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Frequently Asked
Insurance Questions

Insurance can be complicated and confusing, especially when it comes to understanding the technical jargon that insurance companies often use. To help our members to better understand their policies and other important information about the types of insurance we offer, we are providing this guide that answers commonly asked insurance questions.

If you have a specific concern that is not addressed here, please feel free to contact us by phone, email, or stop by our office and visit with one of our insurance agents.

What is an independent insurance agent?
There are many reasons why it is beneficial to work with independent insurance agents. Most importantly, they represent several insurance companies and are able to offer insurance products from many different providers. Furthermore, independent insurance agents are well trained and are able to provide knowledgeable information regarding various insurance products based on fluctuations in the insurance market and changes in insurance laws and regulations. Because of their expertise, they are able to accurately advise and guide you and your family in obtaining the appropriate insurance policy and coverage’s that best suit your needs.

What is an insurance premium?
An insurance premium is the rate you are charged by an insurance company to keep your policy or policies in effect. These rates are typically paid annually, bi-annually, or in monthly installments over the course of a year. If paid by installments, you can expect to pay an additional monthly installment fee in exchange for using the flexible payment plan.

What is a deductible?
An insurance deductible is the amount of money you are responsible for before the insurance company will pay any expenses incurred in the event of a loss or a claim. In most cases, the higher the deductible, the lower the premium.

What is the difference between collision and comprehensive coverage?
Collision insurance covers the cost of repairing damages to your vehicle in the event of an accident involving another vehicle or object, regardless of who is at fault. Even though collision insurance coverage is not required by law in any state and does not cover the cost of repairing the other vehicles or other property involved, it is still an essential coverage for new vehicles and vehicles of considerable value because of the cost of repairing or replacing one today. A common oversight of carrying collision insurance on your current automobile policy is the protection you will receive if you should ever fall victim to a hit and run driver. Upon making a collision claim in this case, you will still be responsible for paying your deductible then your insurance company will cover your financial loss beyond that.

Likewise, comprehensive is also an optional insurance; however, it provides coverage for damages to your vehicle caused by perils other than a collision. These unavoidable hazards could include theft, vandalism, fire, natural disasters or other “acts of God”, or more importantly, especially for Montana and Idaho drivers, damage caused by animals.

Does my driving record affect my insurance premium?
Yes it does. Of all the factors involved in determining your insurance premium, your driving record carries the most weight in the eyes of an insurer. The obvious difference between a clean driving history and one peppered with citations and violations could easily mean hundreds of dollars more per year for decent coverage.

Do I have to include every family member on my insurance policy?
All licensed household members should be listed on the policy. Upon purchasing an auto insurance policy, it is customary for insurance companies to question you about all of the adult, licensed drivers living in your household. You are expected to faithfully disclose this information under the assumption that the other drivers could have access to the vehicle at any given time. Because there is so much variation between state laws and insurance policies, the best advice here is to contact your insurance representative and discuss your specific living arrangements with him or her.

If I loan my vehicle to someone, does coverage still exist under my policy for that driver?
In most instances, yes, this factor will hold true for nearly every auto insurance policy. However, that individual must have had permission to use the vehicle in order for the coverage to exist. When your vehicle is insured by liability coverage or some other form of coverage, that insurance protects the vehicle regardless of who is driving. As always, auto policies differ by state, so be sure to check with your insurance agent for exact limitations.

I need to file a claim. Who should I call?
Notify your insurance agent as soon as possible to report the accident and any damages that have incurred. If you have sustained a loss and are unable to reach your agent or our office, you may call your insurance company to report the claim directly.

Am I covered if I buy a new vehicle and do not speak to my insurance agent immediately?
For commercial and/or business insurance policies, you do not have coverage until you add the vehicle to your policy. Contact Erlandson Insurance immediately to make this change. For personal insurance policies, due to the difference between carriers, you must contact your agent as soon as possible to determine if you have coverage.

Does my automobile insurance policy provide coverage when I rent a car?
Under normal circumstances, coverage gaps exist on personal auto policies regarding rental vehicles. The best way to determine what, if any, car rental coverage you have under your current automobile policy is to call your insurance agent, as he or she best understands to terms of your specific auto policy.

What is the difference between actual cash value and replacement cost coverage?
Actual cash value is the amount your property is worth at the time of the loss. In a sense, it is the cost to replace the item after depreciation has been factored in. Unfortunately, the actual cash value on your possessions, depending on its age and its condition, may be much less than the cost to replace it new.

Replacement cost coverage is, simply put, the cost to replace or rebuild the damaged property with other property of comparable material and quality without taking into account a deduction for depreciation.

If I rent the home or apartment that I live in, what are the benefits of acquiring renter’s insurance to protect myself and safeguard my belongings?
Renter’s insurance is a coverage specific to individuals who do not own the property they reside in, but lease or rent on a monthly basis. First and foremost, it is worthy to note that the property owner’s insurance will typically cover the home only and not the tenant’s property. Also, the homeowner’s insurance policy releases him or her from liability if a loss or injury should occur within the rented property, leaving the renter financially responsible. For these reasons, obtaining renter’s insurance is always an important coverage to have.

Renter’s insurance typically provides coverage three ways. First, the renter’s personal property and special possessions will be protected in case of a loss or theft. Secondly, renter’s insurance provides liability coverage in the event someone is injured on the premises and covers damage done to other’s personal property at the fault of the renter. Lastly, this economical insurance will pay for costly living expenses if the home being rented becomes temporarily uninhabitable.

While Erlandson Insurance uses all reasonable efforts to include accurate and current information on this site, this presentation is for informational purposes only and is not intended to provide legal advice nor do we warrant its accuracy or completeness. In the event a conflict should arise between this summary and your insurance policy in question, your insurance policy terms and limitations shall prevail. It is therefore required that upon purchasing insurance, you read your policy carefully for complete details, fully understand its limitations and contents, and consult with your licensed insurance agent if you should have any questions.