Founders Insurance Agency FAQ

Personal Auto Insurance
Q:Does my credit score affect my insurance rates?

Yes. Several years ago insurance carriers discovered that there was a direct coloration between poor credit scores and higher levels of claims. Most insurance companies create an "insurance score" as part of their pricing and underwriting guidelines. The "insurance score" has a component of your individual credit rating built in to it.

Some insurance carriers place more weight on personal credit than others in terms of their pricing. There are very few insurance carriers today that don't participate in some scoring level.

However, unlike some other states, insurance companies doing business in Connecticut may only use a score for a pricing on NEW BUSINESS only. Insurance carriers may not use scoring on renewal policies. Lastly, look for Insurance Scoring to also begin to affect Homeowners Insurance in the near future.

Q:Do I need to buy insurance from a rental agency when I rent a car?

Your liability insurance protects you for the operation of a rented car for 30 days. If you have comprehensive and collision coverage on one vehicle, that coverage extends to the rented car. Your deductibles still apply. Use a credit card to rent the car. Most credit cards include "collision damage waiver" which pays for your collision deductible and certain other types of events. Check with the credit card company.

There may be restrictions for vehicle types. If you rent a vehicle with exceeds 10,000 lbs. gross vehicle weight, you may need to buy all the insurance from the rental agency. Also, the policy territory is USA, it possessions; Canada, and Puerto Rico. If you rent elsewhere, you need to buy all insurance from the rental agency. Ask your agent.

Q:What is GAP Coverage?

If you lease or borrow to buy a car, the amount of your note may be greater than the value of the vehicle. This is the gap. GAP coverage pays this difference. Insurance usually pays for the depreciated value of your car. So, if you have a long term note and a new car, the GAP may exist.

Q:Does my car insurance pay for property stolen from my vehicle?

No. Your car insurance only pays for things which are part of the car such as seats, tires and wheels, and permanently mounted audio equipment. Stolen items are covered by homeowner or tenant policies.

Q:My car was involved in an accident. I need to rent one immediately.

If you have rental reimbursement on your policy you have a limited amount to cover rental costs, usually $30 per day for 30 days. You must get authorization from the company before you rent. If you want the insurance company which carries the policy for someone responsible for your damages to pay for a rental, you must get authorization from that company. This daily limit and length of time allowed may be limited. Make sure that you know what will be allowed before you incur any costs. If the vehicle is a total loss, there may not be any rental reimbursement from any source.

Q:What happens when I loan my car to someone else?

Your policy protects you and the person driving the car.

Q:How can I reduce the cost?

Drive safely. Make sure that you are getting every discount to which you are entitled. The discount list includes credits for more than one car on a policy, more than one policy with the same company, driver education courses, good student, air bags, alarm systems, car pooling, no previous losses, and more. Consider higher deductibles on comprehensive and collision insurance. If your vehicle is not worth much, you can drop comprehensive and/or collision. High performance and high value cars cost more to insure than standard cars.

Q:What is an "Umbrella" policy?

This policy adds an additional layer of liability protection to your auto and homeowner or tenant liability limit. The coverage can be "following form", exactly like your auto and homeowner liability, or it can be true "umbrella" which adds some important protection such as libel and slander. The layers start at $1,000,000 and additional $1,000,000 can be purchased. Cost is surprisinlgy low. Ask us.

Personal Homeowners Insurance
Q:Should I insure my house for what it is worth on the market?

No. You should insure it for the cost to rebuild, not market value. This way, if there is a partial loss to the building, you will be reimbursed for the cost to replace the partial loss.

Q:What does replacement cost mean?

For the building, it means the cost to rebuild at today's cost. As long as your amount of insurance on the building equals the cost to rebuild, you will get replacement cost at the time of loss. A complication can arise if you are required to improve the building to meet current building codes. Some policies include a limit of 10% of the amount of insurance on the building to cover the increased cost of construction to meet code. Ask us, especially if your home is older. For contents, it means today's prices of your personal property. Antiques and fine art values are subject to limitations.

Q:I have antiques, paintings, valuable carpets, and statuary collections. What should I do?

You should buy specific insurance for unusual items of high value. The value is set by appraisal. The coverage is more extensive than the standard policy. Most often, there is no deductible. Cost is surprisingly low.

Q:Why should I have special coverage for jewelry?

The special coverage values jewelry at appraised amount. It also covers disappearance, loss of a stone from the setting, and recognizes loss to one of a pair. Most often, there is no deductible. The standard policy limits the amount available for theft to $2,000 to $5,000 depending on the company, there is no coverage for disappearance or loss of a stone, and the policy deductible applies to any loss.

Q:Are jet skis, snowmobiles, motorcycles, and quads covered?

No. There is no coverage for either property perils or liability. You need separate policies.

Q:Do I need special coverage for my home business?

Yes. The standard homeowner policy does not cover liability for your business. A small amount of business contents may be covered as long as you operate as a sole proprietor. Separate buildings used for business are not covered. The right coverage can be added by either adding it to your homeowner policy or writing a commercial policy. Ask us.

Q:What can I do to save money?

First, make sure that the dwelling is insured for the cost to rebuild. If not, you will not be fully compensated if you have a claim. Any "savings" at the expense of inadequate insurance will be costly. You can reduce your premium by taking a higher property deductible.

Business Insurance
Q:Can an employer be sued by an employee for a work related injury?

No. According to Connecticut Statute #31-284, Workers Compensation is the only available remedy.

Q:Does my Business Policy protect me against a loss from flood?

No. Coverage can sometimes be found by endorsement however a separate Flood Policy is typically needed. A Flood Policy can be purchased through the National Flood Insurance Program. This policy can be provided by the Founders Insurance Agency, Inc.

Q:What Is Business Income Insurance?

It covers continuing business expenses, extra expenses to get the business back on its feet as quickly as possible, and can include payroll for key employees after an insured property loss. Many businesses suffer a decline in business after reopening. Business Income Insurance can cover reduced revenues for a prescribed period of time after reopening.

Q:Why do I need Business Income Insurance?
  • 43% of businesses suffering a serious property loss never reopen.
  • 28% of those that do reopen fail within 3 years.
  • 95% of all businesses that do buy Business Income Insurance don’t buy enough.
Q:Some of my products and services are sold on the internet. Since I have coverage on my computer, am I covered?

No. A typical policy may cover direct loss to your computer equipment. Losses related to hacker attacks, security breaches or service interruption may not be covered. Many insurance companies now offer coverage for internet commerce. The Founders Insurance Agency can help.

Q:Is it legal to obtain a prospective employee’s motor vehicle record as part of the hiring process?

Yes, if the employer obtains written consent from the applicant with the employment application typically at the first interview. The Federal Credit Reporting Agency should be consulted for details.

Q:If a leased vehicle covered under the Business Auto Policy is totaled in an accident will the insurance company pay off the lease?

In most cases the Comprehensive coverage on the policy will pay the “Actual Cash Value” of the vehicle to the leasing company. The business will be responsible for any difference. The way to avoid this situation is to add “Lease Gap” coverage to the policy if needed.

Group Health and Life Benefits
Q:What is the 26/26 rule?

On the next renewal date on or after September 23, 2010, all medical plans must cover eligible dependents up to age 26. Health care reform legislation extended dependent coverage to age 26 for plan years beginning September 23, 2010. Dependent coverage applies to medical benefits only. The law does not apply to dental, vision, standalone pharmacy plans or other benefits. Please note that states can elect to extend the age beyond 26. For instance, New York has extended dependent coverage to age 29.

Q:What is the current status of COBRA legislation?

On May 5, 2010, Connecticut Public Act 10-13 extended the maximum state continuation period for certain qualifying events from 18 to 30 months. This change applies to individuals who are currently on federal COBRA or state continuation coverage, as well as to individuals who experienced a qualifying event on or after May 5, 2010. Qualifying events include loss of health coverage due to lay-off, reduction in hours, leave of absence or termination of employment.

Please note that the federal COBRA premium subsidy is currently only available for employees having a qualified event between 09-01-2008 and 05-31-2010.

Q:If I travel outside the USA, should I buy travel medical insurance?

Many people believe that they are covered while traveling abroad if they already have existing health care insurance. Within the United States, that’s true as urgent and emergency services are generally covered throughout the United States. However; outside the U.S. can be a different story. In some cases, your insurance won't even cover you if you're traveling on a foreign-flagged vessel. This is a huge red flag, since most cruise ships, even those cruising U.S. waters, are not flagged in the U.S.

In many cases even if you are covered for basic emergency care overseas, in almost all cases your current health insurance does NOT cover you to evacuate you and repatriate you back to the U.S. This is where "Medical Evacuation and Repatriation" insurance is of the utmost importance. This is essential for anyone who frequently travels outside the country. It's an insurance program (usually an annual premium, not often purchased per trip) where if you get sick or injured overseas, the policy will get you treated, stabilized and flown back to the U.S. However it’s important to read the fine print. Some companies that offer such insurance will fly you to the doctor and medical facility of their choice, not your choice.

Another great reason for purchasing this coverage: If you’re in a foreign country, particularly a developing country, many hospitals will admit you without caring about your coverage, but they won’t let you leave until you pay. Travel insurance can help facilitate payment, and act as an advocate so that you’re not overcharged simply because you’re an American (FromTODAY).