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Frequently Asked Questions

General Insurance Questions

How can I get an insurance quote?

Auto Insurance Questions

What does the State require me to have regarding auto insurance?
Texas requires all drivers to prove they are financially able to pay for damages they do to others. Most drivers achieve the proof by purchasing auto liability insurance. The minimum limits the State will allow is $30,000 per injured person (up to $60,000 for all people hurt) and $25,000 for damages to others’ property. Insurance people will refer to this as: 30/60/25. Please consider higher liability limits. Many accidents result in much higher claims. If your vehicle is financed or leased, your lien holder will require you to have two other auto insurance coverage: collision and other than collision (commonly called comprehensive).
What does full coverage mean on my auto insurance?
The term “full coverage” is misleading. All insurance policies will have limitations, exclusions and special conditions so we do not use the term “full coverage”. The most common coverages available by insurance companies are:

  • Liability – Required by the State.
  • Personal Injury Protection – Required to be offered to you by your agent.
  • Uninsured-Underinsured Motorist – Required to be offered to you by your agent.
  • Medical Payments – May be used instead of Personal Injury Protection.
  • Other than Collision – Required if you have a lien holder.
  • Collision – Required if you have a lien holder.
  • Rental Reimbursement
  • Towing and Labor
Do I need comp or collision on my auto?
Comp (now called “other than collision”) and collision protect your vehicle from damage. If you are still making monthly payments on your vehicle, you generally do not have a choice. Your lien holder will insist that you have these coverage.

The personal auto policy has a loss settlement basis of actual cash value. If your vehicle is damaged the insurance company will pay you a depreciated amount for your vehicle. Once your vehicle gets ten years old or has excessive mileage, you may want to consider not having any physical damage coverage on your vehicle. The depreciation will be severe. As a result, the premium for collision and other than collision coverages may not be a wise insurance purchase.

If I rent a car, do I have coverage for the rental car?
Maybe. Currently there are over twenty different personal auto policy forms being sold in Texas. Some policies include the coverage for rental car contracts under the liability section of the policy. Others do not.
Can I insure my motorcycle on my auto policy?
Probably not. Motorized vehicles having less than four wheels are specifically excluded on most of the policy forms.
Which car is the cheapest to insure?
Each vehicle is assigned a symbol. The higher the symbol, the higher the premium. An excellent symbol is 7 and a symbol over 20 is expensive. The lower symbol vehicles are the least expensive and they are generally conservative models.
Do I have coverage in Mexico?
You may add an endorsement for limited Mexico coverage on you auto policy, but we strongly recommend you purchase a temporary Mexico policy instead.

Homeowners’ Insurance Questions

What are the types of homeowners insurance?
Currently the majority of the insurance companies are selling one the following four forms:

●  Homeowners Form-B
●  ISO Form 3
●  Enhanced Homeowners Form-A
●  Homeowners Form-A

The Homeowners Form-B and the ISO Form 3 are similar and have the broadest coverage. There are other forms for renters, dwelling fire, etc

Is it bad having a separate windstorm policy?
No. In some cases the premium is lower by having a homeowners policy and a windstorm policy. Warning: The windstorm policy has a deductible for the dwelling and a deductible for the personal property. You need to compare the 1% deductible windstorm policy to a 2% wind deductible with the homeowners policy.  Another disadvantage to the separate windstorm policy, is some windstorm and hail policies do not include loss of use (also called additional living expense) coverages.
Do I need to have windstorm inspections on my new roof?
The windstorm inspection (WPI-8) on a re-roof is free. If you live in a county that borders the Gulf of Mexico (tier 1), have your roofer get the inspection. You do not know what the insurance company’s requirements will be in the future. Currently many companies exclude the windstorm and hail perils in the coastal counties. The perils can be insured through the Texas Windstorm Insurance Association (TWIA). The TWIA requires all roofs newer than 1988 to have a WPI-8 filed with the State. If you do not get the inspection done during the re-roof process, there is a charge for an inspection after the roof is finished. In an effort initiated by the State of Texas to depopulate the TWIA, you may acquire a wind & hail policy through several insurance companies. Generally, the policies are identical in wording with a lower premium.
DOES MY MOBILE HOME INSURANCE COVER FLOOD?
Depends. Some of the mobile home policies are written on a revised personal auto policy form. As a result, the flood peril is covered in the policy, unless the peril of flood is specifically excluded by endorsement. Other companies use a dwelling form. As a result, the peril of flood is excluded. Ask your agent to be sure.

Life & Health Insurance Questions

How much life insurance should I purchase?
Every situation is different and there are numerous methods of determining the correct amount of life insurance. If replacement of income is a concern for a family, the easiest method is 10 to 12 times the individual’s income minimum. You should also make adjustments for large debt, low income, and anticipated changes in responsibilities scenarios.
What type of life insurance should I purchase?
There are a tremendous number of life products available. Each product has a purpose. If your primary interest is death benefit and you know how long you will need the life insurance, look at level term insurance. It is very affordable. Young people should have a minimum of $100,000. In many cases the cost is under $10 per month. If your need is for a period that will extend beyond the age of 70 or you value having options in the future, peruse index universal life. WARNING: Be extremely careful. Be sure you acquire a life insurance policy that has strong guarantees. Many have poor guaranties and you can lose cash value and your protection.
Is there good cheap health insurance?
Due to the Affordable Care Act there are no good cheap individual health insurance plans. There are several good health insurance policies coverage wise. None of them would I consider cheap or affordable. If the premium is the utmost factor we recommend the following:

  • Choose a plan the does not compromise the integrity of a major medical policy. Do not consider the short-term medical policies for long term.
  • Choose the highest deductible you can withstand.
  • Warning: Be sure to check the policies’ out-of-pocket maximums.
  • Warning: There are poor policies being sold. If the proposal is too good to be true…
Which Medicare supplement plan is the best?
When you become eligible for Medicare you have six months of guaranteed insurability with Medicare supplement carriers. Your situation should dictate your choice. Most of our clients prefer the following plans in no particular order:

  • Plan F
  • High Deductible Plan F
  • Plan G

Before you make a choice, you need to know the financial rating of the company and the current premium at age 65 and at age 85. You want to avoid the insurance companies that have a large difference in the age 65 and age 85 premiums.  If you want out of hospital prescription drug coverage, you should get a Part D Prescription Drug Plan.  WARNING: The Part D plans have a different enrollment period.  The other option is a Part C Medicare Advantage Plan.  The best advice is to contact a professional insurance agent.  The senior health insurance market can be very confusing.

When should I purchase long term care?
The perfect time to purchase any insurance is a day before you need the coverage. Unfortunately that is an unrealistic response. Since the premiums are significantly lower for people under the age of 60, prior to age 60 would be wise. Earlier is even better.  The statistics regarding long care are staggering. The need for this product is tremendous.

Business Insurance Questions

Am I required to purchase workers' compensation insurance?
Texas is one of the few voluntary states. As a result, businesses are not required to buy workers’ compensation, but the laws certainly favor the purchase. If you do not purchase workers’ comp, then you lose your common law defenses regarding any employer liability suit. Basically, this means you lose in court if an employee sues you.
HOW CAN I MAKE SURE I AM BEING CORRECTLY CHARGED FOR MY WORK COMP POLICY?
The workers’ compensation policy can be one of the most difficult policies to properly rate.  If you have numerous class codes, an experience modifier, claims in the past 5 years, or multiple businesses, you should have your work comp policy checked by an agent that has been specifically trained in the work comp audit process.  Very few agents have adequate training or knowledge.  At Independent Insurance Counselors (281-331-3131) ask for Mike Lansford.  Mike is a Certified WorkComp Advisor.  Mike has witnessed errors over $100,000.
Can I insure a vehicle I use in business on my personal auto policy?
The State rating guidelines allow commercially used vehicles to be placed on a personal auto policy. The limiting factor is the underwriting guidelines set by the insurance companies. Many carriers will allow a light weight truck used in a low risk business (realtor, accountant, certain artisan contractors, etc.) to be included. We do not know of any carrier that will allow a fleet or large vehicles to be placed on a personal auto policy.

Mike’s Home Insurance Tip

One of your biggest investments is your home. Be sure you have adequate insurance coverage. The homeowner's policy excludes the flood peril. Some of the statistics are alarming:

1. The average 30-year mortgage has a 1% chance of a fire and a 26% chance of a flood loss.

2. Over half of all recent flooding events have occurred in flood zones B, C, or X.

3. Over 90% of all disasters involve flooding.

4. Federal Disaster Assistance is a loan that must be paid back.