Question 1

Does standard personal auto insurance cover driving for rideshare (Uber/Lyft) or food delivery?

Accepted Answer

No. Standard personal auto insurance policies strictly exclude commercial driving activities and carrying passengers for a fee. During Period 1 app matching, drivers face an uncovered gap unless they maintain a specific rideshare endorsement (TNC gap coverage).

Question 2

What is the difference between Actual Cash Value (ACV) and Replacement Cost Value (RCV) in home insurance?

Accepted Answer

Actual Cash Value (ACV) deducts depreciation for age, wear, and physical tear before paying a claim. Replacement Cost Value (RCV) reimburses the full current market retail price to purchase a brand new equivalent item without depreciation deductions.

Question 3

How does raising your insurance deductible affect your annual premiums?

Accepted Answer

Increasing your collision or property deductible (e.g., from $500 to $1,000) shifts minor claim risk away from the insurer, typically lowering annual comprehensive and collision premiums by 15% to 30%.

Question 4

What is the 80% Coinsurance Rule in homeowners insurance policies?

Accepted Answer

The 80% coinsurance clause requires policyholders to insure their dwelling structure for at least 80% of its current total replacement cost. If underinsured below 80%, partial claim payouts are proportionally penalized using the formula: (Carried Limit ÷ Required 80% Limit) × Loss.

Question 5

What are the four stages of medical cost-sharing under an ACA-compliant health plan?

Accepted Answer

Health insurance costs flow through four phases: (1) Deductible Phase where the patient pays 100%, (2) Coinsurance/Copay Phase where insurer and patient split costs (e.g. 80/20), (3) Out-of-Pocket Maximum (OOPM) under ACA 45 CFR § 156.130 after which the insurer covers 100% of in-network care, and (4) Calendar Year Reset on January 1st.

Question 6

What is the statutory two-year incontestability clause in life insurance contracts?

Accepted Answer

Under NAIC model law, once a life insurance policy has been in force for two continuous years from the issue date, the insurance company cannot void the policy or deny death benefit claims based on misstatements made in the initial application, except for deliberate fraud.

Question 7

When is Personal Umbrella Insurance necessary for an individual or family?

Accepted Answer

A personal umbrella policy provides excess liability coverage ($1M to $5M+) above primary auto and homeowners policy limits. It is vital whenever your net worth, home equity, investments, or future garnishable earnings exceed the liability caps on your underlying policies.

Question 8

Does standard homeowners or renters insurance cover flood damage or sewer backups?

Accepted Answer

No. Standard policies strictly exclude overland rising water and sewer backups. Flood protection requires a separate FEMA National Flood Insurance Program (NFIP) policy, and sewer backups require a specific water backup endorsement rider.

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