What’s an insurance deductible?


couple revieiwing insurance policy

Like many other industries, insurance has its own unique jargon that can sometimes make shopping for coverage seem overly complicated. Your local independent insurance agent is always happy to break things down for you and explain any language or terms that you don’t understand. One term that is commonly used in auto, health and in other insurance policies is “deductible.”

In simple terms, a deductible is the amount of money that you, the insured, must pay for a claim before your insurance will kick in.

If you have a deductible, it means that you will be responsible for any losses or payment of services up to the stated dollar amount in your insurance policy. Usually, deductibles are defined as a dollar amount, but they can also be defined as a percentage.

Deductibles can be beneficial both for the insured and for the insurance company. For the insured, it can be a way to are a way to reduce the cost of insurance: The more risk for loss that you, the insured, agree to pay before the insurance kicks in, the lower your premium. For the insurance company, it is a way to avoid the cost of processing and paying a high volume of small claims. Talk to you insurance agent about what deductible options are available to you and how they will affect the cost of your coverage.

Let’s look at an example: You are in an auto accident and your car’s damages are assessed at $1250 in damages. If your insurance policy has a $500 deductible, you will have to pay the first $500 of the damages to your car out of your own pocket and the insurer will pay the remaining $750. Generally, once the deductible is met, any future losses that you might have during the term of that policy will be covered in full.

The Insurance Information Institute has a great article on understanding your insurance deductibles that explains how deductibles work to prevent surprise costs and save money. It’s a good introduction with clear examples. They also discuss homeowners disaster deductibles for hurricane, wind/hail, flood and earthquake coverage. (Reminder: your homeowners insurance does not automatically cover you should your home be damaged by flood, earthquake, and other natural catastrophes – talk to your insurance agent about what your homeowners does and doesn’t cover.)

Businesses can also opt for deductible plans for certain types of business coverage such as workers compensation programs.

Many people are familiar with deductibles through their health insurance coverage. Learn more about health insurance deductibles at HealthCare.gov.

As with all insurance matters, you need to check your own policy. Insurance can vary by state law, by type of coverage, and by individual policy. It’s a good idea to read your policy and to ask your insurance agent to explain any terms that you don’t understand.

 

Motorcycle Mania: Your spring guide to insurance, safety, training, laws and more


Despite the good news that motorcycle fatalities are trending down in recent years, motorcycle riders still represent a disproportionate share of traffic fatalities. May is Motorcycle Safety Awareness Month, a good time for riders and those who share the road with motorcyclists to double down on safety as we all get ready for the warmer weather and summer road trips. Here’s a guide to important information that you need to be prepared and to ride safely, as well as to comply with licensing, insurance and other legal requirements. .

Motorcycle Laws

If you operate your motorcycle on public roads, you must register it with your appropriate state authority and must be licensed to drive it.

AAA Digest of State Motor Laws – Motorcycles

State-by-State Guide to Motorcycle Laws – helmets, headlights, passengers, noise restrictions and more

III: State Motorcycle Helmet Use Laws (chart form)

State Highway Offices

Motorcycle insurance

Most states require that you carry at least a minimum insurance coverage – Florida, Montana and Washington are exceptions. Those states that do require insurance vary as to coverage requirements; most require a minimum of liability insurance to cover bodily injury and property damage.

Whether required or not, we think it’s pretty risky to go without coverage. Should an accident occur resulting in an injury or property damage, without insurance, you are on the hook. In fact, it is generally worth looking into expanding your coverage beyond the minimum. Options to consider are comprehensive and collision, which would cover other potential losses, such as replacement if your bike were stolen or damaged.. In some states, uninsured/under-insured motorist coverage is required; in others, you may be required to have specific coverage for passengers.

Motorcycle owners sometimes ask if they can cancel insurance in the winter when they aren’t riding but that can be risky and leave you exposed if the bike is stolen. Some insurers offer winter lay-up insurance options.

Talk to your independent insurance agent, who will be able to recommend the best coverage for your local requirements and your particular circumstances. Be sure to ask if there are any discounts that you may qualify for, such as for bundling multiple policies, for being a safe driver, for having participated in training, or any other circumstances.

For more, see the Insurance Information Institute (III): Find the right coverage for your bike

Motorcycle Safety

The Motorcycle Safety Foundation is a valuable resource. It is a not-for-profit resource, internationally recognized for comprehensive, research-based, Rider Education and Training System (RETS), which promotes lifelong-learning for motorcyclists and continuous professional development for certified coaches and trainers. MSF also actively participates in government relations, safety research and public awareness campaigns.

Check for available trainings and download their popular guide, You and Your Motorcycle: Riding Tips. Check out their other guides for three-wheelers, scooters, off-highway riding and more.

III: Background on: Motorcycle crashes

NHTSA: Motorcycle Safety

Choose the right helmet – how to find the right fit for safety

Helmet safety ratings – Make sure your helmet has the DOT symbol on the outside back; this means it meets Federal Motor Vehicle Safety Standard (FMVSS) No. 218.

Motorcycle Industry Council Tire Guide

NHTSA: Safety Issues and Recalls – search by VIN

Additional Resources

How to Prepare your Motorcycle for Spring

Consumer Reports: Motorcycle Buying Guide & Ratings

Motorcycle Club Listings

Car thieves are just driving away with our cars for the darndest reason!


We’ve all misplaced our car keys at one point or another, but are people getting more forgetful?

That would appear to be the case if we review the recent report that the National Insurance Crime Bureau (NICB) issued on car thefts. Thieves are driving away with our cars because we are making it too easy for them by leaving our keys and fobs right in the vehicles!

While car thefts in general are on a downward trend, the numbers of cars stolen due to keys in the car are on the rise. And it’s not just a slight uptick – there’s been a 56% increase since 2015 and an 88% increase since 2013!  Every single day last year, an average of more than 200 cars were stolen due to keys in the car. You can learn more in the NICB press release on thefts of vehicles with keys, along with the short video and infographic, below.

NICB keys-in-cars theft report infographic

Sometimes the keys or fobs left in the car are not due to forgetfulness – thefts spike in the winter when there are more cars being warmed up in cold weather. Beyond that, NICB doesn’t speculate as to why. It may be because they are quieter. We previously talked about how quieter, keyless cars are related to an increase in carbon monoxide deaths. Beyond that, it’s anyone’s guess: Too much trust in anti-theft and theft-recovery systems? An aging population of drivers? Distracted by our phones as we are powering off our cars? Hard to know.

To prevent this happening, NICB advises drivers to:

  • Lock the vehicle, set the alarm and take all keys or FOBS.
  • Do not leave the garage door opener in the vehicle.
  • Take a picture of your registration on your cell phone and do not leave the registration or other papers with personal information in the vehicle.
  • Never leave a car unlocked and running to warm it up or while stopping for a quick cup of coffee. It only takes a moment for the opportunistic thief to jump inside and drive off.

Thinking of a side hustle? Check with your insurance agent


man working at home to illustrate a side hustle

Today, it seems like everybody’s got a side hustle, which is essentially just a fancy rebranding of what used to be called moonlighting. But today’s moonlighting often comes with a twist …. these gigs often involve using your personal car or home to generate extra income. Whether it’s driving for Lyft, dropping off packages for Amazon, delivering meals through DoorDash, renting your home through Airbnb or just taking advantage of a tourist influx during a big local event by renting out your home, five words of advice: check with your insurance agent.

If your goal is earning some extra cash, make sure you understand and are covered for potential risks. You might think you are covered by working for a third-party service, but if you injure yourself or someone else while working, if you damage or lose someone’s property or if you suffer a loss to your own property, you may be on your own. Here are just two examples:

Home rental – If you want to start renting out all or a portion of your home through a peer-to-peer rental service, what happens if a guest is injured on your property? Or if a guest burns the whole place down in a cooking fire, will your rental service cover your home replacement?

Some services, such as Airbnb and VRBO, offer programs such as host guarantees or host liability insurance. On first glance, these may look adequate – $1 million liability coverage should be enough, right? But like most things, you need to read the fine print because there are conditions, limitations and exclusions that could leave you exposed to serious loss. You also should not assume that your own homeowners policy will provide coverage in a home rental scenario. Insurance Information Institute says:

Standard homeowners and renters insurance policies are designed for personal risks, not commercial risks. Some insurers now offer a home-sharing liability insurance policy that can be purchased on a month-to-month basis, but there may be exclusions and limitations, so read the policy carefully. If you plan to rent out all or part of your home on a regular basis, many companies will consider this a business use and you may need to purchase a business policy—specifically either a hotel or a bed-and-breakfast policy.

Ridesharing – Check with the service you are contracting with about any coverage that they might offer – states are increasingly mandating that third-party services provide some coverage, but again – there could be conditions, limitations and exclusions that leave dangerous gaps in your coverage. And it’s a mistake to assume that your own personal auto insurance will cover you. Insurance Information Institute says:

Generally a standard personal auto policy will not provide coverage for ride-sharing. A standard personal auto insurance policy stops providing coverage from the moment a driver logs into a TNC ride-sharing app to the moment the customer has exited the car and the transaction is closed.

They also advise:

Prospective drivers should ask the TNC what level of coverage it provides. Drivers should also contact their own auto insurer to address gaps, if any, in their liability protection. It is also recommended that TNC drivers review a copy of their TNC’s insurance contracts so they know the exact terms and conditions of the coverage.

Learn more: Ride-sharing and insurance: Q&A

These are just two common examples of so-called side-hustles, but other income-generating activities might call for other types of coverage, such as product liability or home business coverage. Your agent can also help you assess the adequacy of coverage offered by a third-party.  If you are considering a side-hustle, give your independent insurance agent a call to talk things over.

It’s National Work Zone Awareness Week


Highway road construction zones are a dangerous place, an area where accidents are more likely to happen. Workers perform their jobs in a high-risk environment as multi-ton metallic vehicles speed by them all throughout their shift. But despite the vulnerability of the road workers, drivers are the most frequent fatality in work zone crashes. Between 2016 and 2017, fatal crashes in work zones increased by 3 percent while fatal crashes outside of work zones decreased by 1.5 percent.

Work zones are a highly dangerous and unpredictable environment for drivers, who encounter narrow lanes, sudden stops and traffic pattern shifts. Work vehicles can be entering and exiting. Normal road markings may be obstructed, replaced by unfamiliar signage. Paved shoulders are not in place.

This week marks National Work Zone Awareness Week, April 8-12 – a campaign to raise awareness about the risks for workers and the general public alike, and to offer a reminder to “drive like you work here” around work zones for the safety of all.

Here are infographic tips from the Federal Motor Carrier Safety Administration – copy them  and share them on social media.