General Questions

What States is your agency licensed to do business in?

Michigan, Minnesota, Wisconsin and Florida

Have you checked all of your markets for the best price?

Yes, as an independent agency, we are able to access more markets to find the best product and price to suit our clients’ needs.

Which limit of liability should I choose? Doesn’t the attorney usually just settle for the limit on the policy?

An entity must assess what is at risk in terms of exposed assets and likelihood of incident or injury as a result of their operations or products. If the limit of liability is very low and the owned assets are high, the disproportionate liability limit leaves the entity exposed. Litigates don’t necessarily simply settle for the policy limit.

What is the difference between Replacement Cost and Actual Cash Value and why can’t I just insure my building for what I paid for it?

Replacement cost pays to repair or replace with like kind and quality with no deduction for depreciation. Actual Cash Value is full replacement cost less depreciation taking into account the age of the property. Market value is very rarely the some amount as replacement cost or ACV and may not be adequate at the time of the loss.

What is co-insurance and how does it work?

It is a specific percentage of the property limit (either RC or ACU) that is the minimum required amount that must be carried, a penalty will result at claim time.

Are payment plans available?

Payment plans vary by company.

Can I buy flood insurance?

Only if the property you wish to protect is located in a designated flood zone.

Why did my rates/premium go up?

Because in the last few years, insurance companies have experienced a substantial increase in claims and are paying out more in claims than they are collecting in premiums. They have also been affected by 9/11.

Worker Compensation Questions

How does the state compute my experience mod. factor, and when does a problem claim cease to affect me?

Your carrier reports your actual audited payrolls by class code to the state each year along with claim amounts paid on each claim (wage loss and medical) for that policy term. Previous year figures for claims are also updated each year on any open claims. Three years of history are used at any given time on a mod worksheet- 2 years prior to the current year, 3 years prior and 4 years prior. Each year, the oldest year “falls off.” So if you have a “problem” claim, it does eventually fall off the mod worksheet and ceases to affect you- even if it is still open and active.

How does an insurance audit work?

At the beginning of a policy term, the payroll and/or sales figures are estimated. At the end of a policy term the insurance company will audit the payroll and/or sales numbers to ascertain what the actual figures payroll and/or sales figures were and will adjust the premium for that policy term accordingly.

Should I pay some of my employees’ bills for injuries instead of submitting them all so they don’t affect my mod factor?

No. State law prohibits an employer from non-reporting of injuries. All injuries must be reported immediately to your insurance carrier. In an effort to encourage compliance with these laws, the state recently made a change in the computation method of the Experience Mod. Now only 30% of medical bills paid are used toward the development of the mod. However, 100% of wage loss still applies. To deal with frequent concerns, the state now counts all medical-only claims that are under $2,000 (incurred) as one claim. All that are over $2,000(incurred) are counted separately. Also, a form of “stop loss” kicks in after $5,000 has been paid and depending on the total paid, the mod is developed using a proportionate factor but the actual amount paid will not be levied against the employer’s mod.

Are volunteers covered under my Workers’ Compensation policy for injury? If not, will the General Liability pay?

No, volunteers are not automatically covered under a Workers’ Compensation policy, and it’s doubtful that any carrier will endorse a policy to include them. Because the volunteer, by its very definition, is not a compensated employee, they are not subject to the compulsory State law. If a volunteer as part of the “Who is an insured” definition of the General Liability policy, they will not be afforded coverage under the General Liability because of the “insured v. insured “ exclusion and the fact that an insured cannot collect from their own liability policy.

How do I make sure that the employees I hire don’t have a “history “ of injuries at previous employer’s?

You don’t. A personnel director must be vigilant in the screening process when hiring employees and check references, etc, but legality will limit the types of questions that can be asked. Check with an employment attorney or Human Resource publications. The bottom line with regard to previous injuries is that an employer hires an employee with all their health problems and an aggravation of an old work related injury will become a claim on your policy. The State will always err on the side of the employee in any “gray” areas.

What does remuneration under WC include?

Wages or salaries, bonuses, commissions, overtime, holiday pay, etc.

How much will my workers’ compensation policy cover for medical and loss of wage?

100% medical and 80% loss of wage.

Does it pay immediately?

No. If off for more than seven days, starts on day eight. If off for 14 days or more, it is retroactive to Day 1.

Personal Auto Questions

Is there coverage for rental vehicles extended from an auto policy?

The insured has the same coverage for a rental vehicle as is afforded the highest rated vehicle on the policy in the Continental U.S. However, administration fees are not covered and, in most cases, there would be no coverage if the rental agency charges you for the time the vehicle cannot be rented. If the rental car is totaled, the rental car company could require you to pay the cost to replace the vehicle. Again, in most cases, the insurance company will only pay the actual value of the vehicle. There is also the possibility that the insured’s credit card may be frozen until payment is received for any damages.

Do I have coverage extended to a rented auto if I am listed on a policy as a driver?

No. Coverage only extends to the named insured on the policy.

Regarding Michigan No Fault insurance, who pays for the damage to an insured vehicle when it is determined the insured was not at fault?

The insured pays his own damages first. If there is no physical damage on the insured vehicle then a mini tort claim may be filed for recovery of up to $500.

Who pays for injures in auto accidents, if I am not at fault?

Insurers own medical coverage will pay first, auto Personal Injury Protection will pay second unless you have no medical then auto pays first. If permanent bodily injury occurs, then there are other avenues that can be taken.

When do I have to add my youthful driver to my policy? (This driver is just starting driver training.)

The youthful driver should be added to the policy when he/she is able to drive alone in the vehicle.

Do I have any coverage for physical damage to my auto if I do not carry collision coverage.

Yes, if you know who hit your vehicle. If your vehicle is struck while legally parked, the other party’s insurance must cover your damage under Personal Property Insurance.. If your vehicle was moving when struck, you can file a mini tort claim to cover your damage (or a deductible) up to a maximum of $500 under Michigan law. Payment of mini tort is the responsibility of the driver that is at fault.

Insured has recently retired and is now receiving Medicare Benefits. Should his Personal Injury Protection coverage be reviewed?

Yes. Medicare does not cover injuries resulting from an automobile accident. Therefore, adjustments may need to be made to the policy to cover this exposure.

What are BI and UM/UI?

BI is Bodily Injury – Injury caused by you to another party. UM/UI is Uninsured Motorist/Underinsured Motorist coverage. This is coverage for you if the other party is at fault and they either do not have any insurance or are underinsured.

How long do insurance companies charge for violations?

It depends on the violation. Minor violations are charged for up to three years. Major violations can be charged for up to five years.

What is the difference in the three collisions?

Broad Form Collision: Pays whether you are at fault or not, but you only pay the deductible if the accident is chargeable to you. Regular Collision: Pays no matter who is at fault, but you always pay the deductible. Limited Collision: Only pays if someone else is charged with the accident.

Is my neighbor covered if he drives my car?

Yes, as long as he has your permission.

Why do you ask if I have medical insurance?

Personal medical insurance may or may not pay medical billings associates with an automobile accident. Personal Injury Protection (PIP) is a required coverage in Michigan and can be coordinated with your own health insurance at a savings to you.

What is the MCCA?

Michigan Catastrophic Claims Association. It is a fee that the insurance companies pay to the state to be put into a fund for catastrophic claims over $250,000. Medical coverage under an auto policy is unlimited. However, once a claim exceeds $250,000, the Michigan Catastrophic Claims Association is the fund that pays the medical bills. Eventually, the insurance companies will be paying the first $500,000, so we should see this charge decrease.

Why should my insurance pay if it was not my fault?

Because Michigan is a no fault state, the only time the other party pays for your damage is if your vehicle is parked. If you do not carry collision, then you can collect up to $500.

Do I have to carry medical coverage?

Yes, this is a mandatory coverage. We can get you a slight discount, however, if you have your own medical insurance that will cover you in an auto accident.

Do I have to carry wage loss coverage?

If you are retired, we can waive the wage loss coverage. If you have disability coverage we can correct the coverage accordingly for a slightly lower premium.

Can I just get glass coverage?

Glass coverage is part of the Comprehensive coverage.

Can I have PLPD and towing?

Comprehensive or Collision coverage must be carried in order to carry towing coverage.

If I am involved in an accident and my car is tied up for repairs, will my policy cover the cost to rent a vehicle?

Only if Rental Reimbursement Coverage is in place.

Is a deer strike covered under Comprehensive or Collision coverage?

It depends on the company.

Do I have to pay my deductible if my vehicle is involved in a hit and run?


Home Owner Questions

The insured has a “Dwelling Under Construction” clause on their policy. When does this have to change or does it?

Yes, Dwelling Under Construction clause should only apply for 1 year. When the workers or insured have completed the home, the insured should call and advise the agent/agency. At that point, the Dwelling Under Construction clause is removed, coverages are re-evaluated, photos are taken and the Guaranteed Home Replacement Cost endorsement can be added.

Why do I need to insure my home for its replacement cost if I don’t intend to rebuild or replace it?

A Homeowners policy requires that the dwelling be covered for at least 80% of what it would cost to replace it.

How do I determine how much insurance I should carry on my home?

This is ascertained by working closely with your insurance agent, who will gather the necessary information needed to conduct a replacement cost evaluation. This evaluation will indicate the amount of insurance needed to replace your dwelling using current construction cost information.

Does my homeowners policy cover my basement leaking?


Does my homeowners policy cover my recreational vehicles?

No. These items must be specifically scheduled.