Oak Creek Insurance Agency

FAQ's

General FAQs

Q: What kinds of questions should I be expected to answer when I apply for an insurance policy? Why do insurers need so much information?

A: When you apply for an insurance policy, you'll be asked a number of questions. Among other things, the agent might ask you your name, age, gender, and address. You'll also be asked a number of other questions which will be used to help determine which policy is right for you.

When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, they 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 a young driver with traffic tickets will. 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, they will also need information about the vehicle you drive and how you drive it 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.

Q: What are the advantages to using an agent to purchase insurance?

A: By using an agent to purchase insurance, the policy holder receives more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. An independent agent is able to deliver quality insurance with competitive pricing and personalized service.

Auto FAQs

Q: I have an older car that currently has a very low market value. Do I really need to purchase automobile insurance?

A: 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's 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.

Q: What's the difference between Collision Physical Damage Coverage and Comprehensive Physical Damage Coverage?

A: Collision Physical Damage Coverage 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 Physical Damage Coverage provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm would be covered under your comprehensive coverage.

Q: What factors can affect the cost of my automobile insurance?

A: A number of factors can affect the cost of your automobile insurance, some of which you can control and some that you can't.

The type of car you drive, the purpose the car serves, driving record(s), and where the car is garaged can all affect how much your automobile insurance will cost.

Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer accidents than single people do.

Homeowner FAQs

Q: What are some practical things that I can do to lower the cost of my homeowners insurance?

A: There are a number of things you can do to lower the cost of your homeowners insurance. It's 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 to look into these discounts for you.

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.

Q: What does homeowners insurance cover?

A: The typical homeowners policy has two main sections: Section I covers the property of the insured, and Section II provides personal liability coverage for the insured. Almost anyone who owns or leases property has a need for this type of insurance. Usually, homeowners insurance is required by the lender to obtain a mortgage.

Q: What is the difference between "actual cash value" and "replacement cost"?

A: Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Q: What factors should I consider when purchasing homeowners insurance?

A: Here's a checklist of things you should consider when you purchase homeowners insurance:

1. 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.
2. 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?
3. Once you've decided on the coverage you want in your homeowners insurance policy, consult us. We'll be able to help you determine if there are any gaps in coverage you might not have been aware of and explain the details of the policy's exclusions and limitations, as well as recommend an insurance company that will live up to your expectations.

Q: Where and when is my personal property covered?

A: 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.

Q: Do I need earthquake coverage, and how can I get it?

A: 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 earthquakes, volcanic activity, and other types of earth movement. This coverage may be available by endorsement for an additional charge. We can help you weigh the costs and benefits of this coverage before you decide to purchase.

Life FAQs

Q: How much life insurance should an individual own?

A: Rule of thumb suggests an amount of life insurance equal to 6-8 times annual earnings. However, many factors should be taken into account when determining the right amount of life insurance for you and your family.

Important factors include:

• Income sources (and amounts) other than salary/earnings
• Whether or not you're married and, if so, what your spouse's earning capacity is
• The number of individuals who are financially dependent upon you
• The amount of death benefits payable from Social Security and from an employer-sponsored life insurance plan
• Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need, etc.)

Calculating the correct amount of life insurance to buy is not as simple as it appears. We recommend contacting us for help determining the right amount of coverage. As independent agents, we are unbiased advisors who will help you avoid buying too much, show you appropriate optional coverage for your needs, and recommend a company that will best serve your interests.

Q: What about purchasing life insurance on a spouse and/or children?

A: In certain circumstances, it may be advisable to purchase life insurance on children; generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s).

It's of utmost importance that the income-earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance. This should be done before contemplating the purchase of life insurance on children or on a non-wage-earning spouse. Life insurance on a non-wage-earning spouse is often recommended for the purpose of paying for household services lost due to this individual's death. In a dual-earning household, it's important to protect the income-earning capacity of both spouses.

Q: Should term insurance or cash value life insurance be purchased?

A: This is a difficult question which can only be answered depending on your personal circumstances.

First, recognize that in any life insurance purchasing decision, two questions must be answered:

1. How much life insurance should I buy?
2. What type of life insurance policy should I buy?

Question #1 should always be resolved first. For example, the amount of life insurance that you need may be so large that the only way you can be afford it is through the purchase of term insurance, since term insurance has a lower premium.

If your ability to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the second question: what type of policy to buy. Important factors affecting this decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk.

Q: How does mortgage protection term insurance differ from other types of term life insurance?

A: The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25, or 30 years. Although the face amount decreases over time, the premium usually remains the same. Further, the premium payment period often is shorter than the maximum period of insurance coverage. For example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.

Q: Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan?

A: Yes. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured's death. Although a lender may offer a mortgage protection term policy to you, the lender rarely requires it.

Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy?

Credit life insurance is frequently more expensive than traditional term life insurance. Further, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advisable due to its relatively high cost.

Benefits FAQs

Q: What are Group Benefits Plans?

Group benefits plans are plans that cover more than one individual and are sponsored by an employer, association or other organization. Group plans are generally governed by state laws. Group benefits plans can include health, dental, vision, life and disability coverage that is extended to members in the group as well as their dependents.

Q: Are there advantages to Group Plans verses Individual Plans?

There are some advantages to group plans. For example, members in a group health plan (generally employees of an employer) are not declined for coverage due to their existing medical conditions. If these same individuals applied for individual health coverage they would have to disclose medical information to the carrier and could be declined.

Q: How is the cost of a Group Plan determined?

The demographics of the group (gender and age of individuals to be covered) are used to determine the monthly premiums. If you asked Oak Creek for a group benefit plan quote, we would ask you for a census with the gender and age of all your employees. This information gets turned into the carrier and the monthly premiums are set.

Q: As an employer, am I required to pay the cost of monthly premiums for the group plan?

Group benefit plans do require the employer pay a portion toward the coverage. For example, in group health, the employer is required to pay at least 50% of employee-only monthly premium. Depending on the size of the group, this requirement can be a higher percentage. For some of the other benefit plans like life, dental, disability and vision, the employer can contribute or chose not to do so.

Q: As an employer will I have multiple choices for plan design and cost?

Yes, for all lines of benefit coverage, there are multiple plan designs and corresponding cost. Oak Creek benefit consultants routinely go to multiple carriers on your behalf and present an employer with many options. For example, in health care there are fully insured plans: PPO plans, HMO plans, HRA plans, as well as self-funded plans.

Q: What is Individual Health Insurance?

Individual health insurance means that it is not connected to a business. You can purchase an individual policy for your whole family.

Under individual policies, the following rules apply in most states:

• Not Guaranteed Issue – Applicants can be turned down for coverage based on their health status.
• Guaranteed Renewability – Your health insurance cannot be cancelled if you become sick.
• Limits on Pre–existing Conditions – Insurance Companies can impose exclusion riders that eliminate coverage for pre-existing conditions.

Finding the right balance of coverage and cost can be challenging. The first step is to evaluate your needs and understand your health insurance options. Your budget, physician preferences and health requirements will all have a hand in deciding which type of plan is best for you.

An independent agent well-versed in individual health policies can help you sort through your options and find the policy that’s right for you and your family.

Q: What is Long-Term Care?

Because of old age, mental or physical illness, or injury, some people find themselves in need of help with eating, bathing, dressing, toileting or continence and/or transferring (e.g., getting out of a chair or out of bed). These six actions are called Activities of Daily Living and sometimes referred to as ADLs. In general, if you can’t do two or more of these activities, or if you have a cognitive impairment, you are said to need "long-term care."

Q: What is Disability Insurance?

Disability Insurance is a line of insurance, which includes coverage that is designed to protect the insured against a loss of income resulting from illness or injury.

There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD). Short-term disability policies have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years. Long-term disability policies have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.