All insurance premiums reflect how insurance companies assess the “risks” involved for a
particular company and business activity.
Some of the risk factors include:
- The location of the business;
- The type of merchandise sold;
- They nature of the commercial activity;
- The number of employees;
- The condition of the premises;
- The volume of sales;
- The experience of the business owners;
- The type of security in place, and;
- The number of previous insurance claims
- For example, a company that sells kitchenware out of a retail locat1on in a mall will usually pay lower premiums than a company that operates a beer and wine store. The beer and wine store is at higher risk for robbery than the kitchenware store.
Other risk factors may include:
- The type of heating in the building
- The type and condition of electrical writing
- Distance from other buildings
- Lack of private and public safety features
- Lack of occupancy.
When you apply for an insurance policy, you will be asked a number of questions. For example, the agent might ask you your name, age, gender, address, etc. In addition, you will be asked a number of other questions which will be used to determine how likely you are to make a claim.
When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, it will want to know about the person’s previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured.
Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than will a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you.
In addition to your age, gender and driving experience, information about the vehicle you drive, and how you drive it, is also needed to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact; and, someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends.
However, while a typical homeowner’s policy provides blanket coverage for the building and its contents, most commercial coverage is tailored to the needs of a business operating within a specified industry. A business owner has a “shopping” list of coverages to chose from that may include one or more of the following:
- Liability- Protection against personal injury and damage claims resulting from the operation of the business.
- Buildings and Equipment- Protection against damage to the build ing premises or equipment used to conduct business.
- Stock and Materials – Damage or loss of the raw materials used in production or merchandise intended for resale.
- Theft and Vandalism- Loss or destruction of raw materials used in production, money or merchandise intended for resal
- Business Operations- Compensation for loss of business because of malicious damage, fire or other unpreventable occurrence. Coverage may also pay the wages of key employees during a prolonged period of corporate downtime.
- Earnings and Profitability- Compensation for lost profits during a prolonged period of downtime resulting from malicious damage, fire or other unpreventable occurrence.
- Breakdown Coverage – Compensation for the loss of use of critical business equipment such as computer networks, telephone systems, air conditioning or refrigeration .
- Directors and Officers Liability – Protection for the principals of a business or organization against lawsuits.
- In addition, there are special coverages available for a variety of “short-term” activities such as construction projects and special events such as golf tournaments, mall exhibits or trade shows. Please consult your GNK Commerci al Insurance Advisor for more information on these specialty coverages .
- A business owner may choose to “self insure” a portion of the risk through higher deductibles that reduce the annual or monthly premium.
Most states have insurance laws that require drivers to have at least some automobile liability insurance. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent.
It is often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just “total” the car and give you a check for the car’s market value less the deductible. Many people with older cars decide not to purchase any physical damage coverage.
Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.
Comprehensive provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm will be covered under your comprehensive coverage.
A number of factors can affect the cost of your automobile insurance — some of which you can control and some that are beyond your control.
The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost you.
Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.
There are a number of things you can do to lower the cost of your homeowners insurance. The easiest thing to do is get a comprehensive review of your policy and needs from your local agent.
It is not surprising to find quotes on homeowners insurance that vary by hundreds of dollars for the same coverage on the same home. When you shop, be careful to make sure each insurer is offering the same coverage.
Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Other times, insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask us about any discounts for which you may qualify
Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent.
There are a number of factors you should consider when purchasing any product or service, and insurance is no different.
Here is a checklist of things you should consider when you purchase homeowners insurance.
- Determine the amount and type of insurance that you need. The coverage limit of your house should equal 100% of its replacement cost. If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home — you’ll have to pay the rest out of your own pocket. Also, decide if the personal property and personal liability limits are adequate for your needs.
- Determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement, an earthquake endorsement or a jewelry endorsement?
- Once you have decided on the coverage you want in your homeowners insurance policy, consult us. We will be able to help you determine if there are any gaps in coverage you might not have been aware of, explain the details of the policy’s exclusions and limitations as well as recommend an insurance company that will live up to your expectations.
[Note: this answer is based on the Insurance Services Office’s HO-3 policy.]
The dwelling and other structures on the premises are protected on an “all risks” basis up to the policy limits. “All risks” means that unless the policy specifically excludes the manner in which your home is damaged or destroyed, there is coverage. The policy limit for the dwelling is set by the policyowner at the time the insurance is purchased. The policy limit for the other structure is usually equal to 10% of the policy limit for the dwelling.
Losses to your personal property are covered on a “named perils” basis. “Named perils” means that you have coverage only when your property is damaged or destroyed in the manner specifically described in the policy. The policy limit on the coverage is equal to 50% of the policy limit on the dwelling. Limits for the coverage for the additional expenses that the policyowner may incur when the residence cannot be used because of an insured loss is equal to 20% of the policy limit on the dwelling.
The coverage limit on personal liability is determined by the policyowner at the time the policy is issued. The coverage limit on medical payments to others is usually set at $1000 per injured person.
Personal property (except property that is specifically excluded) is covered anywhere in the world. For example, suppose that while traveling, you purchased a dresser and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the dresser is in transit — even though the dresser has never been in your home before.
The standard insurance policy does not pay for direct damages caused by “earth movement.” “Earth movement” is a much broader term than earthquake. It includes earthquake, volcanic activity and other earth movement. This coverage may be available by endorsement for an additional charge. If you live in an area that is more likely to have an earthquake, you’ll pay more than if you live in an area that is unlikely to have an earthquake.. We can help you weigh the costs and benefits of this coverage before you decide to purchase.