1) How do I start doing business with Frankfort Insurance?

A: See the Earn Your Business page which answers this question.

2) What is an insurance quote and what information is needed to generate one?

A: See the Insurance Quote Information page which answers this question.

3) What is EFT (electronic funds transfer)?

A: Electronic funds transfer, also know as EFT, is a simple way to pay your insurance premium without having to write and mail a check. On your regular due date the insurance company simply draws your payment directly from your checking or savings account. Using electronic payments eliminates billing fees, and can save you up to $90 a year. With EFT you don’t have to worry about getting the check in the mail “on time” again.  To discuss or implement this service please contact Frankfort Insurance as additional forms are required to enroll.

4) Why do insurance rates fluctuate?

A: Insurance rates fluctuate for two main reasons claims and marketing. It's no surprise to find out that a large volume of claims would cause an insurance company to increase the price of insurance. Some of these claim forces are from outside of the insurance company like state-required participation in catastrophe claims funds or increased reinsurance cost from major disasters. Reinsurance acts in the same manner as your regular insurance does; the only difference is that it is protecting the insurance company from unexpected claims rather than protecting you.

Marketing is the other prime cause of price fluctuations. If an insurance company is not seeing the sales they expect they can “discount” their insurance rate in an effort to attract more business. This can be beneficial to a company by bringing in more premium dollars but it can also attract an onslaught of unexpected claims. If not planned and executed appropriately a price discount can “buy” an insurance company into financial trouble, forcing them to increase prices dramatically just to break even. Insurance premiums are a careful balance of operating expenses, profit, investment return, and claim costs. Unexpected change in these variables can sometimes require immediate attention (price increase) to “protect” the stability of all the policies the company writes.

5) What is a Multiple Policy Discount?

A: Many consumers these days have heard about the multiple policy discount from the national ad campaigns run by large insurance companies. These ads have drummed into our heads that if you aren't getting a multiple policy discount, than you are probably not getting the best “insurance deal”. The truth about the multiple policy discount is this. You can save money by having a multiple policy discount. However the multiple policy discount is not always the best way to lower your insurance costs. The value of having an independent agent is that he will be able to offer you multiple companies and help decide if having all your business in one company is good for you. The multiple policy discount may lower the cost of two policies purchased from the same company. However that price, even with the multiple policy discount, may be higher than the cost of insuring with two separate companies. The rule of thumb, ask for the quote or quotes that will offer you the best coverage at the lowest premium. Then ask if you can save any further with a multiple policy discount.

6) How do Internet and 800 number insurance companies offer lower cost insurance?

A: After watching television you will realize that there are many companies interested in your insurance business. The Internet, financial institutions, and direct insurance companies all want your business. These ads offer to lower your insurance by up to "$500." Is it true? In some cases it is, but why it is less costly can be difficult to easily see. Sometimes the reduced price is from different coverage or more limited covereages. Another reason is these companies do not offer you the experience and advice of an agent interested in your well being. By cutting out a step in the insurance process they change the price. This lowers the bottom line but at what cost? Here is a good analogy that helps explain this situation.

In Japan people believe that the blowfish is a great delicacy, even though it is an extremely poisonous fish. If one mistake is made while preparing the fish it will kill you. However expertly prepared, the blowfish is an incredible experience to eat.

Let's say our friend Yoku was fishing one day and caught a blowfish. He was extremely excited and ran home, cleaned the fish, cooked it, and ate it. Our other friend Zoki, skipped going fishing and went to the best blowfish restaurant in Yokohama. The chef, highly skilled and trained for 15 years in blowfish preparation, prepared the blowfish and Zoki had a lovely dinner. Looking at theses two men we can easily compare their experiences to buying insurance without an agent and buying insurance with an agent. Yoku & Zoki both ate blowfish for dinner. Yoku most likely saved money preparing his own blowfish, but did he do it right? Did he do what was needed to protect himself? At the restaurant Zoki’s fish was prepared with experience and knowledge of what was needed to protect him. It's apparent which man saved money, however it isn't apparent if both Yoku & Zoki made it through the experience.

When it comes right down to it do you want a do-it-yourself fish, or policy, or is the experience & knowledge of
the chef, local agent, worth something?"

Enjoy your fish.

7) When can I switch insurance companies?

A: This is one of our most common questions. The answer is, you can switch insurance companies any time you want. You as the policyholder can choose to move you business from one company to another at anytime by signing a policy cancellation and completing a new policy application. When this change is done correctly you will have no lapse in coverage and any unused premium will be return in a short time. Now you must also understand that frequently switching insurance companies can cost you discounts and if the change is not done correctly open you up to gaps in coverage.

8) How often should I review my insurance?

A: You should review your insurance on an annual basis. What we mean by review is you should read through the declaration page of the policy to confirm that the items you want insured are listed on the policy. The declaration page is the page showing coverage amounts and premiums.

When we tell our clients this we often hear “I wouldn't know what I was looking at if I did review the page.”

Here is where the value of an insurance agent shows. Sit down with your agent and say “Teach me about my policy.” In 10-15 minutes you will have learned how to read your declarations page like a pro. Now you can pick a time each year that you come back to your policy to review it.

We recommend that our clients keep their declarations pages all together in one stack so you can easily flip back through each year. This also allows you to make notes on your pages to remind you year to year of your review. If you come to a section of the policy or declarations page that needs clarification, contact your agent and jot down a note on your declarations page.

We also recommend that you set up an appointment with your agent at least every five years, or whenever you make any major purchases, for a full insurance review. Remember, you know more about your needs than anyone else. Your input is vital in the structuring of your insurance program.

9) Does it save money to shop around?

A: Sometimes it does. However, if you are not careful you can receive a lower premium but not the correct or comparable coverage. If you want to confirm you are receiving a fair price, talk with your agent. Discuss other companies, different deductibles, credits, or other premium saving options.

10) What is an insurance deductible?

A: A deductible is the amount of a claim you have chosen to be responsible for. This means that if you had a $750 house claim and you have a $250 deductible, when you receive your claim check from the company, it will be for $500, as they have deducted $250 for your deductible. Depending on the type of policy you can choose to have, from $0 deductible all the way up to $25,000, and any almost anywhere in-between. By choosing a higher deductible, you receive a lower premium and agree to absorb a higher amount of the claim. As a note for auto insurance, be very wary of any deductible type other than broad-form collision. Without going into the coverage, broad form provides you protection with no coverage gaps at a reasonable price.

11) What does PLPD mean?

A: PLPD is the acronym for Public Liability and Property Damage.

This term was an active insurance term in Michigan until the Essential Insurance Act was passed in 1971.  Even though this term was phased out in the prior century, it still lives on in the mind of the public.  This term is commonly used to refer to the Minimum State Required Liability coverage.  This is a set of insurance limits that all automobile drivers must meet or exceed to legally drive a vehicle in Michigan. (See list below)

To many Michiganders PLPD means: cheap insurance, bare bones coverage, what I need to not get a ticket from the police. Bare bones coverage is a fair term for PLPD. No matter what your financial means are, PLPD or Minimum State limits will not adequately protect you in the event of a lawsuit. To be adequately protected, you should carry at least enough coverage to protect the loss of all your assets. By carrying minimum limits, you are paying as little as you can but are at a high risk of loosing everything you have.

12) What are my payment options?

A: When my policy renews do I have to pay the full year premium all at once? No, almost all of our companies offer some type of payment program.

And the list goes on and on. Many of our policyholders opt to use these company payment plans. If you are considering paying your premium on an installment basis, be sure you take into consideration the cost of billing fees. Most companies charge a billing fee of anywhere from $3.00 to $7.00 per payment. It may be more convenient to use the 10 pay plan offered by the company but don't forget your insurance cost just went up $50 for the convenience.

Another note about payment plans. You can pay off the balance of your premium at anytime without a penalty. For example your premium is a $1,000 and you are on the 10 pay plan which makes your monthly payment $100, plus a $5 fee. When you receive your second payment notice you decide since you have the money, you will pay the whole balance. You send a check to the company for $900 and your account is paid in full. Even better you just saved yourself $45 in fees for the 9 other payment. Better you keep the $45.00 than the company.

We also encourage our clients to use EFT, electronic funds transfer, to pay their bills. After setting the billing up the premium is automatically withdrawn from the bank account you wish. This is a great way to avoid late notices and there are no billing fees!

13) How is my premium determined?

A: Whether you carry auto, boat or a home insurance policy, your premium is determined generally the same. Of course each insurance company is different but generally speaking your premium is based on several factors some of which we've listed below.

• Policy form – Is this a bare bones policy or one with all the bells and whistles.
• Business classification – Is your house wood or brick, a sports car or a station wagon, etc.
• Territory – In what area of the state the policy is written. Detroit vs. Frankfort
• Usage – Is this your home or business, work vehicle or pleasure, sailboat or rowboat?
• Deductibles – The higher the deductible the lower the premium.
• Client experience – Are you a good or bad driver? Have you had many prior claims?
• Company experiences – Have policies of your type & area made or lost money in the past?
• Company expenses – Was last year profitable or not?
• Market rates – What are the other companies charging for the same policy?

When these factors are combined a quite complex formula is set and your insurance premium is then computed. The main purpose of this formula is to accurately gauge the correct amount to charge for a policy. In charging the correct premium the insurance company three primary goals.

1. Bring in enough money to pay the insurance claims.
2. Price a policy so it is appealing to buyers.
3. Make a profit after the claims and company expenses are paid.

When you see an increase in your policy premium don't feel that the insurance company is getting greedy and wanting to stick it to you. Remember that there are many components in insurance premiums and any changes in these components can affect insurance. Realize that this concerns the insurance company because they want to keep their customers, pay their claims, and continue to do business.

14) Why shouldn't I just let my policy cancel?

A: This question usually comes up with auto policies but is also true for home policies. In the state of Michigan you are required to maintain automobile insurance. What frequently happens is an individual's car becomes mechanically inoperable. They figure there is no sense in paying the insurance on a “dead horse”, no pun intended. So they do not make their next insurance payment and the policy is canceled for non-payment of premium. A short while later they have the vehicle repaired and contact their agent to start a new policy. They find out that since their prior insurance policy canceled for non-payment of premium the state requires that the policy be charged a higher rate. If, when the car broke down, the customer called his insurance agent & told him the situation would have ended differently. The agent would have sent the customers a form to cancel the policy and when he needed new insurance the state would not require a high premium.

The issue with homeowners policy and cancellation can also be very similar were companies can refuse to offer coverage unless the entire premium is paid at the start of the policy. The long shot is, if you don't want or need your policy be sure to contact your agent to correctly end the contract.

15) When do I need to add my young driver to my auto policy?

A: At some point most of us will live through the terrifying experience of adding a child to our auto policy. Many people don't add their young driver to their policy until they are forced to. The reason they don't add the child is the premium increase. Some feel that young drivers are unnecessarily singled out and over charged. The truth is young drivers receive higher rates mainly because they lack experience. They just haven't been out on the road enough to learn how to deal with ever changing situations safely. Almost all young drivers will have a ticket or accident of some kind in the first year of driving. For those of you who feel a young drivers experience is not a major factor think of it this way. The first time you went skiing you showed up at the hill, put on the equipment, and got on the hill. What happened most on your first day of skiing? You crashed. If you didn't you probably possess an Olympic medal of some sort. But my point remains the same. You fell on the ski hill many time from a lack of experience. Since we have established the fact that the young driver will probably be involved in some type of traffic situation, don't you want coverage? If the young driver is involved in a major accident & the young driver was not listed on the policy we may have some coverage problems. No one wants a major lawsuit to occur and you have no insurance coverage. When the young driver gets their license contact your agent, discuss your options, add the driver & pay for your protection.

16) Will I see a rate change in my auto insurance as I grow older?

A: In America the retirement years is commonly refereed to as your “golden years”. You usually retire, travel, and pass on your golden knowledge to you grandchildren. Many retirees don't know that some insurance professionals also term this time as the golden years, but it is for a much different reason. As we grow old our reflexes and senses decline and in turn we become more susceptible to auto accidents. We see the rate of accidents increase level to or above the rate of young drivers. This occurs all the while the mileage of older drivers decreases. Many of these accidents or tickets are quite minor but think back to the evening news report about the last major accident. More likely than not an older driver was involved. Now by no means are we blaming older drivers for major accidents. It is just fact and people need to be prepared for it. From middle age to old age you can expect your insurance rate to increase 30-45%. That is a major change that needs to be included when calculating the amount of money needed to retire and enjoy the good life.

17) Common Claim Questions:

a) What do I do if I have a claim?

A: See our "Claims Hotline" page.

b) Who will contact me after I report a claim?

A: After a claim is reported an adjuster – the person who helps determine the payment of your claim – will contact you. This usually occurs in less than 48 hours. If you have any questions during the claim process the adjuster is the best person to address them to. If you have issues the adjuster can't or hasn't handled immediately contact your agent.

c) What is the time frame for handling a claim?

A: Know that it takes time to gather all the details, get the information to the correct person, and settle the claim. Having a little patience will go a long way in speeding up your claim.

Auto – Claims are usually settled in 3-10 days.
Home – For small claims: 1-3 days.
Home – For large claims: 30-60 days.

d) Do I need to get an estimate for my claim?

A: Yes. For any type of repair or replacement work an estimate that details the materials used and the time and price of the labor is required. For small claims, one estimate will usually suffice, for larger claims two is standard.

e) Do I need to get to make a police report?

A: Yes. Anytime you are involved an auto accident, of any kind, report it to the police. If the incident occurred on personal property still call the police & request the take an incident report. These reports are documentation to present to the company showing the official details of the incident.

f) How and when will I get paid for a claim?

A: Most claim payments are delivered in the mail. For time frames, refer to Time Frame question above. The check will be made out in the name or names of the individuals listed as the “Named Insured” on the policy. Sometimes the check is issued to the named insured(s) and the company who is doing the repair work. This is done to insure the property is repaired and this gives you some leverage with the repair shop. You do not have to sign off on the check until you are satisfied with the work.

g) How does my deductible work?

A: When an insurance policy is purchased you have the option of choosing a deductible. The deductible is the part of a claim you agree to pay out of pocket. The higher your deductible is, the lower the premium will be. In most cases when you receive a claim check from the insurance company they will have deducted the deductible amount from the check.

h) Do I need to have my property repaired?

A: In most cases, yes. Sometimes you can choose to not fix the property but you will probably be required to carry different coverage.

i) What can I expect after a claim?

A: As your insurance agent we feel it’s our responsibility to make sure you know what to expect when it comes to a claim. Every person that experiences a claim, whether major or minor, can expect to have their lives impacted. We have condensed the claims process down into four areas to better prepare you.

Time

Claims not only cost money, they cost time. At least 90% of insurance claims are processed in a few days with little difficulty to anyone. Another 9% of claims take a few weeks and are only a temporary disturbance on everyday life. The remaining 1% of claims are extensive in their scope. Whether it is a major car accident or an extensive fire, these claims last a long time and are very involved. Be prepared for your claim, whether large or small, to take time out of your everyday schedule. Don’t accept unreasonable delays but be patient and allow the process to run its normal course.

Emotions

It is not uncommon to experience feelings of frustration, sadness, inconvenience, anger, or uncertainty. Claims bring emotions immediately to the forefront, sometimes without you even realizing it. Your emotions can be taxed even more by disruptions to your work or your home routine. Understanding that you will be more emotional at this time can help get you through tough moments and temper your responses to new issues.

Attitude

Your insurance claim is like any other endeavor; you get out what you put in. If you go into the claim with a good disposition and a positive attitude you can work through any challenge that may occur. Remember that the claim adjusters and contractors you deal with are the most important people in settling your claim. Be friendly with them, it never hurts!

Follow-through

What do we mean by follow-through? We mean that you should confirm the process is progressing as you were told it would. If someone tells you they will call you back in two days, don’t wonder on day six why you haven’t heard from them. Call them on day three and confirm what’s happening. Follow-through also applies to you. Be sure that you complete the tasks you are given, if you need more time to complete your tasks then let someone know. Too many problems occur when follow-through falls by the wayside.

Armed with the information behind these four key points you should be ready to address your claim and make it as positive an experience as possible. To speed the resolution of your claim be sure to use your adjuster as your first point of contact. They are responsible and “in charge” of your claim once it’s reported. We are always here as you agent to help you whenever necessary. If you have questions they can’t answer, need to forward documents to the company or just needs some advice we’re here. And as it has been said, “In time, this to shall pass.”