Frequently Asked Questions

Why are homeowner’s insurance rates increasing and/or coverage changing?
The number and severity of claims from severe weather have increased in recent years.

Because of this pattern of increased claims, insurance companies must change coverage limits and increase homeowner premiums to remain solvent and competitive.

Reasons for rate increases: revisions to rating plans, changes to policyholder characteristics in recent renewals, severe weather, and natural disasters.

The cost of reinsurance is also trending higher.

These issues are not confined to any one company, state, or even a county – the weather is uncontrollable. Rates and pricing methodology are reviewed and approved by each state’s Department of Insurance.

Bottom line is, policy costs can increase even if a policyholder hasn’t filed a claim.

How can my insurance coverage change or cost more when I haven’t filed a claim?
Insurance spreads risk among diverse individuals and groups so that when one person suffers a loss, every policyholder contributes to the cost of paying the claim.

Insurers must account for the increasing risk from severe weather trends so that future claims can be paid.

Dramatic changes in weather trends and natural disasters = higher shared costs.

What should I do if I’m not sure about my insurance rate or deductible?
Contact us here at The Insurance Exchange. As an independent agent, we are your best resource to help you determine your needs, evaluate your options, and tailor a plan best suited to your individual requirements.

As your independent agent, we can answer questions and provide you with the resources you need.

Replacement cost or actual cash value?

You can choose between replacement cost or actual cash value coverage.

Replacement cost (RC)

The amount you would need to rebuild your home and repair any damage using similar kind and quality of material (without deducting for depreciation).

It is always important to insure 80% or more of your home’s reconstruction replacement value. Replacement value has very little to do with market value.

Actual cash value (ACV)

The amount it would take to repair or replace your property after a loss after depreciation has been deducted.

Can I buy car insurance if I do not own a car?
Even if you do not own a car you can purchase a non-owned auto policy. That would give you some liability protection at the level you choose if you were driving someone else’s vehicle.

At The Insurance Exchange we have the coverage you need and if you would ever purchase a car or truck we would change the policy to an owned auto policy.

Can my friend drive my car?
Most auto policies allow permissive operation. That means if your friend operates your car and has an accident that is his fault your policy will protect you and your policy will protect your car if you chose physical damage coverage. Your policy will not protect your friend. Your friend must have his own policy to have liability coverage.

How do I know how much life insurance I need?
You can get help from the agents at The Insurance Exchange. We will discuss with you the financial obligations you have and what you want your insurance to do for your family. We will help you determine if have a temporary need or a permanent need and recommend a product to fit your need.

We also offer plans for business needs such as funding for a Buy/Sell agreement, stock purchase plan, stock redemption plan, key employee or simple mortgage/debt protection.

What is disability income protection?
Disability income protection is an insurance policy to protect your income in the event of an accident or sickness that prevents you from working to earn a paycheck. It is truly paycheck protection.

Disability policies are tailored to your choices. How long can you wait before beginning to receive a benefit? How much of your income do you need to protect? How long do you want to receive benefits for a given illness or injury?