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Navigating Insurance: Answers to Your Top 30 Questions

By April 10, 2023May 8th, 2023Insurance
Answers to common insurance questions you might have regarding your insurance policy.

Insurance can be a complicated topic, so it’s common for people to have questions about it. In this article, we’ll answer 30 of the most frequently searched insurance questions to help you better understand your coverage.

If you have any more questions after reading this, reach out to your MSIG insurance agent or contact us.

Insurance Card FAQs

What is the group number on your insurance card?

The group number on your insurance card is a number that identifies your employer-sponsored insurance plan. Insurance companies need this to identify what is covered under your plan and what isn’t. It is often listed on the front of your insurance card by your member id.

If you are covered by an individual insurance plan, and not covered by an employer-sponsored insurance plan, you may not have a group number.

What is the member id on an insurance card?

The member id, also known as the subscriber id or policy number, is a unique number that is used to identify a policyholder. Insurance companies use them to properly process the policyholder’s claim. Your member id is often found on the front of your insurance card along with your name, the name of your insurance provider, and your group number.

It is important to note that your member id is different from your group number. Your member id is specific to you, while your group number applies to your employer-sponsored insurance plan.

Insurance Coverage FAQs

Does life insurance pay for suicidal death?

Most life insurance policies will pay out in the event of a suicide, but there may be certain exclusions or waiting periods in the policy. Typically, suicide clauses last for two years.

Does insurance cover stolen cars?

Yes, if you have comprehensive coverage as part of your car insurance policy, theft of your vehicle and belongings inside it will typically be covered. However, it’s important to review your policy and speak with an MSIG auto specialist to understand the specific details of your coverage.

If you are not sure if you have comprehensive insurance, or are considering adding it to your existing auto insurance policy, request a car insurance quote and we’ll be happy to answer your questions.

Does insurance cover airbag replacement?

The type of auto insurance you have and who is at fault during an accident will help you determine if insurance will cover the cost of replacing airbags if they go off in an accident. For example, if you are not at fault for an accident, the at-fault party’s insurance will cover the cost of replacement, otherwise, if you are at fault, but have collision insurance, your insurance might cover the cost of replacement.

It is important to note that airbags cost a lot to replace, and usually accidents that involve them involve a lot of damage, so it isn’t uncommon for insurance companies to deem your car “totaled” instead of paying to repair it and replace the airbags.

Does insurance cover an ambulance?

Typically, insurance will cover the cost of an ambulance ride, but there are many factors that go into it which can make it confusing such as:

  • How the accident took place
  • What insurance coverage you have
  • If the ambulance was medically essential
  • If you have a deductible or coinsurance
  • And more!

To help you cipher through this, we recommend you contact an MSIG insurance specialist to help you determine if you are covered.

Will my insurance cover car wash damage?

Whether or not your insurance will cover car wash damage depends on the specifics of your policy and the situation. For example, if the car wash malfunctions and causes damage to your car, the car wash owner could be liable for the damage. However, if you are responsible for the damage to your car and/or to the car wash by not adhering to the car wash instructions, your car insurance policy may be able to cover the costs to repair your car and/or the car wash depending on what coverage you have.

Does gap insurance cover theft?

Gap insurance, also known as guaranteed asset protection insurance, covers theft if a policyholder’s car was stolen, and cannot be recovered, or if the damage due to theft was enough to total the car.

Does insurance cover hitting a deer?

If you have comprehensive insurance, your car insurance will typically cover hitting a deer as it protects your vehicle against non-accident-related physical damage.

Does insurance cover car flooding?

If you have comprehensive insurance, it can cover flooding damage to your car as well as other non-accident-related damage such as hail and heavy rains.

With all insurance policy-related coverage questions, we recommend speaking directly with an MSIG insurance specialist who can walk you through what is and isn’t covered by your policy, as well as find you coverage that fits your needs. Submit a free quote today.

Insurance Rates FAQs

Do parking tickets affect insurance?

Generally, parking tickets do not affect your car insurance rates since they are not related to your driving and do not go on your permanent record. As long as they are paid on time, your insurance should not be affected by them. However, if they go unpaid, you could see other issues arise which could lead to an increase in your insurance rates.

Will a hit-and-run claim raise my insurance?

Rules can vary by state, but in general, if you are not at fault for a hit-and-run accident and you make a claim, it is unlikely that your insurance rates will increase. It is best to speak with an MSIG property & casualty insurance agent and work with them to understand the impact on your coverage.

Does a red light ticket affect my insurance?

A red light ticket can affect your insurance rates, as it is considered a moving violation and goes on your permanent driving record. Insurance companies use your driving record to determine your car insurance rates, so any violation on it could raise them. If you want to know how much your rates will be affected by a red light ticket, it is best to speak directly with your insurance company since insurance companies calculate rates using different algorithms.

Do camera tickets affect insurance?

In most states (including all in the Midwest), traffic camera tickets for speeding and running red lights do not affect your insurance rates. In fact, some states have gone as far as banning insurance companies from raising car insurance premiums for speeding and red light camera violations.

The reason insurance companies do not raise insurance rates is because many states handle camera tickets like parking tickets. They consider them to be non-moving violations and they do not go on your permanent driving record.

Does hitting a deer raise your insurance?

Rules can vary by state, but in general, your car insurance rates will not increase for hitting a deer since you are not at fault for it. It is best to speak with your insurance company or an MSIG auto specialist to see how you can be affected by a deer collision.

Insurance Tax FAQs

Are insurance premiums tax deductible?

Typically, insurance premiums are not tax deductible. For example, the premiums you pay for your homeowners insurance policy cannot be deducted from your yearly income.

However, this rule has certain exceptions for health insurance and dental insurance. If you have individual health and/or dental insurance that is not sponsored by an employer, you can deduct these premiums from your taxes at the end of the year since they are issued on an after-tax basis.

If you have more questions regarding insurance tax deductions, we recommend you speak with a tax professional.

Is insurance money taxable?

In most cases, insurance payouts are not taxable. For example, if you receive payment as a beneficiary of a life insurance policy, this money will not be taxed. The only money that could be taxed is the interest you received on it.

However, it is important to note that some insurance policy payouts can be taxable under specific circumstances. For example, if you are receiving payouts from an employer-sponsored disability policy, the amount you receive from your disability policy that is due to your employer’s payments is taxable, but if you pay the entire cost of your disability policy, this income wouldn’t be taxable.

Is medical insurance pre-tax?

Medical insurance, commonly referred to as health insurance, is typically offered on a pre-tax basis by an employer. If it is pre-tax, it means your insurance premiums are deducted from your paycheck by your employer before taxes are calculated, helping you reduce your taxable income for the year. Today, most employer-sponsored medical insurance plans are offered on a pre-tax basis because it greatly benefits employees and employers.

If you get medical insurance on your own for you and your family, it is offered on an after-tax basis. Individuals might be able to use health insurance premiums as a deduction on their income taxes.

Identifying what is and isn’t taxable in insurance can be confusing, so we always recommend speaking with a tax professional before submitting your taxes.

Insurance Definition FAQs

What does “liquidity” refer to in a life insurance policy?

“Liquidity” in the context of a life insurance policy refers to the ability to access the cash value of the policy. Cash value is the portion of the policy that accumulates over time as premiums are paid, and it can be borrowed against or withdrawn by the policyholder while they are alive.

The liquidity of a life insurance policy can vary depending on the type of policy and the terms of the contract. Whole life insurance policies, for example, generally have higher liquidity than term life insurance policies because they accumulate cash value over time that can be accessed by the policyholder. However, it’s important to note that accessing the cash value of a life insurance policy may have tax implications and may reduce the death benefit payable to beneficiaries.

What is an insurance carrier?

An insurance carrier, also known as an insurance company or insurer, sells insurance products to individuals or businesses often through insurance agents. Insurance companies frequently specialize in specific areas of insurance such as home and auto insurance, commercial trucking insurance, life insurance, and more.

Examples of insurance companies include The Hartford, Allstate, and State Farm.

What is a TPA in insurance?

In insurance, TPA stands for Third-Party Administrator. TPA’s are organizations that handle administrative services for insurance companies as well as for businesses that offer self-funded group health insurance plans. They are used to outsource administrative functions such as claims processing, policy administration, and risk management.

TPAs are a useful tool businesses can use to offer insurance without having to deal with all the work that comes with it.

What is ACV in insurance?

In insurance, ACV stands for Actual Cash Value. It refers to the cost to replace or repair your property minus depreciation. It is a method insurance companies use to determine the amount they will pay a policyholder for a covered loss. It is most commonly heard in auto insurance and homeowners insurance policies.

ACV Formula: Replacement (or Repair) Cost – Deductible – Depreciation Adjustment

  • Example: it will cost $5,000 to repair the five-year-old siding on your house, but your deductible is $1,000 and the insurance company determines your siding has depreciated $1,000 over the past five years.
    • Calculation: $5,000 – $1,000 – 1,000 = $3,000 ACV

What is adhesion in insurance?

In insurance, adhesion refers to insurance contracts (policies) in which one party has significant say over the other. Generally, the party with more say is the insurance company because they are the ones offering the contract and willing to cover the risks of the policyholder.

If the policyholder wants coverage from the insurance company, they essentially must adhere/agree to the contract as it is.

For a comprehensive glossary of the most commonly searched insurance definitions, explore our article on insurance definitions.

General FAQs

What is unemployment insurance?

Unemployment insurance, also referred to as unemployment benefits, is a government insurance program that provides financial assistance to workers who have lost their job through no fault of their own. Unemployment insurance benefits are paid out to eligible workers on a weekly basis and are designed to help them financially while they search for new employment opportunities.

General guidelines are set at the federal level, but states are allowed to enforce their own requirements. Check your state’s unemployment insurance requirements to learn more. For example, in Wisconsin, it is handled by the Department of Workforce Development.

What is the purpose of key person insurance?

Key person insurance is a form of life insurance a business takes out on a key owner/employee of the business. It is commonly purchased by owners in a partnership as well as sole proprietors.

Key person insurance was designed to help cushion the financial blow a business takes from a highly valuable member passing away. The money can help the business cover the costs associated with finding and training a replacement, as well as provide financial stability during a difficult time.

What happens when an insurance policy is backdated?

Backdating is a practice used in life insurance that moves a policyholder’s effective date to a day in the past when the policyholder was younger. The goal of it is to reduce the premium the policyholder pays on their life insurance policy since life insurance premiums increase with age.

It is important to note that it costs money to backdate, so it doesn’t always make sense to, especially if you are young, as your premiums increase very little year over year. It is also important to note that you usually can’t backdate up to more than 6 months, only allowing you to decrease your age by one year in your policy.

To learn more about your life insurance policy, and discuss what policy is best for you, request a free life insurance quote to speak to an MSIG specialist.

Why does having a higher deductible lower your insurance premium?

A deductible is the amount of money a policyholder must pay out-of-pocket before insurance coverage kicks in. When a policyholder chooses a higher deductible, they are assuming more of the risk themselves, which means that the insurance company is assuming less risk. As a result, insurance companies are able to offer lower premiums to policyholders with higher deductibles.

As an example, if a policyholder agrees to increase their health insurance deductible from $1,000 to $2,000, it will likely lower their premiums, but it means that they will have to cover the first $2,000 of medical bills before their health insurance kicks in.

It’s important to note that having a higher deductible does not always lower a policyholder’s premium, but in many cases it does.

Who is the policyholder in an insurance policy?

The policyholder in an insurance policy is the individual/business who has bought the insurance policy. For example, if we (MSIG) buy a business owner’s insurance policy from an insurance company, MSIG is the policyholder.

How does group insurance differ from individual insurance?

Group insurance is purchased by an employer or organization to cover a group of employees or members. Individual insurance is purchased by an individual to cover themselves or their family. Typically, group insurance policies are less expensive than individual policies.

Is gap insurance refundable?

Insurance companies will often refund your unused gap insurance premiums if you cancel your policy before the end of the coverage period. If you paid your gap insurance policy in advance, you will get refunded for the unused portion. If you pay your gap insurance premiums monthly, you may be able to receive a refund of your monthly premium if you cancel early enough in the month, but you are not eligible to receive any refunds for past months.

If you have more insurance questions, reach out to an MSIG agent or request a free quote and an MSIG agent will be happy to assist you with your insurance policies.