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Insurance comes in a wide array of choices for a variety of consumer and business needs. Even the best-educated consumer who spends time researching insurance issues will come across a topic he or she doesn’t understand.

Let’s take a look at what consumers say when asked: “What’s one thing you don’t understand about insurance?” Here are three common questions that Trusted Choice^® insurance agents and brokers hear:

Q: Why do I need insurance?

Insurance is for the uncertainties of life. Accidents and catastrophes happen. What can’t be predicted is when they will occur, and whom they will affect. Most people understand they’ll get sick at some point in their lives, but they can’t predict the severity and extent of the illness nor the cost of the treatment.

Catastrophes strike: In 2005, there were 24 weather-related or other disasters causing a total of $61 billion of insured
losses. Hurricane Katrina alone caused $41 billion in damage from 1.75 million insurance claims.

Even the safest drivers face the risk of an accident, and even the safest homes can catch fire. In 2006, about 5 percent of insured homes had a claim, according to the Insurance Services Office. About 94 percent of these homeowners insurance claims were for property damage, including theft.

Lawsuits are another uncertainty thatbusinesses and homeowners face. They’re costly: In the 56-year period from 1950-2006, the costs of the tort lawsuit system in the U.S. increased an average of 9.2% each year, reported Tillinghast-Towers Perrin. While most lawsuits are settled before they reach the courtroom, Jury Verdict Research data show that the median plaintiff award in personal injury cases was $45,000 in 2005, compared with $32,000 in 2002. Insurance provides two benefits to those who are sued: It pays for the cost of defending the lawsuit and pays for any liability payments for which the insured is found responsible.

Q: How do you define what insurance is … or does?

Insurance is simply a vehicle for transferring risk from one party to another. You need insurance if you have financial risk (and everyone does) and you want to reduce that risk. To do so, you pay someone else (e.g., the insurance company) to assume much of the risk for you, in return for a payment known as a “premium.”

Because American consumers hold a tremendous amount of wealth in property—ranging from homes and cars to collections of baseball cards and Christmas ornaments—they have a basic need to protect themselves from losing that value.

Insurance is designed to “make people whole” after their property or assets are damaged or stolen, or if they are responsible for harm caused to another party. An insurance policy is a contract under which an insurance company agrees to pay a certain amount of money to the policyholder if certain events happen (and their property is damaged or they cause harm to someone else or someone else’s property).

Q: Is life insurance an investment or purely insurance?

A: Life insurance for centuries has been first and foremost insurance: it provides a death benefit to the family or business
partners of an insured person.

Beginning about 30 years ago, the attractive returns in stock investments led insurance companies to bring investmentelements into life insurance policies. For example, agents and companies offered consumers the choice of placing life insurance premiums into mutual
funds, stocks, and bonds within the life insurance contract—known as “variable” life insurance. The term “variable” implies that the investment returns on these premiums vary with market performance.

With these types of life insurance policies, the insurance carrier takes the policyholder’s premium dollars and places them
in the investment account(s) chosen by the policyholder. These types of life insurance policies are subject to state insurance regulation and federal and
state securities regulations.

While investment-oriented life insurance has grown popular over the past generation, traditional life insurance (both
permanent and term) continues to be purchased in large amounts. Americans purchased $3 trillion of new life insurance coverage in 2006, according to the American Council of Life Insurers.

If you’re not sure whether a life insurance policy includes investment elements, you can check the disclosure information
on a life insurance application or policy, which must discuss whether securities are part of the life insurance contract.

What are your particular questions about insurance? Give TLIG a call at 434-582-1444

In the throes of an economic recession, millions of consumers today are cutting back on discretionary spending—and are even tightening up on the necessities. Now is an excellent time to review your insurance coverages with your independent insurance agent to find ways to cut costs while still protecting your family or business.

The premiums paid for insurance are a tremendous value. For instance, for the cost of several hundred dollars annually, a homeowners insurance policy provides a family with the means to rebuild its home and reimbursement for the cost of temporary housing should the home be destroyed in a fire.

To consider how to cut expenses, it’s helpful to take a step back. Consider anew what insurance premiums are paying for the transfer of risk. Insurance is a unique tool that allows consumers and business owners (through a financial transaction and a legal contract) to transfer risk from the consumer or business owner to the insurance company. If you transfer less risk—either by reducing the risk overall, or retaining more of the risk yourself—the insurance carrier will charge less.

Your insurance professional can help you consider two important questions if you want to cut costs on insurance:

1. What risks might I be paying to insure that I can assume myself?

The risk profile of a family or business changes over time. It’s important to share with your agent if the family or business situation has changed recently.

One thing that changes is the financial risk a family faces as children are born and grow. Parents of newborns face a lot of financial risk, since they face 18-plus years of raising that child and, for many, paying for a college education. Life insurance is the common way to protect against the risk of a parent dying while a child is in school. Yet, when the child graduates, a parent might reduce the amount of life insurance they own—and thereby reduce the amount of premium they pay. Inform your insurance agent if these changes are occurring for you.

For homeowners insurance policies, the first place to look to trim expenses is the deductible, which is the amount of money the policyholder must pay before the insurance company starts to pay a claim. The higher the deductible, the lesser the premium will be for the policy. A consumer with a $500 homeowners deductible can save as much as 25 percent by raising it to $1,000, reports the Insurance Information Institute. A policy with a higher deductible is less likely to have claims, in part because consumers that bear more risk tend to be more careful and have fewer claims.

Auto insurance customers can ask their insurance agent about whether they can save money on state-required PIP (personal injury protection) coverage, if applicable in your state. If you have already have health coverage, you may be able to keep only a minimum level of PIP—but it’s important to consider state requirements and whether your health insurance company will allow this.

2. Have I taken advantage of all the discounts offered?

The market for personal lines insurance is highly competitive. This has kept costs down: Homeowners/tenants insurance costs increased by about 17 percent between 1999 and 2008, compared with a 57 percent increase in the cost of repairing household items and a 50 percent increase in legal services, according to the U.S. Bureau of Labor Statistics.

Auto insurance carriers offer special programs that help consumers keep a lid on costs. Ask your insurance agent about discounts for having a homeowners and auto policy with the same carrier; for maintaining a claim-free record for consecutive years; for low-mileage drivers; and for young drivers who keep good grades.

For older vehicles, consider dropping collision coverage. Since auto insurance claims occur about once every 11 to 12 years, it may not be cost-effective to insure a vehicle that is worth less than 10 times the collision insurance premium. (In this case, the claim reimbursement likely would not exceed the premium minus the deductible amount.)  Ask your insurance agent what the cash value of your older vehicle is, to help you decide.

One caution: The slump in housing prices has tempted some consumers to cut the amount of insurance on their homes, but that’s a trap. Homeowners insurance should be based on replacement cost, not market value, and many homeowners are already underinsured. Replacement costs continue to grow steadily, year after year, regardless of market values. Your insurance agent can help you determine the proper amount of homeowners insurance for you.

Finally, agent also can help by shopping your insurance needs to a number of insurance carriers. If you haven’t done so in three years, now is a good time to ask if your policies can be reviewed to make sure your pricing is the most competitive available.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call them at (434) 582-1444.

Most Americans view auto insurance as necessary to protect against the costs of a car accident. Likewise, it’s common knowledge that homeowners insurance helps families rebuild their lives and homes. An “umbrella” policy is not as well known, but anyone who owns a home or any assets should consider buying it.

Umbrella liability insurance covers you in many situations if you are held responsible for bodily injury, property damage, or personal injury. The product got its name because it adds a higher level of protection above auto, homeowners and boat policies, which are “primary” policies. Umbrella coverage kicks in after primary insurance is exhausted. What’s more, an umbrella policy offers primary coverage for losses not covered by other insurance.

Typically, insurance agents sell an umbrella policy in conjunction with auto and homeowners coverage. You can usually add $1 million-plus of liability insurance for a few hundred dollars per year, and a multiple-policy discount often can be had.

One tactic insurance pros suggest: raise deductibles on auto and homeowners policies, and use the premium savings to pay for umbrella coverage.

What does primary insurance pay for? Liability insurance under auto and homeowners policies pays expenses (for example, an injured person’s medical care, rehabilitation and lost wages) because the policyholder was at fault through negligent actions. Liability coverage also pays for costs of defending against a claim or lawsuit.

It’s common for a driver, vehicle owner, homeowner, or boat operator/owner to be held responsible for someone else’s injuries, property damage, lost wage and/or expenses. An at-fault driver also can be held liable for personal injury (which is distinct from bodily injury), including psychological injury such as “pain and suffering.”

What does umbrella coverage do? The umbrella is a shield to protect an individual from having to tap into savings or sell assets to pay a judgment or claim. The umbrella policy keeps the hands of the claimant from the personal, family and business assets of the negligent person.

Intoxicated drivers leaving a party at your home, dog bites, and the neighbor kid falling off the trampoline– these incidents can cause financial losses. Even lending a friend a ski house or lake house for the weekend can create a claim. A tree in your yard that blows over in a storm and crushes the neighbor’s car is another example. A home-based business that requires visitors to come to your house may create a loss that’s excluded from homeowners coverage.

But all these incidents may cause bodily injury, personal injury and loss of wages. These losses might exceed (or be excluded from) primary insurance limits and coverages.

Who should consider an umbrella policy? Most homeowners should consider an umbrella, but especially those active in community affairs. Serving in civic, charitable, and religious organizations can lead to conflicts, claims, and even lawsuits. Even if a lawsuit is thrown out of court, you still must defend yourself. Umbrella liability coverage picks up these costs, whether or not a person is actually found to be liable. Defense costs generally are covered in addition to the liability limits of the umbrella policy.

Conversely, a person might face a damaging situation such as a false arrest or imprisonment, defamation, invasion of privacy, wrongful entry, eviction or malicious prosecution. Most will want to defend themselves, but will face legal and other costs to do so. Homeowners coverage won’t cover it; umbrella coverage can.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call them at (434) 582-1444.

Mobile information devices like PDAs and MP3 players occupy the bags and pockets of tens of millions of Americans. These devices can be pricey, often costing hundreds of dollars. The cost to obtain the information programmed on these gizmos can be exponentially more. If your portable device is damaged or stolen, will these costs be covered by your insurance?

Personal Insurance

Consider the iPod. Their owners span every demographic. For some, the iPod is as important to getting through the day as morning coffee or sunshine.

This pervasive product ranges in cost—usually a few hundred bucks or less depending on bells and whistles—and that’s just for the hardware. Downloading music can cost a dollar a song, videos and “podcasts” even more. Add in time spent collecting this information and you’ve got thousands of dollars invested in this thing. The same is true for other portable devices.

The good news is that most homeowners policies cover personal property while it is anywhere in the world—a positive considering the nature of these devices. The bad news is that coverage is limited—meaning the check you receive after the loss may not be what you expect.

While many believe their iPod is “worth” thousands of dollars, a homeowners insurance policy is designed to cover “direct physical loss” to property. Therefore, a typical policy will cover the cost of the device itself but not the cost of the information stored on the device. Some homeowner policies include coverage for loss to “personal records,” which may include information stored on a portable device. However, not all will do so and those that do likely limit coverage to a relatively small amount. If you have questions, consult your insurance agent.

Business Insurance

More and more people are using PDAs, such as BlackBerrys, Treos and iPhones, to conduct business on the fly. These devices keep them wirelessly connected to their work through email, Internet and phone.

If you own the device personally and use it for business, coverage under your homeowners insurance policy is less generous. Personal property used for business may not be covered worldwide and is subject to an amount of insurance that is lower than other personal property. A further restriction is that any limited coverage available for “personal records” does not apply to business records.

If the device is owned by your employer, it’s likely covered under a business insurance policy. Such policies contain similar limitations for loss of information. Business owners should call their insurance agent for information about electronic data coverage.

Back it Up

Whether used for business, personal, or both, cost to replace the device itself is likely the extent your insurance will pay if it is damaged or stolen. The best way to protect the information contained in the device is to back-up data periodically. Then, even if you have to replace the device, you won’t have to start from scratch.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call us at (434) 582-1444.

Recent months have brought travel risks to the forefront of consumers’ minds: the economic downturn, safety risks overseas due to political unrest, and a potential new strain of influenza that has emerged from Mexico.

There are two broad types of travel-related coverage for those leaving the United States:

• Travel insurance covers the loss of the prepaid travel costs of a trip should it be canceled, interrupted, or postponed. It also can reimburse unexpected expenses incurred due to a sudden change in travel plans due to illness or other causes.

• Specialty medical coverage protects against personal insurance risks when someone is outside the United States.

Travelers can buy travel coverage in conjunction with their travel tour, hotel bookings or flight reservations. It’s also available from providers that specialize in the international insurance market. For example, Continental, a major international airline, offers trip cancellation and interruption coverage through its reservations Web site.

The coverage reimburses the traveler for “prepaid, unused, non-refundable travel expenses should your trip be cancelled or interrupted due to any covered reason.” Such reasons include: inclement weather, an unexpected illness, death of a traveler, and travel delays.

The Insurance Information Network of California notes that trip insurance providers sometimes require a physician’s verification if a trip must be canceled before it occurs. It advises buyers to check whether the travel coverage is “cancel for any reason protection,” or more limited coverage.

Trip interruption insurance is another variation. It can provide reimbursement for extra food and lodging costs if a traveler becomes ill during the course of a trip. Some plans cover medical costs. Trip delay insurance covers expenses a traveler incurs in resuming a planned trip or returning home after being quarantined in another country. Often these various coverages are bundled and sold together in a package.

Short-term medical insurance may be appropriate for the millions of U.S. residents who travel outside the U.S. every year. Those who travel outside of America may be going beyond the boundaries of their medical insurance without knowing it, according to Clements International, a provider of international insurance policies.

The unpredictable nature of the spreading of swine flu that began in April 2009 has heightened awareness of health risks while traveling around the world. Travelers may wish to consider short-term medical insurance if they’re traveling outside of the United States for an extended vacation or business trip.

To determine whether it’s necessary, it’s advisable to check if a domestic health insurance policy covers out-of-country travel. If not, short-term medical insurance provides coverage for illnesses or medical evacuation that occurs while traveling outside of the United States.

International travelers face the same insurance risks (and sometimes additional risks) while outside the country that they do while stateside. Life insurance issued in the U.S. may not be available on the same basis while a person is traveling for an extended period as when not traveling. It’s prudent to check on the validity of life insurance coverage as part of the travel-planning process.

Check with your insurance agent about what type of insurance protection might be needed if taking an overseas trip.

TLIG is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs.

Visit us online at www.tligins.com or call them at (434) 582-1444.