1) What does credit have to do with it?

A few years ago, insurance company started research on a new criteria for underwriting. It turns out, there is a strong correlation between a consumer's credit history and the number / severity of claims that they will likely submit.

Other underwriting information is still very important in determining the price. Driving record and vehicle type can still make a significant difference in the premium amount. But now, consumers with a good credit history can still get a "Preferred" price even with a lapse between policies and even a few tickets.


2) Does an insurance quote affect my credit score?

When an insurance company does a credit inquiry to price an insurance policy, it usually does not affect a consumer's credit rating. While the inquiry DOES appear on the credit report, it is clearly identified as an insurance company that checked. Most reputable lending institutions realize that you're not borrowing money from that insurance company and will ignore that entry on your credit report.


3) Why am I being canceled for claims?

One of our most common concerns regards 'non-renewal due to claim frequency.'  We agree that it is frustrating -- you pay for your insurance and when you have to use it, they cancel you!  Well what are you paying for then???

The answer is quite simple.  You are paying insurance now for something that might go wrong tomorrow.  If you have to turn in a claim, the insurance company is happy to indemnify you -- after all, that is the reason you are buying insurance from them. 

The problem is, when you have a claim, statistics show that you are much more likely to have another one soon.  As a result, most companies will increase your price after the first claim -- you should ultimately expect to pay more (because statistics prove that it will cost more). 

If you have multiple claims, the statistics are so convincing that you'll continue to have claims that some companies can't even approximate the cost.  If they don't know how much it will cost to insure you for the next 12 months, they'll often require that you seek insurance with a carrier that can estimate the cost (in other words, they'll non-renew you). 

We sincerely hope that you are never in this situation.  If it does become a reality for you, please understand that the insurance company isn't mad at you for turning in claims... they just don't know how much to charge for future protection because the odds are that you'll have another loss again soon.

4) Why am I being declined homeowners insurance because I own a high risk dog?

Another frequent problem with homeowners insurance is the presence of high risk dogs. Dog bites are extremely expensive for property insurers and the company has a right to avoid those risks.

High risks dogs include Pit Bull, Rottweiler, Doberman, German Shepherd, Akita, Chihuahua, and, sometimes,Labrador. Standard companies will usually deny coverage to anyone owning one of these animals. The Ohio Fair Plan (our state supported program) will take any of these dogs EXCEPT pit bulls and any dog that has bitten someone.


5) Why can I only list one or two names on my auto insurance ID card?

In Ohio, the state employs "The Ownership Statute." Among other things, the main premise is that you only have to prove there is insurance on a vehicle in this state. Technically, it doesn't need to show a name at all for proof of coverage to be legitimate.

You do have at least two "policy level" enhancements that benefit the "named insureds" on your policy, however. Specifically, named insureds (you, your spouse, and minor children) will have uninsured motorist protection in most scenarios even when you're not in your vehicles (even as pedestrians for example). Additionally, your liability coverage will extend to a temporary replacement personal use automobile. These two policy level enhancement don't exist for other drivers listed on the driver schedule of your policy. That is why you can only list bona fide named insureds on the ID cards. Please remember, this situation exists for every company in the state of Ohio (plus almost every other if not all of them in the U.S.).

Please consider this: Technically, you can add any and every driver that ever operates your autos on your policy. Theoretically, that list could grow to twenty, thirty or even more drivers. Those additional drivers aren't always insured on your policy - only while they are operating one of the vehicles (which your ID card proves that you have coverage on). Even in this situation the only person(s) that can appear on the named insured line (and ultimately the ID card) are the named insured, his/her spouse, and potentially a minor child (which actually isn't required for the benefits to exist).

The named insured line on your policy and ID cards exists to show you and your spouse that you have certain policy level coverage that applies at all times. Proving that there is insurance on the vehicles for others that operate the vehicles (listed or not) is best achieved by showing the ID card that lists the vehicle driven - regardless of whos name is on the ID card...

If you are concerned that a police officer doesn't understand the Ownership Statute in Ohio (believe me, it happens), the best solution is to carry a copy of the declarations page showing the driver schedule.

6) Please help me understand these limits!

When you purchase a personal auto policy, the most common way to buy liability is with split limits of liability. That just means you choose a specific limit for bodily injury and another limit for property damage.

You might notice on your quote or your declarations page a number like 100/300/50. Each number is significant and this is why. The first number that you see (in this example, 100) is the "per person limit for bodily injury." It is usually listed in thousands. Hence, the most that this policy would pay for any one person's bodily injury is $100,000.

The second number in our limit is the "per accident maximum for bodily injury." Again, it is frequently listed in thousands. In our example above, the maximum that this policy would pay for all of the bodily injury in one accident is $300,000.

Finally, let's look at the third number. In our example above, the 50 indicates that the "property damage limit of liability" for any one accident is $50,000 maximum.

These limits are very important! If you only have $50,000 for your property damage limit and you exceed that, you'll be responsible for everything over and above $50,000. Please look at your limits. It doesn't cost a whole lot to dramatically improve your protection. It could save you 10s of thousands of dollars in the long run...

7) Someone else lives in my house but I don't want them listed. Why is my agent asking so many questions about him?

Pricing insurance is known as actuarial science. It involves estimating economic risk and it is a very sensitive topic for insurance companies.

Minimizing (or rather accurately calculating) that economic risk is the backbone of insurance. If a company does it right, they survive; if they don't, they go bankrupt. Just like your age, type of vehicle, and driving record help a company determine how much financial risk they're insuring, other drivers with access to your vehicle are also a factor. If you don't want to list your roommate because he has his own car and insurance, he is still relevant to your insurance company because he could possibly drive your vehicle -- after all he has access to your keys and resides in the same dwelling that the vehicle is parked at night.

If you have managed to omit a resident driver from your policy, do not allow them to drive your vehicle -- EVER. The standard policy has certain safeguards built in to automatically VOID coverage for undisclosed operators. It could actually void coverage for yourself if the company discovers the policy isn't based on full disclosure.

All things considered, listen to your agent and cooperate regarding resident drivers and regular operators. You pay a reletively small amount for a policy that needs to be there when you need it. Why risk having your policy voided to try to save a few dollars monthly? Besides, it might even be free to list that resident operator.