FAQs

Auto

If a driver who is not named on my policy borrows my vehicle, is that driver and my vehicle automatically covered?

Most policies are “permissive” use policies so you would be covered. If you purchased a “named-driver” or “named-operator” policy, only drivers listed on the policy are covered.

What is the minimum amount of auto insurance that I am required to carry?

Insurance requirements relating to minimum coverage differ from state to state. Liability is the only insurance required by law in California. The limits required in California are often referred to as “15/30/5” coverage and include:

  • $15,000 bodily injury per person
  • $30,000 maximum per accident
  • $5,000 property damage per accident

Is minimum coverage sufficient?
In determining your coverage limit, one of the most important factors to consider is the overall value of your assets. If, for example, you own a business or a home, you may want higher limits of liability coverage to protect those assets. Another consideration is to protect future earnings. While there is no set formula, you always want to secure coverage in proportion to your assets, so in case an accident did occur, you have sufficient coverage to cover the loss. If you are at fault and severely injure another person, you may be held personally liable for the bodily injury and physical damages beyond the scope of your liability coverage.

Additionally, if you lease or finance your car, it’s likely that your liability coverage limits may have to be higher, usually $250/500,000. You should check with the leaseholder to determine the appropriate level of your coverage. For our customers who own businesses we recommend a minimum of $1,000,000 in auto liability coverage. Most auto policies do not offer a liability limit this high so a personal umbrella may be needed.

Our main rule of thumb is to buy as much liability insurance as you can afford. PIA customer support agents are licensed, non-commissioned insurance professionals and can provide advice regarding general coverage limits.

If I purchase a new vehicle, is it automatically covered?

Call your Customer Service Representative before you purchase your new, or used, vehicle to make sure you will be covered when you take possession of the vehicle.

A friend is going to borrow my car, am I covered while they drive my car?

Whenever you knowingly loan your car to a friend, family member, co-worker etc, you may be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, you may be covered as long as they had a reasonable belief that you would have given them permission to drive the car. If you are carrying a named-operator policy, only the individuals named on the policy are covered while they drive your car. Although often less expensive, a named operator policy should be clearly disclosed before you purchase the policy.
Also you should be aware that when you purchase liability insurance, that coverage goes with you from car to car. (This is not true in all cases read your policy) In other words if you borrow a friends car and are involved in an accident, and have car to car coverage, your liability policy will cover you when driving your friends car. However your liability policy will not protect your friend, he/she must have their own liability insurance to be protected. Conversely it is important to make sure that the people who drive your car have insurance. Because irregardless of whether or not they have insurance, you can still be sued. Very important to understand is that under California law the registered owner of the vehicle is the one responsible for the damage caused by their vehicle, even if they are not driving it (except in the case of stolen cars). So if your friend is driving your car not only will your friend get sued but so will you.

I am renting a car, does my insurance policy cover me?

Remember that your liability coverage travels with you from car to car. So whether you are driving your car, a friend’s car, or a rental car, your liability insurance follows you. However the physical damage coverage does not work the same. In most cases, your personal automobile insurance policy will provide coverage only when you are renting a car on vacation. Many insurance companies no longer extend personal automobile insurance coverage when you are traveling on business. The best way to find out what rental car coverage you have under your automobile policy is to call your insurance agent and verify if you have coverage or not.

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Homeowners

What can I do to lower the cost of my homeowners insurance?

There are a number of things you can do to lower the cost of your homeowners insurance. The best thing to do is to shop around. 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. Many insurers use the ISO policy forms, but this is not always the case.

Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for.

  • Many insurers will offer a discount when you place both your automobile and homeowners insurance with the them.
  • Insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system.
  • Newer Home discounts. Some insurers offer discounts on homes that were recently built.
  • Renewal Discounts. Some insurers will lower your premium if you renew with them.
  • 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. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible.
Am I covered if a sewer or drain back up and flood my house?

Sewer & Drain backup are usually excluded from your policy. Most policies will add coverage for an additional premium.

Where and when is my personal property covered?

Coverage C applies to all your personal property (except property that is specifically excluded) 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. Coverage for property off premises is typically limited to 10% of Coverage C.

How much should I insure my home for?

This is sometimes a very difficult question to answer. The first thing to remember is that you are only insuring the physical structures. You are not insuring the land. If you are a first time homeowner and purchase a home for $500,000, you do not necessarily need to buy $500,000 of coverage for the home. Determining the cost to rebuild your home and appurtenant structures is something that should be discussed with an agent who specializes in homeowners insurance. Professional Insurance utilizes two software packages to determine the replacement cost of your home. There are several factors that will determine the homes cost to rebuild.

  • Location, what city is the home located in.
  • Square Footage.
  • Roof type.
  • Design of home, custom vs. tract home.
  • Foundations, the shape and soil conditions.
  • Number of floors.
  • Number of rooms.
  • Number of Chimneys.
  • Number of bathrooms.
  • How many cars the garage will hold. etc.

The reason this is so important is due to the fact that homeowners policies can contain co-insurance clauses or can have maximum limitations on how much coverage the home has. Although most policies contain a replacement cost endorsement, that endorsement may require the home to be insured for a 100% of the replacement cost. And the replacement cost endorsement may cap the amount paid in the event of a covered claim to 125% of the replacement cost stated in Coverage A of the policy declaration page.

When the Oakland Hills Fire hit, the claims settling process was a nightmare for most insurance companies. Almost all of the homes were under insured. Custom homes that cost $450,000 to rebuild were only insured for $225,000. They were underinsured because the homeowner had not notified their agents of upgrades done to the home. However the largest problem came from agents who insured homes for less than replacement cost value. By lowering the replacement cost value the agents were selling lower premiums. The agents were also advising their clients not to worry since they had “replacement cost” coverage. PIA does not condone this practice and it is not something we allow.

What are the policy limits (i.e., coverage limits) in the standard homeowners policy?

[Note: this answer is based on the Insurance Services Office’s HO-3 policy.]

Coverages A and B provide protection to the dwelling and other structures on the premises up to the policy limits.

The policy limit for Coverage A is set by the policy owner at the time the insurance is purchased. This is the amount the insurance company will pay to have your home or dwelling rebuilt in the event of a covered cause of  loss.

The policy limit for Coverage B is usually equal to 10% of the policy limit on Coverage A.

Coverage C covers losses to the insured’s personal property. The policy limit on Coverage C is equal to 50% of the policy limit on Coverage A.

Coverage D covers the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss. The policy limit for Coverage D is equal to 20% of the policy limit on Coverage A. This covers extra costs to rent a hotel room, set up utilities etc.

The coverage limit on Coverage E – Personal Liability – is determined by the policy owner at the time the policy is issued. Liability options are usually $100,000, $300,000, $500,000 and $1,000,000. It is best to discuss with an agent how much liability insurance to buy.

The coverage limit on Coverage F – Medical Payments to Others – is usually set at $1000 per injured person.

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Life & Health

If I leave or lose my job, will I lose my health coverage too?

Not necessarily. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage for up to 18 months. COBRA applies to companies with 20 or more employees.

You will have to pay for your own health coverage but you’ll get the same discounted or “group rate” your former employer pays.

Also, keep in mind the new the federal Health Care Reform Law enacted in March 2010. Under this law, if you don’t find a new job with employer-paid health care coverage, you’ll have to buy your own insurance or else pay a penalty to the federal government.

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Employee Benefits

If I leave or lose my job, will I lose my health coverage too?

Not necessarily. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage for up to 18 months. COBRA applies to companies with 20 or more employees.

You will have to pay for your own health coverage but you’ll get the same discounted or “group rate” your former employer pays.

Also, keep in mind the new the federal Health Care Reform Law enacted in March 2010. Under this law, if you don’t find a new job with employer-paid health care coverage, you’ll have to buy your own insurance or else pay a penalty to the federal government.

Can my employer change the health plan anytime he wants?

Up until March 2010, the general rule was that an employer could change or even eliminate a health plan so long as it followed the rules and guidelines set out by the Employee Retirement Income Security Act (ERISA).

However, under the new federal Health Care Reform Law passed in 2010, employers with at least 50 employees will be required to provide and keep health care coverage for its employees by 2014. They’ll have to pay a penalty to the federal government if they don’t do so.

Can I be fired while I'm on disability?

In some circumstances, depending on how long you’ve been off work and how much longer it will be before you can return to work, your employer may be able to terminate you. But you can’t be fired simply because you went on disability.

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