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Help with Common Personal Insurance Issues

Southcoast independent insurance agents discuss a variety of topics with their clients every day. Following are three topics that come up quite frequently, along with some information that may help you better navigate today’s complicated world:

Have You Driven a Rental Car Lately?

When you rent a car, you have to decide whether or not you should purchase additional insurance coverage when making your car reservation. How do you make sure the additional purchase is really necessary?

One way to find out is to look at your current coverage. Your personal auto insurance policy may extend coverage to the rental car if the use is for pleasure. In Mass., for example, most insurers’ policies extend the protection provided by your policy to other vehicles you use but do not own or lease.

However, your collision and comprehensive coverage deductibles apply, even in the event you do not cause the accident that damages the rental vehicle. Also, if the rental car company charges you for the “loss of use” of its vehicle while it is being repaired, your Mass. auto policy will not cover that expense.

Note, though, that your credit card company may offer rental car insurance as a membership benefit when you charge the rental to your credit card, which may cover both of these instances. You should check with the credit card company before reserving your rental car.

Of course, speaking with your independent insurance agent is likely your best bet, so you will have all your options property explained to you. Independent insurance agents represent multiple insurers and assist their clients in finding the insurer and policy construction that best meets their needs. A listing of member agents of the Southcoast Insurance Agents Association can be found on the web at

College Students and Insurance

When a student attends college, parents want to be sure that both property and liability coverage are in place to protect the student and your assets. Property covers fire, theft, etc. and liability is in case of an accident where the student could be held liable.

Coverage can be affected by the age of the student, status as a full- or part-time student, whether the housing is located on or off campus, and whether the housing is provided by the school or is an independent rental.

Property Insurance

Your existing homeowners insurance may extend protection for your student’s property while living in a dorm, sorority house, or other on-campus housing.

However, most homeowner policies will only cover dorm possessions up to 10% of what they would normally cover in the home. Also, certain items, such as jewelry, typically come with their own set dollar limits.

If your student is renting an off campus property, you will likely want to consider a separate renter’s insurance policy to be sure their belongings are fully covered.

Auto Insurance

There are a couple of ways a parent’s policy can be credited when a student is away at school to reflect that the student will not be driving their parent’s car.

Many carriers will allow a discount of about 10% when the student is enrolled at a school at least 100 miles from home.

A larger premium reduction may be available if the student is excluded as a driver from the policy. This is only recommended, however, when the student is attending school far from home and there is no chance of driving the vehicle. When a driver has been excluded, no coverage exists for that driver, so it is imperative they are added back to the policy before returning home.

When a student takes a car to school, it is important to make sure they are listed as the principal operator of the vehicle if this is not already the case. Also, the garaging of the vehicle needs to be changed to reflect where the vehicle now will be during the school year.

The Right Value to Choose for Your Home Insurance

There is perhaps no personal insurance topic that causes more misunderstanding than the seemingly simple task of choosing the right amount of coverage for your home.

It actually is quite simple when all is said and done, but, depending on the nature of the conversation, there can be multiple possible “values” (“market value,” “assessed value,” and “replacement value” the most common) in play.

Let’s start by defining these values. Market value is what a property is worth, the price a willing buyer and willing seller agree to. Assessed value, while based on market value, is a value ascribed to the property by the city or town assessor according to a formula. Replacement value is the cost to rebuild the physical structure of the home as nearly identically as possible to what currently exists.

To illustrate the difference between market value and replacement value, consider two identical homes in the same town, one located in an affluent waterfront location and another in a middle-class neighborhood. Each would have the same replacement value but they likely would have markedly different market values due to the difference in desirability of the two locations.

When considering the appropriate amount of insurance protection for your home, you should be unconcerned with the market or assessed values. Those values have no connection to what it will cost to rebuild your home after a significant loss, such as a fire. The replacement value is the only value you should use when determining your home’s limit of insurance.

The replacement value may be estimated via software programs that insurance agents and companies use that take into account the particulars of a given property, such as its age, quality of construction, and size. A more accurate appraisal of the replacement value may be obtained via the services of a qualified real estate appraiser or building contractor.

This article has been furnished by the Southcoast Insurance Agents Association as an educational service to the many communities its members serve. A listing of member agents may be found on the web at

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