Insurance FAQ's

Insurance is the best gift you can to your family & yourself. Its like a protection racket that will help you in unpredictable crisis.

Here are some questions & their answers that can help you in understanding insurance:

1. Why should I do financial planning?

Life is uncertain and it is not possible to predict exactly the different events that can occur. However, there is always a need to earn income to support yourself and your dependents. Financial planning is required to understand the impact of different events on our lives and on the quality of life for our families. It is like scenario building and understanding what financial requirements we would have at various stages in our lives and hence trying to reduce the financial risks that we are exposed to by proactively taking steps to guard against at least some of these risks. These could include buying insurance cover, investing in mutual funds, fixed deposits or government bonds etc.

2. Why should I buy insurance?

It can take years and a great deal of hard work and money to acquire your family’s personal possessions. Where would the money come from to replace your property if it were destroyed? What would you do if a court ordered you to pay thousands of dollars because of damage to someone else’s property or injury caused by you. Insurance policies protects you against financial loss when these kinds of personal disasters happen. And they happen to people just like you every day.

3. Will filing one claim on my homeowners insurance cause my rates to go up?

No. In most cases, once an insurer reviews your loss history and finds none, one claim should not affect your rates. If the claim exposes some greater risk on your property, however, such as owning a trampoline or new swimming pool, then you may face a rate increase. For more details, see One home insurance claim? Not a problem!

4. Can I insure my parents' home for them?

No. You have to own the property that you insure. However, there are two ways for you to take charge of paying for the insurance premiums on your parents' home. Your name can be added to your parents' homeowners insurance policy as an additional insured, and then their agent could request that the bills come directly to you. Or, you could ask that the bills simply be mailed to your address.

5. I already have life insurance policies. What should I do?

Your need for protection is not fixed – as life progresses, there are new developments that happen and these developments impact the extent to which you need protection. Hence the requirement for life insurance should be reviewed periodically and if there is a shortfall, it should be covered as soon as possible by buying additional insurance cover. You should consult your financial advisor / insurance agent if any events similar to the ones mentioned above have happened to evaluate if your need for protection has changed.

6. Can I get a loan against my insurance policy?

Insurance companies / Banks have different guidelines for different products when it comes to allowing you the facility to get a loan against your policy . Usually, the facility is available, but you should check the policy terms and conditions carefully.

7. Do all insurance companies use insurance scoring?

More than 90 percent of insurers use some form of insurance scoring. In addition to an insurance score, Erie Insurance also considers other underwriting factors. For example, your auto insurance premium is based on criteria such as your driving record, the type of car you drive and how far you drive. Your homeowners premium is based on the cost to replace your home and the distance to the closest fire department, among other factors. Insurance scores are just one factor Erie Insurance uses to determine your rate. Like all insurers, Erie Insurance cannot deny an applicant insurance coverage based solely on an insurance score.

8. Do you need auto insurance when you have a learner's permit?

Your parents need insurance on the car, or anybody you drive with over the age of 25 needs car insurance on their car. You do not need insurance until you receive your own license and car.

9. Why do rate quotes vary depending on the insurance company?

An insurance company’s claim experience, the types of people they insure, and cost for doing business vary from company to company and may cause rates to differ - even by hundreds of dollars.

10. Are other people who drive my car insured under my insurance policy?

To ensure coverage, you should list those individuals on your policy who regularly use your car. However, in general, those who are given permission to drive your car are covered.