Frequently Asked Questions

General Questions

How do I decide if a higher deductible is right for me?

Have you ever wondered if you should have a higher deductible? You’ve probably asked yourself “How do I know if it makes sense for me?” Whether you want to save money on insurance for your cars, home or business, there is a logical method to see if the odds are in your favor. If you have a $250 deductible and are considering a $500 deductible, simply take the increased out-of-pocket expense and divide your savings into that number. So, if your savings for the higher deductible is $75 per year, divide this into the additional $250 out-of-pocket amount, the result equals 3.33. This 3.33 number represents your break even point in years. This means that one claim every 3.33 years and you have neither lost nor gained anything, but longer than 3.33 years and you are benefiting by the higher deductible.

Auto Insurance

Car Insurance 101: Roadside Assistance, Loan/Lease Payoff, and Rental Reimbursement

Roadside Assistance coverage: With Roadside Assistance, we pay for towing services when your vehicle breaks down due to mechanical or electrical issues, a dead battery, a flat tire, a lock-out, or if you run out of gas. Loan/Lease Payoff coverage: With Loan/Lease Payoff coverage, also known as Gap coverage, we pay the difference between the settlement amount and the amount you owe your lender if we total your vehicle. If you lease your vehicle or have a loan, you can buy Loan/Lease Payoff coverage. Rental Reimbursement coverage: With Rental Reimbursement coverage, we pay for your rental car while your vehicle is being repaired. You can buy Rental Reimbursement if you have Comprehensive and Collision coverage. We’ll pay for 30 days of rental, up to the maximum per-day amount shown on your Coverage Summary.

Car Insurance 101: Uninsured/Underinsured Motorist

Uninsured Motorist (UM) coverage: With Uninsured Motorist coverage, we pay medical expenses, lost wages, and pain and suffering when you’re in an accident caused by a driver who has no insurance to cover these expenses. We pay up to the limits you chose when you bought the policy. Underinsured Motorist (UIM) coverage: With Underinsured Motorist coverage, we pay the under the same guidelines as Uninsured Motorist coverage, but with one variation. This coverage pays for an accident caused by a driver who has insurance, but doesn’t have enough insurance to cover your expenses. We pay up to the limits you chose when you bought the policy.

ATV Registration – Is it Required?

The Ohio legislature enacted a statute in 2009 which affects the registration requirements for all-terrain vehicles (ATVs). As a recap, all ATVs were required to be registered with the State of Ohio Bureau of Motor Vehicles effective July 1, 2009. In addition, ATVs were required to display a license plate and validation sticker effective July 1, 2010. The only exemption to this legislation was for ATVs used strictly for farming. At the time this legislation was announced, guidelines from the BMV indicated that financial responsibility requirements did not apply unless the ATVs were operated on public roads. However, the BMV has reversed this stance and is requiring owners to complete an affidavit of financial responsibility when they register and license an ATV. At this time, we want to advise our clients to have appropriate coverage for all-terrain vehicles. This means that all ATV’s MUST carry an ATV/motorcycle insurance policy. We have sent EMail newsletters and posted information on our Facebook and agency website attempting to notify as many clients as possible. If you have any questions or concerns regarding this matter, please contact your assigned underwriter for more information.

My son wants to take a part time job delivering pizzas, will my auto policy cover him for driving my car?

This type of use of a vehicle is exactly the opposite of what insurance is intended to cover. It depends on the insurance company and what the contract says. Some insurers have very strict exclusions governing the use of a family car for business use of any kind and will deny claims associated with the delivery. Delivery of anything is typically prohibited. The best answer is to either have your child get a different job or insure the car with a commercial policy. Do not use your cars for delivery.

Is the DVD player in my minivan covered on my auto policy?

This really depends on the insuring company. Most auto policies exclude coverage for sound receiving and transmitting equipment, including electronic equipment installed in a location other than the manufacturers designed location. It is alway a good course of action to check with us if you have any doubt, particularly since industry standard auto policies are not commonly used. In any event, coverage may always be added by endorsement.

What is GAP coverage?

When you buy or lease a vehicle and pay for it over time, the possibility exists that you may owe more than the car’s actual value. A standard auto insurance policy provides coverage for loss or damage on the basis of the vehicles actual cash value. In this instance, a total loss to your vehicle means that you would owe more to the finance company than you would be able to collect from the insurance company. Gap coverage fills the gap between what you owe and what the car is worth. Some leasing companies include this coverage at no charge, other times, the car dealer will add it as an option to the sale price. When the dealers secure this coverage the pricing tends to be very expensive. In fact, I have seen dealers charge more than 20 times the cost of securing coverage through your auto insurer. Never-the-less, you should always make sure you have Gap coverage, whether it is through the finance company, dealer or your auto insurance carrier.

If I get a star chip in my windshield, do I have to pay my deductible to have the windshield repaired?

In most cases, but not always, the insurance companies pay for the chips to be fixed since it saves you and them money. If the damage is to the extent that the glass must be replaced then your Comprehensive, or Other Than Collision deductible will apply.

My driving record has cleared up now, can I get a better auto insurance rate?

The majority of insurance companies review your driving record upon each renewal. Insurers typical look at a three-year history, although some insurers review the past five-years. This means that your current insurer is monitoring the driving record of your household members and adjusting the rates upon each renewal.

Whose insurance pays if I loan my car to a friend?

Insurance does still follow the car. This means that if I loaned my car to someone else and they have an accident that was their fault, my insurance will pay for the damages for which the driver of my vehicle is responsible. However, some insurers are now writing policies that make them secondary to any other valid insurance. Other insurers limit the amount of liability coverage available for operators who are not specifically listed as a driver on your insurance. The implications of this one sentence means that the driver of your car may not be able to rely on your insurance. Bottom line ……. we recommend that you not loan your car to others unless they have their own insurance and a valid driver’s license.

Should I call you to add a new car even though the dealership said that they would call you?

Absolutely. It is not the dealers responsibility to call us to add a vehicle to your insurance. In fact, numerous times we have seen situations where a car was uininsured for a period of time because the insured relied on the dealer to call. In fact, only the insured to the policy is authorized to call in a change.

I’m buying a newer vehicle during hours you are closed, am I covered even though I can’t call immediately to add it to my policy?

You are protected for liability automatically, subject to the reporting time limitations in the policy. If the newly acquired vehicle is replacing a presently insured vehicle then coverage does vary by insuring company. Some insurers only provide coverage for the newly acquired auto with the same coverage as the vehicle you are replacing. Other insurers provide coverage for damage to the newly acquired auto with the broadest coverage applicable to any of your presently insured autos, as long as you request we insure the newly acquired vehicle with physical damage coverage within 4 days. A safe rule of thumb is to personally call us prior to your plans to take delivery of the newer vehicle, and/or personally access our website and send an email from our “contact us” page while still at the dealer’s location and then print and retain a copy of this email. You should then immediately follow-up with a personal phone call to our office the next business day.

I have a company car which I also use for personal trips. If I’m involved in an accident while on vacation in a company car, whose insurance pays? Mine or the company’s?

This is one of the most overlooked exposures faced by people who have a company car. To cover yourself in this situation you need to add a coverage to your policy called “extended non-owned coverage.” The cost is minimal. If you have a company car, give us a call and we’ll add the coverage.

I am going on a vacation to Canada. I’ll be driving. Do I need anything special to drive in Canada?

Your insurance protection does extend to the continental U.S. and Canada. Beyond knowing you are insured, you will also need a valid passport and a Canadian car insurance ID card. Be sure to contact our office to obtain your insurance card before traveling to Canada.

My child is getting their temps, when do I add them to our auto policy as a driver?

Most insurance companies allow you to add them to your policy once they obtain their permanent driver’s license. However, some insurers require the new driver to be added as soon they receive their temps. Please give us a call to discuss further.

Can I let anyone drive my vehicle?

Any licensed non-household driver can operate your vehicle with your permission and be insured under your policy. We do have an article titled “Who’s insurance pays if I loan my car to a friend” that you will need to review since there is much helpful information on that response. You will need to be careful who you allow to operate your vehicle, particularly if that person has a suspended license. In this case it is conceivable that your vehicle may will be impounded.

When renting a car do you advise I buy the insurance from the rental agency?

If you have ever rented a car, you surely have been faced with the question of whether or not you need to purchase the insurance from the rental agency. Several coverage issues need to be considered here, including injury to others or damage to their property while driving the rental car, as well damage to the rental car itself. First, the liability coverage from your insurance will automatically transfer to the rental car; Second, if you have comprehensive (other than collision) and collision on at least one insured vehicle, then these too will transfer to a rental car. The rental car agency will happily obtain a copy of your insurance identification card, take your credit card information, and let you go on your merry way. If you are like most people, you probably pay little attention to the rental details. After all, who wants to stand at a rental counter and read all of the fine print? Just in case you didn’t read it, please let me speak to what the typical rental agreement includes that you may have missed. In the event the rental car is damaged while in your possession, regardless of fault, it will likely be out of service while it’s being repaired. During this time the rental car company will not be able to continue to rent that vehicle. Because the rental agreement makes you responsible for all damages to the car while in your possession you are suddenly responsible for not only the actual repairs, but also for the rental company’s inability to rent the car while its being repaired. Now, remember the fact that your insurance company will extend coverage for that rental car just as though you were driving your insured car. This is good, except that your insurance may not have any provisions for the loss of use charges that the rental car company is now requiring you to pay. If you purchased the rental car company’s insurance, you get to walk away without having to pay your deductible or deal with the loss of use charges. There is one other consideration for dealing with your deductible and the resulting loss of use charges, but it’s an issue that will take a little effort on your part to discover. Some of the higher end credit cards include coverage for such expenses as first dollar deductible and loss of use charges. The only way to know for sure what the terms and conditions of your credit card provides is to call them and discuss what benefits are available to you. The other key issue to consider is a fairly new one over the past several years, that issue of diminished value. This means that if the rental agency has to sell the car at a reduced value because of substantial damage, you may be responsible for this loss of value. I have seen cases where this added up to nearly $10,000. The real aggravation is that you are responsible for this reduction in value even if the accident was not your fault. Should you purchase the insurance from the rental car company? That’s a decision that is 100% up to you but we recommend purchasing the insurance from the rental company.

Business Insurance

I have a company car which I also use for personal trips. If I’m involved in an accident while on vacation in a company car, whose insurance pays? Mine or the company’s?

This is one of the most overlooked exposures faced by people who have a company car. To cover yourself in this situation you need to add a coverage to your policy called “extended non-owned coverage.” The cost is minimal. If you have a company car, give us a call and we’ll add the coverage.

What is an insurance premium audit?

A premium audit is a condition of most business insurance policies and helps insurers to confirm the actual exposure basis used in determine the liability premium. For example, two manufacturers in the same community both make identical products. The first manufacturer has annual sales of $10,000,000 and the second manufacturer has annual sales of $100,000. The gauge of work output in this example is the sales that each manufacturer generates. The manufacturer who does $10,000,000 of sales is 10 times more likely than the smaller manufacturer to have a claim related to their product. It therefore stands to reason each of these manufacturers should pay a premium based upon the actual amount of work they produce. When an insurance policy is written, certain assumptions are made in regards to their liability premiums such as how much work output they will generate over the course of the next 12 months. The way we calculate premiums exposures may include based upon sales, payroll, area, cost, etc. The premium audit process functions to determining what the actual work output was for a given business during the most recent policy term. This audit process may be conducted in several different ways, including phone verification of records, a physical audit consisting of examination of your books and records, or a report completed by the insured. To read more click Subject To Audit. Another helpful article is titled Seven Ways To Reduce Your Insurance Costs At Audit. To read more click Subject To Audit. Another helpful article is titled Seven Ways To Reduce Your Insurance Costs At Audit.

Home Insurance

Home Insurance 101: Back-up of Sewers and Drains

Backup of Sewers and Drain coverage is an optional endorsement which provides protection for your dwelling and personal property losses caused by water that backs up through a sewer or drain pipe. Coverage also applies from water that has entered into the area from a sump pump that has overflowed. For example, the sewer backs up through your drain pipe, releasing water into the basement and ruining furniture, clothing and children’s toys. The damage is covered, less your deductible. There is a limitation in coverage, equal to the limit listed on your homeowner declaration page (ie $10,000). McMichael Insurance recommends you carry Back-up of Sewers or Drains when your lowest level is finished, which includes slab homes and finished basements.

My child is going away to college. Do I need renter’s insurance for them?

Insurance coverage and amount of insurance for college students away at school do vary by insurer. Some will give you an amount equal to 10% of your personal property limit for off-premise locations. Others limit the coverage to dorm rooms only. Ideally, if your student is going to rent an apartment, or is away at school, it may be necessary for them to have their own renter’s insurance. Another consideration to consider is liability. The question of whether the residence of your student is an insured location is key here. Please check with one of our profesisonals to obtain sound advice.

How often should I have my valuables or jewelry appraised?

We suggest that you have your valuable items appraised at least every 5 years. This will help keep their values up to date. If your valuables appreciate rapidly then more frequent appraisals are recommended.

How much coverage do I have if my trees are blown down in a wind storm?

All homeowners policies exclude coverage for wind damage to trees. However, they do provide up to 5%, or $500, for debris removal of trees if they damage a covered structure.

If my neighbor’s tree falls on my house, whose insurance covers the claim?

Your policy includes coverage for direct damage to your home. This means that we will pay for damage to your home, regardless of whose tree caused the damage. If there is a determination that your neighbor bears some responsibility for having a knowingly unsafe tree on his premises, your insurer may pursue collection from your neighbor for money they paid on your behalf.

Do I need Sewer or Water Backup Coverage?

Our standard recommendation is to always include some amount of coverage for Sewer or Water Backup. Today, with all of the new homes and shopping centers being built, there is a lot of pressure on the existing sewer systems to handle the run-off water during and after a rainstorm. When the system can’t handle these volumes of water, the next possible outlet just may be your home. While this cause of loss is excluded in the standard homeowners policy, we may be able to add Sewer or Water Backup. This coverage is particularly recommended if you have a finished basement, store personal belongings in your unfinished basement, or have a furnace, hot water tank, or other appliances that may be susceptible to loss.

Why is my Homeowners Insurance limit more than my home’s market value?

I appreciate your comment about your home being insured for more than its present worth. Please remember that when establishing a replacement value for the home we are, in actuality, dealing with the homes “reconstruction” cost. I am keenly aware that the economy is tough and we are all trying to make sure we are not paying more for products and services than necessary. However, by allowing us to insure your home for its reconstruction cost we are able to establish a value that, as accurately as we can ascertain, will provide enough protection for your home and prevent you from having to pay large out-of-pocket sums at the time of a claim. I have attached an article from The New York Times that explains the issue of replacement cost in more detail. You may want to read the article to get a handle on the issues that I am relating here. Please keep in mind that the article is a little dated, but the argument is conceptually the same. NY Times – Homeowners Come Up Short On Insurance

Claims

How does Claim Optimization and Claim Dispute Resolution help me?

Simply put, this means making sure you receive everything that is owed to you. I recently sent the following note to a client to make her aware we are working for her. It reads “I received a call from the adjuster today and am working to help her understand how coverage is structured and what should be paid in your case. My argument is sound and I expect no problems, but I just wanted you to know I am working all the angles to make sure your claim settlement is optimized and your deductible outlay works to the best of your advantage.” The adjuster was claiming that several items were not covered and that multiple deductibles applied, which I promptly disputed and demonstrated with copies of the policy and my interpretation. The result is a happy ending. Our insured received a claim settlement and only incurred one deductible instead of a potentially three deductibles. Claim Optimization, or Claim Dispute Resolution means satisfied customers.