Frequently Asked Questions

Our experts have compiled a few questions that are frequently asked of us. If you have a question about insurance, employee benefits, or bonding, please feel free to contact us for help.

Business Insurance

Q. I am a sole proprietor with no employees. I'm told that under Oklahoma law, I don't have to purchase Workers Compensation coverage. However, I am constantly asked for proof of coverage or having money withheld from my pay to cover Workers' Compensation premiums. What should I do?

A. Oklahoma laws do provide that a sole proprietor with no employees can option to not purchase workers compensation coverage. By doing this, you accept your own risk of on-the-job personal injury. The Oklahoma Insurance Department has developed a document for you to properly prove your sole proprietor status. It is called the Affidavit of Exempt Status Under the Workers' Compensation Act. You can access this form by following this link to the Oklahoma Insurance Department Website. DOWNLOAD>> http://www.oid.state.ok.us/

 

Personal Insurance

Q. I had a loss, and my roof needs repair. The company is only willing to pay for repairing part of the roof, even though the contractor has said that I need to replace the entire roof.

A. The company is only obligated to pay the cost of repairing the part of your roof that was damaged by a covered peril. If the entire roof needs replacing because of normal wear and tear, you will be responsible for paying the additional cost.

Q. Does my homeowners insurance policy cover flood damage?

A. Probably not. Most homeowners insurance policies do not offer protection against flood losses. You should check your policy under the Section I Exclusions. It would probably be listed under "water damage."

Flood insurance is available through the federal government's National Flood Insurance Program. It may be purchased through any licensed property/casualty insurance producer or through many private insurance companies that are now writing flood insurance under arrangements with the Federal Insurance Administrator.

Q. What is covered under bodily injury liability coverage?

A. This coverage does not protect you or your car directly. If you cause an accident injuring other people, it protects you against their claims up to the stated amounts for medical expenses, lost wages, pain and suffering and other losses. It will also usually pay if the accident was caused by a member of your family living with you or a person using your own auto with your consent. It does not pay for bodily injury you may sustain.

Q. What is covered under property damage liability coverage?

A. Property damage liability coverage pays for any damage to the property of others up to the stated amount provided by the policy (i.e., a crushed fender, broken glass, or a damaged wall or fence). Your insurance will pay for this damage if you were driving your auto or if it was being driven by another person with your consent. Property damage liability also pays if you damage government property like a light pole or signpost, up to the limit you choose.

Q. What does collision coverage provide?

A. Collision coverage pays for physical damage to your vehicle caused by your vehicle colliding with an object, including another car or if it overturns. In the event of an accident, collision coverage will pay to repair your vehicle up to the amount equal to the value of the vehicle before the accident. Your own insurer will pay for such damage even if the collision is your fault.

Collision premiums are based on the make and model year of your car. You should evaluate the current market value of your car and your ability to afford a similar car should it be destroyed before you purchase this coverage. You may not need this coverage if your car has decreased in value or if you can afford to replace it.

Q. What does comprehensive coverage provide?

A. Comprehensive (also called other than collision) coverage pays for damage to your vehicle resulting from fire, vandalism, water, hail, glass breakage, wind, falling objects, civic commotion, or hitting a bird or an animal. Damage from striking a deer is a relatively frequent accident in Wisconsin. It is important to know that most policies cover hitting an animal under comprehensive, not collision, insurance.

Comprehensive coverage also pays if your vehicle or parts of it, such as a battery or tires, are stolen. Flood damage to your car is also covered if your auto insurance policy includes comprehensive coverage. If you carry collision without comprehensive, you are not covered for flood damage.

Q. How is the deductible for comprehensive or collision coverage applied?

A. Deductibles for comprehensive or collision coverage are applied for each occurrence. A deductible is the dollar amount that you have to pay toward the loss before the insurance company begins to make payments on the loss. For example if you suffered a comprehensive loss (a deer hit) and that same day suffered a collision loss (a rock hit your windshield), your policy allows the insurer to apply two different deductibles. Many companies will waive the deductible for the windshield occurrence if you can repair it rather than replace it.

Q. If I have my car financed, do I need to purchase auto insurance?

A. If you do finance the car, the financial institution (lender) will require that you have car insurance. The terms of your loan will most likely require you to provide comprehensive and collision insurance. This is because the lender considers your vehicle collateral for the loan. If your policy lapses, the bank will force coverage (obtain a policy) and add it to your loan. Forced coverage provides protection to the bank, not you, for their interest in the car and nothing else. The cost of this insurance is much higher than you would pay if you bought your own policy through a standard carrier.

Q. Can I require the insurance company to replace my car?

A. The personal auto policy is not a replacement policy. Coverage for your car is based on actual cash value. The actual cash value (ACV) of your car is based on the value of your car at the time of the accident, taking into account its current market value. Therefore, the insurance company's obligation is to repair the car based upon its actual cash value not its replacement cost.

Q. What is meant by aftermarket parts?

A. Auto repair shops may use aftermarket and/or used parts when repairing or replacing a damaged part (i.e., bumpers, bumper covers, and associated bumper parts, etc.). Aftermarket parts are produced by companies other than the original equipment manufacturers (known as OEM parts).

Auto insurance contracts do not generally specify what parts will be used. You may request that aftermarket parts not be used to repair your vehicle, but you are responsible for any repair costs that exceed the final claim settlement negotiated with the insurance company.

Q. The insurance company is totaling my car. How can I make sure I get what its worth?

A. An insurance company totals a car if repairs would cost more than it is worth. An insurance company will use various sources to value your car, including, but not limited to the National Automobile Dealers Association Used Car Guide ("Blue Book") or the CCC Information Services, Inc., guide. The company's offer, therefore, might not recognize your car's condition, special features or value on the local market. A company is more likely to raise its offer if you can show that your car would sell for a higher price in your area. Keep the lines of communication open. Get several used car dealers' to write price quotes for a similar automobile. Newspaper used-car ads also can build your case. Remember these quotes and ads provide asking prices and the actual value or sales price could be lower.

Q. The other driver's insurance company wants me to sign a release on my injury claim. How long can I delay this?

A. Sign the release when you are satisfied with your total settlement. Get a letter from your doctor estimating the cost and length of your future medical treatment. You may, of course, consult an attorney before accepting a settlement.

Q. What affects the price of auto insurance?

A. When determining the rate for an auto insurance policy, insurers separate drivers into categories called classifications. Drivers are classified based on a number of different characteristics including, but not limited to, age and gender, marital status, where the vehicle is garaged, driving record, make and model of vehicle, prior insurance coverage, insurance score (includes credit history) and annual miles driven. History has shown that drivers with certain characteristics, such as a poor driving record, have a greater chance of being involved in an accident, and the drivers in those classifications must pay higher rates. While some of the classification criteria (such as age and sex) are out of your control, others, such as driving record and type of vehicle driven, are within your control.

Q. Can the driving/accident records of my child and/or spouse have an impact on my ability to buy auto insurance?

A. Yes, the driving record of any licensed driver in the household will affect the decision of the insurance company to insure your vehicle(s). It can cause you to be turned down for insurance coverage or to pay higher insurance premiums.

Q. How much will my insurance cost?

A. Premiums or the amount you pay for insurance can vary. The type of car you drive, your driving record, your age, your sex, where you live, and how much you drive usually affect the cost.

Q. How are auto insurance rates calculated?

The rising cost of vehicle repairs and the skyrocketing cost of medical care affect the total cost of auto insurance, pushing premium rates.

The greatest increase in recent years has been in liability coverages. These coverages pay for property damage and bodily injury. The impact of legal costs is a part of the overall expense.

Auto insurance rates are based on a variety of factors. The premium you pay consists of a "base rate" plus or minus amounts reflecting your age, gender, marital status, driving pattern, vehicle type, driving record and claims history. There is a different base rate for each type of car and geographical area. While individual companies may differ in the amounts they assess for each factor, the major rating factors are fairly universal.

Your age: Statistics show that, as a group, drivers under age 30 have more accidents per mile driven than the general population. Thus, young drivers are charged higher rates, as are families with young drivers in the household.

Your gender: Young men are involved in more accidents per miles driven than any other population group. The difference is especially pronounced for male drivers under 30. Washington law allows insurance companies to charge on the basis of gender and age where the actual proof of differences in risk exists.

Your car: Generally, the more expensive your vehicle, the more you will pay for comprehensive and collision coverage. Also, because sports cars and high-performance cars tend to get into more accidents, cost more to repair and are more likely to be stolen, they cost more to insure.

Your location: The higher number of accidents in a populous area will raise both your liability and collision premiums, while higher crime rates in urban areas can raise your comprehensive premiums. The law allows companies to base your rate on your address (garaging territory), even though you may drive to a more urban or rural area.

Driving patterns: The more miles you drive, the higher your rates will be. A car used for a total of 7,000 miles a year would normally have lower rates than a car driven 15,000 miles a year. Your work commuting distance will mean additional miles on top of non-commuting , "pleasure", miles.

Your driving record and claims history: Most companies apply a surcharge to drivers who have been involved in an accident or convicted of multiple traffic violations. Also, the more claims you have made, the higher your rates are likely to be.

Credit Scoring: An insurance score uses information from your credit report to determine how stable or financially responsible you are. There is strong statistical evidence, based on years of analysis, that people with high insurance scores - that is, people with superior credit histories - file fewer or smaller claims. The opposite is also true. People with lower insurance scores as a group tend to file more or larger claims.

Q. Is there a way I can reduce my premiums?

Every auto insurer has its own package of special discounts to attract particular types of customers. Most insurance companies provide discounts for at least some of the following: accident-free drivers discount; a package discount for insuring your home and auto with the same company; multiple auto discount; good student discount; nonsmokers discount; and passive restraint discount (for vehicles with air bags or automatic seat belts). You may also consider higher deductibles for your comprehensive and collision coverages.

Q. Can my insurance company raise my premium due to an accident or traffic ticket?

Your insurer may charge an extra fee, a surcharge, if you are involved in a chargeable accident or were ticketed for a traffic violation. A surcharge is used as a tool to properly price the exposure the insurer is writing, and not as a means to recoup payment made under a claim. The total dollar amount paid as the result of a claim usually does not affect the surcharge.