FAQs

ERIE requires new teen drivers to be added to a parent or guardian’s auto policy or take out their own policy once they get their license. If your teen driver only has a learner’s permit, he or she is automatically covered under your policy. You’ll want to take out a policy in your teen driver’s name if he or she holds the car title. If you buy your teen driver a car and you hold the title, you can still add the young driver to your policy. This is usually a less expensive option since your teen benefits from your driving record. If they’re using your car, they will be covered under your policy the same way you are.

Comprehensive (sometimes called other than collision) provides reimbursement for acts of nature that damage your vehicle – hitting an animal, having a rock hit the windshield, damage from branches, etc.

Collision coverage provides reimbursement for damage to your vehicle in which there is no fault or you are at-fault.

Generally, beneficiaries don’t have to pay taxes on money received from a life insurance policy because the IRS doesn’t consider life insurance proceeds as taxable income. The situations below are exceptions to the standard:

• Estate taxes:  If all the policyholder’s assets meet the IRS’ federal estate tax threshold, which is set at $11.7 million in 2021, the policy’s proceeds could be taxable.
• Installment interest:  If you choose to receive policy benefits in incremental installments instead of a one-time insurance payout, you’ll be on the hook for taxes on any interest that accrues.
• Gift tax:  If an individual takes out an insurance policy on someone other than him/herself, the policy’s benefits are considered a gift. Any monetary gifts above $15,000 are taxable.
• Cash value:  If the policyholder dies with an outstanding cash value loan, the policy’s death benefit could be used to settle it. Likewise, any amount the policyholder borrows beyond what they’ve paid into the policy is taxable.

While the scenarios above mostly pertain to beneficiaries, there are a few more situations that could leave the policyholder responsible for taxes. In addition to taking out a policy loan, when you sell or surrender your policy and the cash value exceeds the amount you’ve contributed in premiums, the excess amount is taxable.

In most cases, rental cars are covered under your personal auto insurance for short-term use, as long as you have full coverage (comprehensive and collision) on your policy.

1. Not reading your policy

Insurance policies can be confusing, but reading your policy documents is crucial. According to Angat Saini, principal lawyer and founder of Accord Law, you need to understand your entire contract, including its coverages and exclusions. He explains, “Failing to read or understand your policy’s coverage could have some serious consequences when filing a claim, and you may run into delays or other costly issues throughout the process.”

If you’re getting tripped up by the jargon in your policy, Saini recommends speaking with your agent, who can help you review your policy and ensure you get the right coverage. Filing insurance claims for something that isn’t covered can drive up your rates in the future and leave you high and dry.

2. Not taking inventory of your personal property

One of the biggest home insurance mistakes comes before you ever enter the claims process: not taking stock of your belongings.

Gary Germer, an estate and personal property appraiser at Gary Germer & Associates, advises taking pictures of the inside of your home, cabinets, and closets to help with proof of loss. 

“Armed with pictures,” he says, “you can jog your memory and be able to make much more complete lists. I recommend clients do this once a year.” For valuable items, Germer suggests working with an appraiser to give you and your insurance company an accurate estimate of their actual cash value and estimated replacement costs. 

3. Waiting too long to file an insurance claim

Charlie Wendland, head of claims at Branch Insurance, cites putting off filing an insurance claim as the biggest home insurance mistake you can make. “In the event that a tree falls on your home or of a catastrophic loss, making sure you and your loved ones are safe comes first. The next step is to file the claim,” he said.

The claims process, he explains, is quick and easy and “will ensure you’re complying with your duties to report the claim timely under the policy.”

While you may have up to a year, you shouldn’t delay filing. The sooner you file an insurance claim, the sooner you can start repairing home property damage and replacing your belongings.

4. Cleaning up without documenting the damage 

A lot of homeowners rush to clean up the mess left by a storm or a fire before documenting the property damage. However, Dan Barrett, Vice President of Plymouth Rock Assurance, suggests you take stock first.

His advice? “Take plenty of photos and make an inventory of damaged items. If temporary repairs are needed to make the home safe, try to document the damage before it is repaired.”

Pictures, receipts, estimates, and damaged property can all serve as proof of loss evidence to help get your insurance claim approved.

5. Filing insurance claims too often

Whenever you file a home insurance claim, it is added to the Comprehensive Loss Underwriting Exchange (CLUE). “Even if nothing is paid out, multiple inquiries show the insurance company that you are highly likely to make a claim and can count against you when shopping for competitive pricing or better insurance,” explains Duncan France, a State Farm agency owner.

To avoid filing insurance claims unnecessarily, he recommends speaking with your agent first and considering whether smaller claims are worth filing. “Losing a claim-free discount and being subjected to a surcharge will almost always cost you more than just paying a small claim yourself if you have the means to do so,” says France.

How to successfully file a home insurance claim

Filing a home insurance claim can be stressful, especially if you’re reeling from significant property damage to your house. There are a few steps you can take to help the claims process run smoothly. Before you file anything, read your policy and create an inventory of your personal belongings. If your home is damaged, and you need to file a claim, be sure to document the damage and initiate the claims process quickly (with the caveat that you’re sure a claim is worth it).

Tort is the ability to sue someone for damages if they cause injury to you. Full tort is the ability to sue in court for all damages including pain and suffering. Limited tort “limits” your ability to sue for pain and suffering, with few exceptions.

YourTurn from Erie Insurance is a smartphone app that monitors certain aspects of your driving habits and provides feedback, helping you become a better driver. Within the first 30 days of using YourTurn, drivers see an average reduction of 35% in phone distractions, 20% in hard braking and 20% reduction in at-risk speeding. For more information visit https://www.erieinsurance.com/yourturn