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Welcome to Kreider and Smith Insurance.
Frequently Asked Questions:
Please click on a question to receive your answer.
Auto Insurance
Q: How can I save money when my child starts to drive?
A: There are many factors that affect the rates charged for youthful operators. If you have only two cars and two adult drivers, try to avoid adding the third car. If you have three cars and three drivers, the child normally must be assigned as a principal driver, regardless of the actual usage. Also, if you add a car for the child, consider one with a low enough value that you do not need to add physical damage coverage. If you must purchase comprehensive and collision coverage, consider selecting higher deductibles. When selecting a vehicle for a child, consider a "basic" car, rather than something very expensive or sporty. Also discounts are generally available for good grades and behind-the-wheel driver training. When your child goes off to college, if they are 100 or miles away from home without a car, you receive a significant discount on the car they would normally drive. If they do take a car, it will be rated based upon the school's territory factor, which can be much higher than the rates for our area of Pennsylvania.
Q: Does Uninsured Motorist coverage pay for my car if I am the victim of a hit & run?
A: No. That coverage is payable under Collision, and subject to the deductible. Uninsured (and Underinsured) Motorist coverage is optional, and is available to pay lawsuit awards to you, if an offending party has no insurance or inadequate bodily injury liability limits.
Q: Should I just buy the "minimum coverage" that I hear about in advertisements?
A: You can legally insure a car in Pennsylvania with state minimums, but must be aware that such coverage does not provide much protection if you cause significant damage to another vehicle or cause injuries. You are better off purchasing high liability limits and passing on optional coverages and consider taking higher deductibles.
Q: If I have an accident, will my rates increase?
A: You may see a rate increase at the renewal following an accident in which you were determined to be at fault. You may, however, have earned accident forgiveness on your policy. Ask your agent to check for you. Also, if the amount paid out is low, the accident may not cause a surcharge.
Q: My car was damaged while it was parked. Am I covered?
A: If you have physical damage coverage on the vehicle, you would be compensated for the amount above the applicable deductible. If it was vandalism, the Comprehensive deductible would apply. If it was struck by another vehicle (like a hit & run driver or a dent from a car door striking it), the Collision deductible would apply.
Q: Must I contact my agent as soon as I buy a new car?
A: Your current policy automatically covers a private passenger vehicle purchase for a limited number of days, but you should call (or have the salesperson call) your agent with specific information about the vehicle and any pertinent financing information and to confirm whether or not you want full (physical damage) coverage.
Q: What is the difference between Full Tort and Limited Tort?
A: The tort option relates to the ability of an insured to sue an offending driver for Pain & Suffering. Under Limited Tort, there must be serious injuries (as described in the policy language) or the party being sued must have committed a serious violation of the vehicle or criminal code. There are no such limitations if you have a Full Tort policy. Also, Limited Tort restrictions do not apply if you are suing an offending out-of-state drivers. Your tort option can also impact how much you might be able to collect under your own Uninsured and Underinsured Motorist coverage.
Q: My car has all sorts of safety devices and an alarm. Why isn't it a lot less expensive to insure?
A: Airbags only affect the price for First Party benefits (medical, income loss, accidental death). Alarms and disabling devices only affect Comprehensive. Both of these are relatively minor components of your total insurance cost.
Q: Why is my $35,000 SUV cheaper to insure than my 2-door hatchback?
A: The relative cost for Comprehensive and Collision is determined by many factors, and is fairly standardized, by use of a numeric symbol. The symbol is based upon the average cost/type of accident and typical driver profile that fits a vehicle. SUVs and minivans are generally family cars operated by adult drivers. Small cars are frequently operated by youthful drivers, and are often the subject of significant incidents.
Homeowners Insurance
Q: Why am I required to insure my home for so much more than the market value?
A: The amount of insurance is generally required to be the cost to rebuild. Older homes almost always cost more to rebuild than their market value. Failure to insure for 100% of the cost to rebuild could leave a homeowner with inadequate settlement funds in the event of a major or total loss.
Q: Why do I have insurance shown for Other Structures, if I don't have any?
A: This coverage was added as a standard component of all normal homeowners policies many years ago, when utility sheds became popular, and claims for these structures and their contents went unpaid, due to a lack of coverage.
Q: Do I need to buy special insurance for my child at college?
A: Generally, your homeowners policy provides sufficient protection. Personal property is covered as if it were in your home (up to 10% of your coverage amount). There are limitations for theft coverage if the child leaves things in the dorm room or apartment over a long break or summer. Check your policy for the specific number of days that the unit can be unoccupied.
Renters Insurance
Personal Umbrella Liability
Life Insurance
Q: What type of life insurance is the best deal?
A: In most cases, term insurance provides the best coverage for the most reasonable price. While it does not accumulate cash value, it is far less costly on an annual basis than a cash value policy (Whole Life or Universal/Variable Life). Children and older people looking for a limited amount of coverage are often best served by Whole Life insurance.
Q: What about the rates after the guarantee term expires?
A: After that period, the rates become age-based, and can be quite expensive (but the policy can still be continued, should changing health conditions warrant it). Thats why it is so important to determine what your future financial needs may be, and buy enough insurance for a sufficient guarantee period to cover your familys needs, in the event of an untimely death.
Q: I have life insurance where I work. Why do I need more?
A: Generally, your employer-sponsored plans do not continue if you leave that job. Also, the amount they offer is generally insufficient to cover your survivors long-range financial needs.
Q: I just quit smoking. Can I get a better rate now?
A: Most companies only offer their best rates to people who are tobacco-free for three to five years. Some will consider applicants for preferred rates after one year. Some even consider pipe and cigar smokers for reasonable rates.
Q: I am a business owner. How should I set up my insurance?
A: It depends upon the reason youre buying the insurance. If it is for your familys income benefit, you should pay for it with your own after-tax dollars, so the proceeds go directly to them, tax-free. If your company provides it, some or all of the premium may already show up as income on your annual K-1 or W-2. If the reason is to fund a buy/sell arrangement with other owners, each owner should hold a self-paid policy on all of the other owners, to fund the buyout of a deceased owners share from their survivors or estate. Benefits from company-paid policies are likely to be taxable as income. Consult your accountant to see what is best for you.
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