Illinois Alliance Insurance provides these questions and answers of a general nature to provide basic insurance information. Only your insurance agent can provide you with the most up-to-date information about insurance coverage and the limits you need.

These questions are broken down into Home, Home Property and Auto.

   
How much insurance do I really need?
  The last thing you need is to find out after your home has been damaged is that you don't have enough insurance. Likewise, you don't want to be paying for insurance you really don't need either. There are ways to make sure you have the right protection - without having more than you need. First, you need to estimate how much your house would cost to completely rebuild it. At Illinois Alliance, we use industry standard Marshall and Swift/Boeckh software to calculate the replacement cost of your home.
   
What is the difference between "actual cash value" and "replacement cost" protection?
 

"Actual cash value" is the amount your property is worth at the time of the loss. It is, essentially, the cost to replace the item minus depreciation, which takes into account the loss of value due to age and normal wear and tear. The actual cash value on a piece of property, whether it is your home, stereo or favorite chair, may be much less than the cost to replace it new. When insurance companies settle on this basis, you may receive a check for an amount much less than you need to replace the item.

"Replacement Cost" is the amount to replace your house, other buildings, and personal property without any deductions for depreciation. Your agent can help you calculate what your Replacement Cost should be.

   
Why is it that my bank requires me to purchase my full mortgage amount, when my insurance company says I can purchase a lesser amount and still be adequately covered?
 

Some lien-holders require you to purchase insurance that covers the entire mortgage amount. However, your insurance company may indicate you really need a lesser amount since home insurance basically covers the house and additional structures, not the land which they sit on or the market value of your home due to its location.

 
I've just renovated my home. Should I tell my insurance company?
  Most definitely, especially if your renovations cost more than $5,000. With all the hard work and money that went into your renovations, it's important that you are insured for the right amount so that if you have a loss, you'll get what you need to cover the damages. Most likely, the amount of insurance you now have is inadequate with your recent renovation.
   
Is my computer covered by my homeowners insurance policy? What about the peripheral devices and software?
 

Many companies include protection for computers; some as part of their normal policy, some as an extra available coverage. Check with your agent for details.

If you use a computer for your home business (and not as part of business for your employer), we recommend you check with us for specific coverages which you would need.

   
Is my baseball card collection covered by my insurance policy?
  In most cases, yes; up to certain limits. We recommend you check with your insurance company for the specifics and limits on your policy
   
I have a large amount of tools in my shed. Will my insurance policy cover them if they are stolen or damaged?
  Yes. Your insurance policy contains coverage for personal property, which would include your tools provided they are stolen (up to certain limits) or if the damage is caused by a covered peril. See your specific policy for details and coverage limits.
   
Will my policy cover me for earthquakes?
  Basic homeowners insurance policies do not cover damage resulting from earthquakes. You must purchase this extra coverage. If you are concerned about your house being damaged by an earthquake, call us for more information.
   
Will my insurance company cover damage caused by flood?
  Insurance policies do not cover any damage caused by floods. If you think flooding is a possibility in your area, you should consider purchasing special flood insurance from the National Flood Insurance Program (NFIP) of the U.S. Government. Insurance companies do not underwrite flood insurance and the NFIP is the primary way to protect your property from the devastation of floods. Contact us for information on how to buy this coverage.
   
I have antiques and fine arts in my home. What kind of coverage would adequately protect them?
  You need to list invaluable items such as these on a separate endorsement. This is known as a Scheduled Personal Property (SPP) endorsement, which is added to your basic homeowners policy. SPP acts like a mini-insurance policy on the specified and listed items, provides "all-risks" coverage (except for a few exclusions), and there is no deductible. This excludes scheduled watercraft.
   
I have a very valuable piece of jewelry. Is this covered by my basic policy?
 

If you own an item of specific value, you can add an endorsement, called Scheduled Personal Property (SPP), which acts like a mini-insurance policy on the specified and listed item. You can also add Extended Coverage, which increases protection on jewelry, watches and furs (up to an aggregate limit for all of these items together, which is specified on your policy). Both provide all-risk coverage (except for a few exclusions). With SPP, there is no deductible, except watercraft.

Many people get extra protection on jewelry, cameras, coin and stamp collections, fine arts, furs, golfing equipment, guns, musical instruments, outboard motor boats, and silverware/goldware.

If you have an item which you believe needs extra protection, contact us for more information.

   
I run a business from my home. What type of insurance protection does my home policy provide me with?
  There is no coverage for property and liability damages which arise from a business you own and operate. If you run a business from your home, call us for the best business-related policy for you.
   
I have a very expensive wardrobe. Do I need additional protection?
  In most cases, you won't have to do anything special. Clothing is covered under Coverage C - Personal Property. It is typically 50% of the insurance you have on your dwelling (Coverage A). You can get up to 75% if you have what is called Replacement Cost on your belongings. This coverage gives you the amount that it would cost to replace the belonging versus the actual cash value. With expensive items, such as furs, you may want to itemize them separately with a Scheduled Personal Property endorsement. It is important, however, to inventory your property to see if this amount is enough for you. This includes all your furniture, clothing, stereo equipment, rugs - in essence, everything you have inside your home.
   
My car has been broken into and my skis stolen! Will my home insurance cover this?
 

Yes. Your home policy includes your possessions which are temporarily away from home.

   
What If My Assets Exceed The Highest Liability Limit You Offer?
  You should consider an excess liability policy. Illinois Alliance offers a Personal Excess Liability ('Umbrella') policy.
   
How Much Liability Protection Do I Need On My Automobile Policy?
 

Even the most careful driver can make a mistake and cause an accident. The next time you get in your auto, it's possible you could be involved in an accident in which someone else is seriously injured. You don't even have to be 100% at fault in the accident to face financial liability.

You are buying Bodily Injury coverage to protect your assets in the event of a judgment against you. Your per person Bodily Injury limit should be at least as large if not larger than the value of the sum of the following assets:

  • Equity in your home (Market Value - Mortgage)
  • Cash Value of your vehicles
  • Stocks
  • Bonds
  • Bank Accounts
   
What Is The Difference Between Collision And Comprehensive Coverage?
 

Comprehensive

This optional coverage pays for damage to your auto caused by perils other than a collision. This includes fire, theft, hail, vandalism, riots, damage caused by animals, and glass breakage. There are various deductible options that you can select for this coverage.

Keep in mind that not every non-collision related loss is covered under Comprehensive. For instance, your damages are not covered if they are caused by wear and tear, freezing, mechanical breakdown or road damage to tires by potholes. Also, certain property such as tapes and compact disks are not covered. Finally, make sure to notify your insurance company of any customization you do to your vehicle after it is purchased or it may not be covered.

Note that sound equipment like CD players, AM/FM cassettes, and TV's are covered under your auto policy if they are permanently installed.

Collision

This optional coverage will pay for damage to your auto regardless of who causes the accident. Collision Coverage applies if your auto is hit by another vehicle or if your auto hits other objects that cause damage to your vehicle. There are various deductible options which you can select for this coverage.

   
Is My Friend Covered Under My Automobile Policy If I Lend Him/Her My Covered Automobile?
  Whenever you give permission for a friend or associate to borrow your car, he or she is covered under your automobile insurance policy.
   
Should I Put My Teenager On A Separate Policy With Lower Bodily Injury Limits To Save Money?
  It would be wise to have all children that you consider as dependents on your policy. An injured party will most likely go after the parents assets if the at fault minor child has insufficient insurance coverage. Also, bear in mind that inexperienced drivers have accidents at a much higher rate than experienced drivers do.
   
Who do I list on my policy?
  Every member of your household should be listed on the policy including non-drivers and children.
   
What Happens If I Am A Passenger In A Friend's Car And I'm Injured As A Result Of An Uninsured Motorist?
 

If your friend has Uninsured Motorist Bodily Injury (UMBI) or Underinsured Motorist Bodily Injury protection (UIMBI), you will be covered under his/her policy. If your friend does not have UMBI or UIMBI, you will receive protection under your UMBI or UIMBI coverage.

   
Do I Need Collision Protection On My Automobile?
 

Many people wonder if they should always purchase Collision protection. In order to make the decision, you need to know the current value of your auto and the cost of coverage. Generally speaking, vehicles decline in value as they age. Only you can decide if collision coverage is necessary after considering whether the cost of insurance is more economical than the cost of repairing or replacing the car at your own expense. Nonetheless, here are some guidelines to help you make a decision that is best for you.

If your auto is leased or financed, you are probably required to maintain Collision as well as Comprehensive coverage.
If the value of your vehicle is only slightly higher than the deductible chosen, then it makes no sense to purchase Collision or Comprehensive coverage.
If your 6 month premium for the sum of these coverages (Collision and/or Comprehensive), when multiplied by 4, is greater than the value of your auto, then it is not economically feasible to purchase physical damage for that vehicle.

   
If I want Comprehensive and / or Collision coverage, do I need to choose it on all my insured vehicles?
  You can make Comprehensive and / or Collision coverage choices individually for each of your insured vehicles.
   
If Another Driver Hits My Vehicle, Do I Have To Wait For The Other Driver To Pay For Damages To My Automobile?
  Not if you chose Collision coverage. If you chose Collision coverage, we will pay for damage to your car (the cost of damage to your car less the deductible) regardless of who is at-fault in the accident. If the other driver was at fault, we will try to recover the cost of the collision damage from the driver and reimburse you for any deductible charges you may have paid.
   
I Am A Very Safe Driver And I Have Never Had An Accident, Should I Still Buy Comprehensive And Collision Coverage?
 

You may be an excellent driver but consider the following possibilities:

  • We can all make mistakes.
  • An uninsured driver could hit you.
  • You could be hit while parked.
  • Comprehensive covers you for losses caused by things other than motor vehicle accidents.

If you believe all of the following items are true, then you might consider carrying only Comprehensive coverage:

  • You and all family members are better than average drivers.
  • Your auto is 5 or more years old.
  • You can afford to purchase another vehicle without any insurance recovery if your auto were totaled tomorrow.
  • Your collision premium, when multiplied by 8, is greater than the value of your auto.
   
How Large Of A Deductible Should I Select?
  Well, the larger the deductible the greater your savings, and risk, will be. Select a deductible based on the largest amount that you are comfortable paying for repairs to your vehicle in the event of an accident.
   
My Automobile Has Been Stolen. Will My Insurance Pay For A Rental?
  If you carry Comprehensive coverage on your stolen vehicle, you will be reimbursed on a rental up to a certain limit. However, if your auto is in the repair shop due to an accident, your insurance company will pay for a rental if you have purchased optional Substitute Transportation coverage.
   
Does My Automobile Insurance Policy Extend Coverage to Rental automobiles?
 

The coverages you have on your present policy also applies to rental cars. However, if you don't have Collision or Comprehensive on your current automobile policy, you will not have them on a rental car either.

There may also be gaps in your insurance that will not cover the time a rental vehicle is absent from the rental fleet while it is being repaired or replaced. Check with your insurance consultant to ensure your protection.

   
Why Does My Insurance Premium Go Up When I Have A Ticket or Accident?
  Statistics have shown that people who have recently been involved in an accident or have received a ticket are more likely to have another accident than those individuals whose driving records are incident free. Consequently, we charge a premium that most accurately reflects the likelihood of an individual having another accident within their policy term.