Month: February 2023

Does Motorcycle Insurance Cover Other Riders?

Posted on by agentinsure

Before you let someone borrow your motorcycle in Marietta, GA, know how your policy works and what is covered. Understanding the details of your motorcycle insurance plan from LG Insurance Group can help ensure that you are adequately protected if an accident occurs while someone else is riding your bike.

What Is Covered Under Motorcycle Insurance? 

The primary purpose of motorcycle insurance is to provide financial protection in the event of an accident or other mishap. Generally speaking, your policy will cover the costs associated with these situations if you are injured while riding your bike or if your motorcycle is damaged due to an accident, theft, or vandalism. However, the coverage may change depending on various factors when it comes to other riders—particularly those who don’t have their own policy. 

In most cases, motorcycle policies will cover other riders who have permission from the owner (you) to operate the bike. This might include family members or close friends who only occasionally ride the bike for recreational purposes. However, some insurers may require additional coverage for another rider to be protected; it all depends on the terms and conditions of your particular policy. Additionally, it’s important to note that anyone operating a motorbike without permission from the owner could still be held liable for damages resulting from an accident—even if they don’t have an insurance policy. 

When deciding whether or not to add another rider to your motorcycle insurance policy in Marietta, GA, it pays to do your homework first. Contact LG Insurance Group today for more information about adding another rider and related questions regarding motorcycle insurance policies! They will happily answer any questions about insuring another driver on your bike!

How does a percentage deductible on my homeowner’s insurance work?

Posted on by Linda Grissett

A percentage wind hail deductible is a type of insurance policy deductible that is commonly used in areas that are prone to severe weather events, such as hurricanes, tornadoes, and hailstorms. The deductible is the amount of money that the policyholder is required to pay before their insurance coverage kicks in. With a percentage wind hail deductible, the deductible amount is calculated as a percentage of the insured property’s total value (dwelling limit), rather than as a fixed dollar amount.

For example, if a homeowner has a wind hail deductible of 2% and their home is insured for $500,000, then their deductible amount would be $10,000. If their home sustains damage from a hailstorm that costs $20,000 to repair, the homeowner would be responsible for paying the first $10,000 (the deductible), and the insurance company would cover the remaining $10,000.

The percentage wind hail deductible can vary depending on the insurance policy and the location of the property. In areas that are more prone to severe weather events, the percentage deductible may be higher than in areas with lower risk. The deductible may also vary based on the type of damage that occurs. For example, there may be a separate deductible for wind damage and hail damage.

It’s important to note that the percentage deductible applies to the insured property’s value, not the amount of the insurance claim. This means that if the insured property has increased in value since the policy was purchased, the deductible will also increase. It’s also important to understand that the deductible is a separate expense from the insurance premium, so it’s important to factor in the deductible amount when choosing an insurance policy and budgeting for the cost of repairs in the event of damage from severe weather events.

What is ACV or Roof Payment Schedule on my Homeowner’s Insurance?

Posted on by Linda Grissett

First a little history to help consumers understand the issues surrounding roof claims and the struggles facing insurers and consumers. At least 15 years ago when severe storms were constantly pounding the Southeast and Midwest, roof claims skyrocketed. There was a time when insurers would typically pay the full loss repairs upfront before any repairs began. Though not necessarily the majority of roof claims, fraud by homeowners and roofing contractors increased dramatically around this time. Some roofs were either left unrepaired after payment but more so, unscrupulous roofers would entice consumers by offering to “pay their deductibles” by inflating their repair estimates or even worse actually creating or worsening damage to roofs to simulate hail damage and causing full roof replacements. These practices inflated claim payouts significantly and insurers responded to prevent even more dramatic increases in homeowner premiums. In addition to separate wind and hail deductibles, insurers changed handling of claim payouts to hold out a percentage of the repair costs until work was completed, increased scrutiny on roof damage, analyzed roof contractor patterns and started adding discounts as well as acceptability guidelines around roof age. State Insurance Departments also aided efforts by tracking some of these issues within their fraud units.

These events led to variations of coverage options within today’s insurance markets. These options vary by insurer, geographic region, roof type and roof age typically. An insurer may allow a consumer with a newer roof to choose between these options, however, if a home has an older roof, the “option” or coverage endorsement may be mandatory for coverage to be accepted by the carrier.

One of these coverage options is referred to as a roof Payment Schedule which outlines the payment calculation for roof replacement costs in the event of a covered loss. In a roof payment schedule, the insurance company specifies the amount of money that it will pay for roof replacement costs, typically as a percentage of the total cost of the replacement. The payment schedule is based on the type of roof, its age, and other factors that affect the cost of replacement.

For example, an insurance company may have a roof payment schedule that states that it will pay 80% of the cost of replacing a 15-year-old asphalt shingle roof. This means that if the cost of replacing the roof is $10,000, the insurance company will pay $8,000 and the policyholder. The policy deductible will also be applied to the final payout as well, which would lower this amount further by either a flat amount or a percentage of your dwelling limit. It’s important to note that the roof payment schedule may be different for different types of roofs and may be subject to certain limitations and exclusions.

A similar option may simply state that a loss involving roof replacement would be determined on an Actual Cash Value (ACV) basis. This would simply equate to a roof that has a 20-year estimated life span would receive a percentage of the replacement cost value depending upon its age at the time of loss. For example, if this roof had significant covered damage when it was 10-years old, then the insurer’s payout would be 50% of the full replacement cost less the policy deductible. Here a $10,000 roof replacement would result in an evaluation of $5,000 less your applied deductible.

The most robust coverage evaluation remains Replacement Cost, which does not account for depreciation. Only the policy’s applicable deductible would apply to the full cost of roof replacement for a covered loss in determining the amount of insurance paid to the consumer. With the same $10,000 roof repairs from above, you would receive the full $10,000 less your applied deductible.

The difference between these different evaluation methods (in combination with your selected wind/hail deductible) could mean a difference in tens of thousands of dollars at the time of loss. How much are you willing to lose in a claim payout for a little premium savings? Weigh your options carefully and understand the implications of policy choices.

Policyholders should always carefully review their insurance policy and all endorsements to understand their coverage, each and every year. Some insurers may change coverage for a roof at renewal. This means that some insurers will initially offer Replacement Cost for insureds with roofs that are 5, 10 or 15 years old, but at a later renewal date when their roof is of a certain age, their coverage could shift to ACV or a Payment Schedule. Be sure to review your policy each and every year. If you would like a coverage or renewal review, be sure to contact us at LG Insurance Group. We are happy to assist you!