Frequently Asked Questions
Why should I use an Independent Agent?
How do I report a claim?
What do I do if I have a claim?
How do I make a payment?
What is bundling?
I've never heard of these companies? Are they good?
What is Property/Casualty Insurance?
What are the parts of Auto Insurance?
What is an Umbrella?
What is a BOP? Do I need one?
How can I determine the financial strength of my insurance company?
Glossary of Insurance Terms
Why should I use an Independent Agent?
When the time comes to buy a car, usually you wouldn't purchase the first one you see. What if one day the automobile industry decided to make only one make and model of car. You wouldn't have a choice!
The same is true for insurance. You need insurance to drive a car, buy a home, run a business, and protect your family's financial future. However, if there was only one insurance company that offered only one type of insurance, you wouldn't have a choice. The only solution would be going to that one company.
With an independent insurance agent, you have choices. Independent agents are not tied to any one particular insurance company. One of the advantages of using an independent agent is that they work to satisfy your needs. You are using an expert for an important financial decision.
An independent agent represents several companies that they can approach to find you the best coverage at the best price. When you buy insurance, whether it's for your home, car, or business, you want an advocate who will properly assess the risks you face and give you the most objective picture of the insurance marketplace.
With the information obtained by your independent agent, you will be able to make an educated final decision based on your needs.
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How do I report a claim?
The easiest way to report a claim is by calling our office directly at 410-628-6520. You can also contact us via the “contact us” tab on this website at any time. If you want to report a claim outside of normal business hours, you can call the company directly at the phone number listed on your policy (or go to their website using the “Carriers” tab on our website).
If you do call the insurance company directly to report a claim, we ask that you let us know, so we can start processing the claim here at the agency in a timely manner
What do I do if I have a claim?
When it is time to make an insurance claim, the more prepared you are, the more smoothly it will go. Be familiar not only with your policies but also with the steps you should take to file a claim.
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Preventive Measures
It's important to know beforehand what to expect from the insurance company. When you buy any insurance policy, read the contract carefully and learn specifically what is not covered. Know what numbers to call and the type of information you will need when speaking with a claims agent. It's also a good idea to take an inventory of your belongings and keep the list in a safe-deposit box. Make sure to include:
- Descriptions of possessions; for example, the makes and model numbers of electronic equipment and appliances.
- Photographs or a videotape showing the condition and quality of your insured items, especially jewelry or antiques and collectibles.
- Appraisals of expensive items such as antiques, artwork, furs, and jewelry.
- Receipts documenting purchase prices; canceled checks or charge-card statements also can be used.
When Trouble Strikes
File a complete and accurate claim as soon as possible. Take the time to fill out everything the way the insurance company wants it. Or, if you are on the phone with a claims agent, be extremely detailed in your descriptions and be certain that all your information is correct.
- File a police report in the event of theft or vandalism. Your claim may be denied if you don't.
- Write a detailed account of any incident immediately after it occurs so that you are more likely to remember what happened.
- Take photos of any damage.
- Telephone your agent and send him or her a copy of the police report. Follow his or her instructions on how to proceed.
Filing a claim can be stressful, but being properly prepared and knowing what to expect will help move the process along, possibly allowing you to receive the funds you need to cover your losses in a timelier manner.
How do I make a payment?
Most of our insurance companies are "direct bill", which means the insurance company sends a bill or invoice directly to you. You send the payment directly back to the insurance company and that's that. If your due date is very close and you don't want to send the payment in the mail, you can always bring it to the office and we will apply the payment for you. You also have the option of paying online (if your company allows it), or calling the company by directly. With most companies, we can take a credit card or e-check over the phone.
If you aren't sure what to do or what to send, don't hesitate to call us. We'll try to make it as easy as possible for you.
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What is bundling?
Bundling is the term used when you buy more than one insurance policy from the same company. In turn for having multiple policies with the same company, you receive a discount on both policies. The amount of discount varies with each company. The most common bundle is Homeowners and Auto policies.
I'm sure you've seen a lot of advertisements for bundling across all the forms of Media, and you may ask yourself; Do I have to bundle? Will it save me money? The definitive answer is maybe…
Of course having multiple policies provides a discount. But the ads you see are for big companies, where it's one price, take it or leave it. As an independent agent, with access to multiple companies, we see bundling as being the best value only about 50% of the time. With access to many companies, we might be able to find better coverage and better pricing in two different companies, that result in an overall lower cost than it would be bundling. Of course each situation is different. Some will find savings with having their policies in the same company, and some will not. That's why we are here, to find the coverage to fit your needs for the best price we can find!
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I've never heard of these companies? Are they good?
You haven't seen advertisements for most of these companies because they only work through independent insurance agents like us. These companies essentially rely on us to be their marketing department. When we write policies for them, and the customer is satisfied, it promotes them. Word of mouth is the best advertising out there.
All of the companies that we represent are rated A or better by A.M. Best. We only work with companies that have nothing less than stellar performance in service, with strong financial stability. We want to earn your trust, and we can't do that with a substandard insurance carrier.
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What is Property/Casualty Insurance?
Property-casualty insurance practices in the United States are based on British practices and started with marine insurers located in major U.S. ports. Even when our nation was young, we were concerned with protecting ourselves and our property and not much has changed since then. Property-casualty insurance is specifically designed to help protect your possessions from theft or destruction and your assets from being depleted through disaster or litigation claims brought against you.
The property side of a policy insures physical items, such as homes, commercial buildings, motor vehicles, and personal possessions or business inventory. Types of property insurance include homeowners insurance, fire insurance, flood or earthquake insurance, and automobile insurance.
These insurance contracts may have an "open perils" or a "named perils" clause. The open perils clause covers losses for reasons that are not specifically excluded in the policy. Typical exclusions are earthquakes, floods, and acts of terrorism or war. A named perils clause requires the actual cause of loss to be listed in the policy, such as fire, lightning, explosion, and theft.
Casualty insurance, or liability insurance, covers you for losses that you may cause to another individual or business. This is called "third-party" coverage. For example, if you have liability insurance on your car and another party is injured in a collision caused by you, your liability insurance will take care of the other person's medical and repair costs. In addition, if someone sues you because of harm you may have caused to him or to his possessions, your casualty insurance may cover the cost.
Both individuals and businesses can purchase property-casualty insurance. Personal policies include homeowners insurance, renters insurance, and automobile insurance, whereas commercial polices are written specifically for businesses and other organizations and may include commercial general liability, workers' compensation, and commercial property insurance.
If you are worried about protecting your possessions from damage and your assets from being diminished due to liability costs, then you may want to consider the types of property-casualty insurance that are appropriate for you. When selecting an insurance policy, make sure to examine all your options, as well as the positives and negatives of each type.
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What are the parts of Auto Insurance?
Four main types of auto insurance are available: liability, uninsured or underinsured motorist, collision and comprehensive, and personal injury. Most states require drivers to carry certain types of insurance.
Liability
Liability insurance is usually considered a necessity, and many states have a minimum legal requirement for liability coverage. This type of insurance helps protect, up to the policy limits, against injury claims and property-damage suits brought by other drivers, pedestrians, or property owners if you are at fault in an accident. Your liability policy pays for injuries suffered by others and the costs of damage to other people's property, as well as legal costs, if necessary, up to a dollar limit.
You can choose a policy with an overall limit for all liabilities, or you can select one with separate limits for (1) individuals injured in an accident, (2) all injuries in the same accident, and (3) property damage.
Uninsured or Underinsured Motorist Coverage
A policy with an uninsured motorist provision will pay damages if an uninsured motorist or a hit-and-run driver injures you and/or your passenger(s). You cannot buy more coverage against an uninsured driver than you carry yourself in liability. For example, if you carry $25,000 coverage per person and $50,000 per accident, you can buy only up to those amounts of coverage against an uninsured driver.
For a nominal additional amount, you can also carry protection against inadequate insurance coverage by another driver who injures you or damages your property in an automobile accident. This provision means that your policy will pay for injuries or damage that his or her policy does not.
Collision and Comprehensive Coverage
Collision insurance reimburses you for repair costs resulting from a collision that has been deemed to be your fault. Collision insurance is usually the most expensive part of your policy. Comprehensive coverage is for damage due to fire, storm, vandalism, or theft.
If a lender holds a lien on your car, the lender will probably require you to pay for both collision and comprehensive insurance. To lower the cost of this kind of insurance, you may choose a $500 to $1,000 deductible, instead of the usual $100 to $250. Although this increases your out-of-pocket expenses in the event of an accident, it may cut the cost of your premiums substantially.
Personal Injury Protection
Residents of states with "no-fault" insurance must buy personal injury protection. Personal injury insurance will pay your medical expenses in the event of an automobile accident, regardless of who was at fault. By purchasing this protection, you agree not to sue for any suffering or injury you may sustain. Whether or not your state requires certain types of auto insurance, it may be a good idea to purchase multiple types to ensure that you are covered for many possible situations. In the event of a traffic collision, you don't want to be left with bills that you cannot pay.
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What is an Umbrella?
In this litigious society, no one is immune from potential lawsuits. Anyone with significant assets might need protection from the devastating effects of a liability lawsuit.
Elected officials and members of boards may be especially vulnerable. It's not uncommon for plaintiffs to name everyone involved in an incident who has any perceived authority, responsibility, or ability to pay.
Personal liability lawsuits sometimes award the future earnings of the defendant. This makes many self-employed people, and some corporate officers, vulnerable to personal liability suits.
Fortunately, there is a way to help protect yourself. You can supplement both your auto and homeowners policies with excess liability insurance, or an "umbrella policy."
For as little as a few hundred dollars per year, umbrella liability policies may provide between $1 million and $5 million of protection for you and your household members from negligence claims, libel, slander, or defamation.
And by buying your auto, homeowners, and excess liability policies from the same company, you may be able to reduce the total cost by as much as 15%.
Most individual liability policies, however, don't cover occupational risks such as professional malpractice. In many cases, professional organizations such as the American Medical Association and the American Bar Association offer group policies for their members. The state equivalents of these organizations are usually quite aggressive in finding group providers to protect their members. In some professions, a local member may take the additional responsibility of helping to administer the group insurance for the state's participants — overseeing and monitoring the coverage and costs and helping watch for abuses.
Because liability is an area connected with ongoing litigation, it changes often. Professionals should closely follow developments in their own fields in order to avoid expensive mistakes. In many businesses and professions, there are watchdog groups appointed to provide current information.
Large groups often evaluate competitive policies annually to assess the performance of their group's insurance company. Such an organization may change insurance companies on a regular basis, as this is a very competitive area.
When evaluating your personal liability, consider the following:
- Everyone in your household should be covered, including those who don't live at home.
- Your policy should cover physical injuries, libel, slander, invasion of privacy, malicious prosecution, wrongful eviction, defamation of character, and discrimination.
- Shop around for the lowest number of exclusions. For example, many policies will not help you if you are sued as a result of your participation on a board or less formal committee.
- Be aware of wording that limits coverage to exclusive causes of injury.
What is a BOP? Do I need one?
Your business may be running smoothly. You could be making money hand over fist. But don't be lulled into thinking that a catastrophe could never hit your business. Disasters can strike in many ways; even a minor one could wipe out a lifetime of hard work.
Fortunately, the appropriate business owner's insurance policy, sometimes called a BOP, can help protect your company in the event of property damage, business interruption, or legal troubles.
Property Coverage
A BOP can insure a company's buildings and equipment in much the same way as homeowners insurance covers a residence and its contents. A standard BOP policy helps protect against a specific list of perils, such as fire, wind, hail, water damage, and vandalism.
It's advisable to insure for "replacement value" rather than "actual value." That way, you might not have to come up with extra money to get back to business. The premiums will be higher, but the extra expense may well pay for itself if it means getting back to work in a matter of days rather than weeks or months. You may be able to offset the extra expense by working with the insurer to identify and reduce certain types of risks to help lower premiums.
Liability Coverage
This coverage is essential if someone were to become injured on your premises, by your employees, or by one of your products. It can be used to pay medical costs for the injured parties or to defend against liability claims, even if a claim is unfounded. Liability coverage also helps protect against claims of slander or libel.
Business Interruption
If your business operations cease because of a disaster, this coverage can help replace the lost income and expenses related to operating from a temporary location. A natural disaster is only one of the many threats facing small businesses. In such a situation, a business owner policy can help put you back in business.
How can I determine the financial strength of my insurance company?
How do you compare insurance companies? What features do you examine? What criteria do you use? How do you know what to look for? Making sure that your insurance company is financially sound is an important part of helping to ensure family security.
Fortunately, there are a number of independent companies that make these evaluations. These rating companies carefully examine each insurance company in the areas of profitability, debt, liquidity, and other factors. From the results of these examinations, they then issue overall ratings.
Looking up a company's rating will provide you with a snapshot of that company's financial health. Tracking the company's rating on a regular basis may give you some advanced warning of trouble.
The four most prominent rating companies are A.M. Best, Standard & Poor's, Moody's Investors Service, and Fitch Ratings. Each of these services uses slightly different criteria when rating companies. As a result, each may have a slightly different view of a given company. A.M. Best ratings are based on financial conditions and performance; Moody's, Fitch Ratings, and Standard & Poor's ratings are based on claims-paying ability. You should be able to find copies of at least one of these ratings in the reference section of your local library. If you are unable to find them, or if the ratings in your library are outdated, you can contact the services directly. All four services will provide ratings over the phone.
- A.M. Best Company: 908-439-2200, www.ambest.com
- Standard & Poor's: 877-772-5436, www.standardandpoors.com
- Moody's Investors Service: 212-553-0377, www.moodys.com
- Fitch Ratings: 800-893-4824, www.fitchratings.com
Glossary of Insurance Terms
Actual Cash Value – Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10 year old television would not be replaced at full current value because of a decade of depreciation.
Adjuster – A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when a claim is submitted.
Agent – An individual who sells and services insurance policies in either of two classifications:
- Independent agent represents at least two insurance companies and services clients by searching the market for the most advantageous price for the most coverage
- Direct or career agent represents only one company and sells only its policies.
Aggregate Limit – Usually refers to liability insurance and indicates the amount of coverage that the insured has under the contract for a specific period of time, usually the contract period, no matter how many separate incidents might occur.
Assets – Assets refer to "all the available properties of every kind or possession of an individual or company that might be used to pay its debts".
Automobile Liability Insurance – Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.
Broker – Insurance salesperson that searches the marketplace in the interest of clients, not insurance companies.
Broker-Agent – Independent insurance salesperson who represents particular insurers bur also might function as a broker by searching the entire insurance market to place an applicant's coverage to maximize protection and minimize cost.
Captive Agent – Representative of a single insurer or fleet of insurers who is obliged to submit business only to that company, or at the very minimum, give that company first refusal rights on a sale.
Casualty – Liability or loss resulting from an accident.
Casualty Insurance – Insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to property of others. It also includes such diverse forms as glass, insurance against crime, boiler and machinery insurance.
Chartered Property and Casualty Underwriter (CPCU) – Professional designation earned after the successful completion of 10 national examinations given by the American Institute for Property and Liability Underwriters. Covers such areas of expertise as insurance, risk management, economics, finance, management, accounting, and law.
Claim – A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.
Coinsurance – In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss.
Collision Insurance – Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.
Commercial Lines – Refers to insurance for businesses, professionals, and commercial establishments.
Commission – Fee paid to an agent or insurance salesperson as a percentage of the policy premium. The percentage varies widely depending on coverage, the insurer and marketing methods.
Common Carrier – A business or agency that is available to the public for transportation of persons, goods, or messages. Common carriers include trucking companies, bus lines and airlines.
Comprehensive Insurance – Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.
Coverage – The scope of protection provided under an insurance policy. Coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of indemnification.
Coverage Area – The geographic region covered by an insurer. Deductible – Amount of loss that the insured pays before the insurance kicks in.
Earned Premium – The amount of the premium that has been paid for in advance that has been "earned" by virtue of the fact that time has passed without a claim. A three-year policy that has been paid in advance and is one year old would have only partly earned the premium.
Exclusions – Items or conditions that are not covered by the general insurance contract.
Exposure – Measure of vulnerability to loss, usually expressed in dollars or units
Floater – A separate policy available to cover the value of goods beyond the coverage of a standard renters insurance policy including movable property such as jewelry or sports equipment.
General Liability Insurance – Insurance designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability arising from accidents resulting from the insured's premises or operations, products sold by the insured, operations completed by the insured, and contractual liability.
Grace Period – The length of time after a premium is due and unpaid during which the policy, including all riders, remains in force. If a premium is paid during the grace period, the premium is considered to have been paid on time.
Hazard – A circumstance that increases the likelihood or probable severity of a loss. For example, storing explosives in a home basement is a hazard that increases the probability of an explosion.
Hurricane Deductible – The amount you must pay out of pocket before hurricane insurance will kick in. Many insures in hurricane prone states are selling homeowners insurance policies with percentage deductibles for storm damage, instead of the traditional dollar deductibles used for claims such as fire and theft. Percentage deductibles vary from one percent of a home's insured value to 15 percent, depending on many factors that differ by state and insurer. Also known as wind/hail deductible. Indemnity – restoration to the victim of a loss by payment, repair, or replacement.
Inflation Protection (Inflation Guard) – An optional property coverage endorsement offered by some insurers that increases the policy limits of insurance during the policy term to keep pace with inflation and rising building material costs. Insurable Interest – Interest in property such that loss or destruction of the property could cause a financial loss.
Insurance Adjuster – A representative of the insurer who seeks to determine the extent of the insurer's liability for a loss when a claim is submitted. Independent insurance adjusters are hired by insurance companies on an "as needed" basis and might work for several insurance companies at the same time. Liability – Broadly, any legally enforceable obligation.
Liability Insurance – Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.
Loss Adjustment Expenses – Expenses incurred to investigate and settle losses.
Loss Control – All methods taken to reduce the frequency and/or severity of losses including exposure avoidance, loss prevention, loss reduction, segregation of exposure units and noninsurance transfer of risk. A combination of risk control techniques with risk financing techniques forms the nucleus of a risk management program. The use of appropriate insurance, avoidance of risk, loss control, and risk retention minimize the risks of a business, individual, or organization.
Loss Ratio – The ratio of incurred losses and loss-adjustment expenses to net premiums earned. This ratio measures the company's underlying profitability, or loss experience, on its total book of business.
Losses Incurred (Pure Losses) – Net paid losses during the current year plus the change in loss reserves since the prior year end. Mutual Insurance Company – Companies with no capital stock, and owned by policyholders. The earnings of the company – over and above the payments of losses, operating expenses and reserves – are the property of the policyholders. There are two types of mutual insurance companies. A nonassessable mutual charges a fixed premium and the policyholders cannot be assessed further. Legal reserves and surplus are maintained to provide payment of all claims. Assessable mutuals are companies that charge an initial fixed premium and, if that isn't sufficient, might assess policyholders to meet losses in excess of the premiums that have been charged.
Named Perils – Perils specifically covered on an insurance policy at an insured location.
Non-Standard Auto (High Risk Auto or Substandard Auto) – Insurance for motorists who have poor driving records or have been cancelled or refused insurance. The premium is much higher than standard auto due to the additional risks.
Occurrence – An event that results in an insured loss. In some lines of Business, such as liability, an occurrence is distinguished from accident in that the loss doesn't have to be sudden and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.
Peril – The cause of a possible loss
Personal Injury Protection (PIP) – Pays basic expenses for an insured and his or her family in states with no-fault auto insurance. No-fault laws generally require drivers to carry both liability insurance and personal injury protection coverage to pay for basic needs of the insured. These include medical expenses, in the event of an accident. Personal Lines – Insurance for individuals and families, such as private passenger auto and homeowners insurance.
Policy – The written contract effecting insurance, or the certificate thereof, by whatever name called, and including all clause, riders, endorsements, and papers attatched thereto and made a part thereof.
Preferred Auto – Auto coverage for drivers who have never had an accident and operates vehicles according to law. Drivers are not a risk for any insurance company that writes auto insurance, and no insurance company would be afraid to take them on as a risk.
Premium – The price of insurance protection for a specified risk for a specified period of time.
Premium Earned – The amount of the premium that has been paid for in advance that has been "earned" by virtue of the fact that time has passed without claim. A three-year policy that has been paid in advance and is one year old would have only partly earned the premium.
Premium Unearned – The part of the premium applicable to the unexpired part of the policy period.
Qualifying Event – An occurrence that triggers an insured's protection.
Reinsurance – In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn't fall on one company. Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a line of business or a geographical area within a specified period of time.
Renewal – The automatic re-establishment of in-force status effected by the payment of another premium.
Replacement Cost – The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.
Reserve – An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders. A reserve is usually treated as a liability.
Risk Management – Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through practices such as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.
Solvency – Having sufficient assets – capital, surplus, reserves – and being able to satisfy financial requirements – investments, annual reports, examinations – To be eligible to transect insurance business and meet liabilities.
Standard Auto – Auto insurance for average drivers with relatively few accidents during their driving experience.
Stock Insurance Company – An incorporated insurer with capital contributed by stockholders, to whom earnings are distributed as dividends on their shares.
Stop Loss – Any provision in a policy designed to cut off an insurer's losses at a given point.
Subrogation – The right of an insurer who has taken over another's loss also to take over the other person's right to pursue remedies against a third party.
Tort – A private wrong, independent of contract and committed against an individual, which gives rise to a legal liability and is adjudicated in a civil court. A tort can be either intentional or unintentional, and liability insurance is mainly purchased to cover unintentional torts.
Total Loss – A loss of sufficient size that it can be said no value is left. The complete destruction of a property. The term is also used to mean a loss requiring the maximum amount a policy will pay.
Umbrella Policy – Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of the underlying policies.
Underwriter – The individual trained in evaluating risks and determining rates and coverages for them.
Underwriting – The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.
Unearned Premiums – That part of the premium applicable to the unexpired part of the policy period.
Uninsured Motorist Coverage – Endorsement to a personal automobile policy that covers an insured collision with a driver who does not have, or does not have sufficient, liability insurance.
how to find us
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- Paper Mill Insurance
3313 Paper Mill Road, Phoenix, MD 21131-0100. - Telephone: 410 628 6250
- FAX: 410 628 8039
- E-mail: info@papermillinsurance.com