How do I know if I need insurance?

Most experts agree that auto, home and business insurance are the three types you need to have. Others to consider are life insurance and disability insurance. Because everyone’s situation is a little different, the answer really depends on what you own, what you do, and what your goals are. Do you have a car? Do you own a home? Do you run your own business? Does your employer cover health and life insurance? The best way to know if you need insurance is to chat with an insurance broker. They can suggest a personalized approach that fits your needs.

What is an insurance brokerage and what are the benefits of working with an insurance brokerage?

An insurance brokerage doesn’t represent just one insurance company (like Travelers or Liberty Mutual). They shop among multiple insurance companies on your behalf to help you get the most coverage at the best price. 

Sometimes, insurance isn’t simple. With an insurance brokerage, you get a real person working for you — not an algorithm — who can answer your questions in real time and consider the nuances of your individual needs to help you find the best solution. You’re a person, not a template. When your circumstances are complex, a brokerage’s knowledge of a variety of insurance companies rates, plans, and limits can save you money while keeping you protected. For example, on your policy you can list your car as being based in San Diego where you live, but what if you take it to Mexico every other week? That’s a bit more complicated. Lastly, unlike insurance companies, a brokerage is constantly shopping for you to make sure you walk away with the best deal, year after year. Insurance apps give you one price for one carrier, and when you need to contact them, you’ll get a different person every time. With Peck & Peck, you’ll always get the same person.

What are the standard coverages I should get on my policy?

You should have property coverage (for your vehicle, your home and everything inside of them) as well as liability. We recommend reviewing your deductible limits as well.

What is liability?

If you accidentally cause an injury or property damage, liability insurance covers medical and legal expenses or other costs that you may be legally responsible for.

What does renter’s insurance cover?

Renter’s insurance covers everything you own inside a building (TV, laptop, clothes, etc.) and general liability. You don’t own the building itself, so you don’t need to insure it.

What is dwelling fire insurance, and why is it important?

If you’re a landlord and your building burns down, dwelling fire insurance is important. It covers the building itself (not the belongings inside it) and liability.

What is covered under an auto policy and what isn’t?

An auto policy covers a vehicle and includes liability insurance. Nothing inside the car is protected (like a cell phone or laptop) — that’s covered under a homeowners or renters insurance policy.

What is commercial liability?

Commercial liability insurance protects a company against general business risks.

What are the top 3 claims that aren’t covered, and why?

Wear and tear. Insurance is supposed to make you whole, not get ahead of the game. Your coverage can’t reimburse you for accidents or damages due to your belongings wearing down over time (think bald tires on your car or a leaky 90-year-old roof that you haven’t replaced).

Wildfire self-evacuation as lost business income. Commercial insurance can include protections for lost business revenue. However, In the event of a wildfire in your area, if city authorities haven’t officially instructed you to evacuate but you choose to leave, damages to your business or inventory are not covered. For example, if your unattended business experiences theft, the insurance company will not accept the claim because you were not ordered to leave the area. 

Road work obstructing access to your business as lost business income. If road work to improve access to your business temporarily hinders customers from easily accessing your store and causes a decrease in sales, insurance will not cover any potential earnings you may have lost.

Power outage as lost business income. If a local electric company is responsible for a power outage that has interrupted your ability to sell goods (take a grocery store, for example), insurance will not cover any potential earnings you may have lost.

What are the top 3 insurance pitfalls?

Assuming your high-value items are covered under home or renter’s insurance. If you have $2,000 worth of computers and a 1950’s vintage wedding ring with 10 diamonds, you should list those specific items and their value in your policy to make sure they’re protected. (This process is called “scheduling.”)

Being over-insured. Buying more insurance than you actually need is, well, unnecessary. For example, if you buy a building for a million dollars, and you decide you want to insure it for $1.2 million, you’re over-insured. Remember, the land isn’t going anywhere. You need to subtract the value of the land when calculating what it would cost you to reconstruct the building if an accident happened.

Being under-insured. Similarly, buying too little insurance is problematic. Say you purchase a building for $500,000, and the cost to rebuild it is $250,000. If you only insure it for $100,000, your policy won’t cover the full cost of rebuilding the structure.

What can I insure?

Let’s start with what you can’t insure. You can’t insure anything you don’t own. So, if you’re a landlord, you can’t insure any of the belongings your tenants have inside because you only own the building itself. Similarly, a tenant can’t insure the building they live in because they don’t own it.

You can only insure things you own or have a vested interest in (like an LLC or a Trust, for example). When you make a large purchase (like a car), let your insurance broker know so they can add it to your policy. Only items that your insurer knows about are protected.

*Pro tip: If you buy a used car, make sure the title is in your name. You must legally own the vehicle before your insurance can cover it.

How do you calculate cost?

As a brokerage, we don’t calculate the cost of your policy — insurance companies do.

How much is auto insurance?

Insurance companies decide your auto insurance rate by considering your driving record, the type of car you drive, and the car’s mileage, among other factors.

How much should I insure a building for?

Lots of factors go into determining this. Insurance companies will want to know how big the building is, what it’s made out of, if there’s a working sprinkler system, etc. It’s important to know that every insurance company will weigh these factors differently. That’s why we shop around for you to make sure you’re getting the best coverage at the best rate.

How can I keep my insurance costs down?

Each insurance company offers a different set of discounts. Some companies give students and teachers reduced rates or discount buildings with alarm systems, for example. Check with your insurance agent to find out if you’re eligible.

Have more questions? We are happy to help. 
Call 650-592-5591