1. My automobile policy was canceled because I did not pay my premium on time. Is this legal?
Pennsylvania insurance law does not require companies to extend a grace period for premium payments. If payment is not received by your due date, the company is permitted to cancel for nonpayment of the premium.

2. Can my insurance company cancel my auto insurance policy if I am found guilty of drunk driving?
Yes. In Pennsylvania, if you are convicted of driving under the influence, whether or not you take the Accelerated Rehabilitation Disposition Program (ARD), your driver's license will be suspended. A license suspension is a valid reason for a cancellation or non-renewal.

3. Can I exclude my spouse or teenager from my insurance policy to lower my premium or avoid being canceled?
Yes. The FIRST NAMED insured may exclude any family member from the policy provided that the person being excluded can prove he or she has auto insurance with another company or the Assigned Risk Plan.

4. Is it legal for my insurance company to non-renew my auto insurance because I have too many claims?
A company may nonrenew a policy for two or more accidents of certain types within 36 months, when the amount paid in claims for both accidents exceeds $1050 after the insured pays any applicable deductible.

5. Why do companies charge different rates for different geographical areas?
One factor used in determining insurance rates is the geographical area in which an individual resides. Based on the company's losses for that defined area, a company will determine premiums based on accident rates and repair costs for that area.

6. What is the difference between limited and full tort coverage?
Full and Limited Tort are options that you can choose under your auto insurance policy as a result of the Pennsylvania Motor Vehicle Financial Responsibility Law. Limited Tort allows you to save on your premiums by waiving your right to recover certain damages such as payments for pain and suffering unless the injuries you sustain in an automobile accident are defined as serious. Full Tort allows you to retain unrestricted rights to bring suit against the negligent party in an automobile accident.

7. Why should I buy renters insurance?
If you live in an apartment or a rented house, renters insurance covers you and your possessions. A standard renter's policy protects your personal property in many cases of theft or damage, and may pay for temporary living expenses if your rental is damaged so seriously you can't live in it. It can also protect you from personal liability.

8. Is property such as a laptop computer covered when I'm away from home?
Yes, but coverage may be limited and the conditions may vary. Ask your insurance agent for details.

9. What if I have problems with my insurance company regarding a claim?
Provide all the documentation the company requested. Talk things over with your agent or company representative. Also, your state insurance department or local consumer protection office can answer questions on filing claims, and take complaints.

10. What is the difference between "actual cash value" and "replacement cost" coverage?
These are two ways to calculate how much the insurance company will pay if you report a loss. Standard renters' policies cover the actual cash value of personal property. Payments are based on the replacement cost of the property minus a deduction for physical depreciation and obsolescence. If you add replacement cost coverage (for an additional premium), the company will pay one of the two amounts below, whichever is lower: a. the cost to replace the property with a similar type and quality of property without a deduction for depreciation, or b. the full cost to repair at the time of the loss.

11. Should I care from which type of insurer I buy insurance?
The company that offers you the best combination of the product and service you want, the coverage quality you desire, and the lowest cost should be the company from which you buy.

12. Some insurance agents I talk to say they're paid employees of the insurance company, while others says they're independent business people - what's the difference? Should I care whom I purchase insurance from?
Insurers deliver their insurance products to policyowners primarily through independent or exclusive agents. Historically, almost all insurance agents were independent business people paid on commission. More recently, many insurance companies have adopted a system where the agent is a paid employee of the firm. These agents are referred to as exclusive agents. Economists studying the differences between these two distribution systems have long argued that the independent agency system is a less efficient method of getting the product to the customer as measured by the ratio of expenses incurred to premiums written and other statistics. But recent studies suggest the reason for the higher expenses with independent agents is that they offer higher quality to policyowners through more personalized service, more advice on policy limits, more help when a claim is filed with the company, etc. So one thing you could consider is how much guidance and service you want.

13. What do I give up by not using an agent to buy insurance?
You can buy many life insurance and property-casualty insurance products without help from an agent. Typically potential policyholders will be contacted by mail, or they can call a toll-free number to apply for a product. The advantage of this type of distribution system is that expenses are usually much lower because there are no agent commissions to be paid. These savings can be passed onto the consumer through lower premiums. The main disadvantage is that the policyholder does not receive as much, or sometimes any, personal service (advice regarding the quality of various insurers, policy limits, coverages, etc.) either when buying a product or filing a claim.

14. What kinds of questions should I be expected to answer when I apply for an insurance policy? Why do insurers ask all of these questions?
When you apply for an insurance policy, you will be asked all sorts of questions. For example, the agent will ask you demographic questions such as your age, gender, address, etc. You'll also be asked questions which will be used to determine what type of risk you are. For example, when a company is deciding whether or not to offer you automobile insurance, it will want to know about your driving record, whether you have any recent accidents or tickets, and what type of car you drive. This information will help them decide whether your profile is consistent with the type of risks they are trying to attract. Some insurers specialize in offering insurance to only very safe drivers and will only accept applications from people who fit the profile of a safe driver. Once the insurer has decided your profile is consistent with the types of risks it accepts, your information will be used to determine which rate to charge you. For example, the company will decide whether you should be offered insurance at the high-risk driver rate or the low-risk driver rate. Collectively, this entire process is known as the underwriting process. Once a company's underwriting department has decided to offer you insurance, it next determines the "quality" of the risk so the proper premium can be charged. That is, high-risk people should pay more than low-risk people.

15. What is long term care (LTC) insurance and why is it receiving so much attention and publicity today?
Long term care (LTC) insurance provides coverage for the cost of custodial and other types of extended care provided in a nursing home. Coverage also is frequently provided for selected medical care and personal services delivered in the insured's home. LTC policies provide important protection to the insured because, currently, neither Medicare nor the typical medical expense insurance policy covers custodial-type care. The aging of the U.S. population, coupled with continuing medical advances, will likely lead to significant growth in the demand for custodial and related care. This increased demand, together with costly nursing home stays (now estimated at $35,000-plus per year), will likely create an environment where much publicity and attention remain focused on the need for LTC insurance.

16. If I cannot afford to buy both life insurance and disability insurance, which coverage should I buy?
Both life insurance and disability insurance are important and vital to the financial security of most individuals. In some instances, however, financial resources are inadequate to purchase the needed amounts of both types of insurance. Generally speaking, throughout the typical working lifetime (e.g., ages 20-65), the probability of an individual suffering a major disability (e.g., a disability lasting 3 months or longer) is considerably greater that the likelihood of dying. The probability of a young worker suffering a major disability is as much as 6 (or more) times the probability of dying; the multiple is still 2 or more even at the higher working ages. These relative probabilities would suggest that the purchase of disability income insurance is a more important purchase than is the purchase of life insurance. Another factor supporting this view is that, in the case of disability, total expenses of the family unit will also be higher due to the costs of caring for the disabled worker.