medical expenses with the insured. The coinsurance is the percentage amount that the insured is required to pay for their 'share' of the cost of medical care. Please contact our office for further details.

What is a copayment?
 A copayment, often referred to as a copay, is a stated dollar amount or percentage that a plan member is required to pay each time a medical service is performed. For example, there is often a copayment for an office visit where you are required to pay a set amount, usually between $5 and $30, for each doctor office visit. This copay does not apply towards ones out-of-pocket maximum. Please contact our office for further details.

What are out-of-pocket expenses?
Out-of-pocket expenses consist of the following: annual deductible, coinsurance amounts, and any expense above the 'reasonable and customary’ charges. Please contact our office for further details.

What is Long Term Care Insurance?
Long term care insurance helps pay for expenses incurred when the insured individual acquires an extended illness, extended disability, or cognitive disorder and requires care at home or at an appropriate facility (e.g. nursing home). Please contact our office for further details.

Who needs Long Term Care Insurance?
Although most people assume that long term care is only for the elderly, in fact, everyone can benefit from a long term care insurance contract. The fact is that the younger you are when you obtain long term care coverage, the lower your premiums will be. Please contact our office for further details.

What is a Special Enrollment?
A special enrollment period is a time during which certain individuals are allowed to enroll in the plan even if they did not enroll when first eligible. The following are common reasons for special enrollment:• Covered under other insurance when first eligible for your employers health plan and had an involuntary loss of coverage - You and your eligible dependents must be allowed to enroll if you apply within thirty days after loss of the other coverage. • If you get married, have a baby, adopt a child or have a child placed with you for adoption. You, your spouse, and your dependent (through birth, adoption or placement for adoption) may be added to coverage, but must apply within thirty days of the marriage, birth, adoption or placement for adoption.
Please contact our office for further details.

Individual Policies:
Are companies required by law to issue and individual policy to anyone who applies?
No. Companies that offer individual coverage underwrite the application prior to the policy being issued. Underwriting takes into consideration, but is not limited to, the following: age, health status, occupation and certain hobbies. The company may issue the policy as applied for; issue the policy with certain conditions excluded for either a limited or an unlimited period of time; issue the policy with an a premium load for certain conditions; or decline to issue the policy. If a policy is issued other than as applied for, upon request, the company must provide the reason for their offer. Please contact our office for further details.
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IMG Visitor Health Insurance

 International Medical Group, Inc. (IMG) truly understands the needs of international citizens.
For more than a decade, IMG has provided medical insurance to individuals, families and groups who are living or traveling abroad.
Whether you need individual coverage for a vacation or group coverage for your employees in locations around the world, IMG has a product to meet your needs.

IMG does not sell directly, relying instead on a network of producers to promote its insurance products.
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NOTE: This information collected from various internet sources to answer the commonly asked questions. TarMee.com or Meenu Insurance Agency do not guarantee the above information to be correct. Please contact respective regulator agencies or insurance agents for any information.
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