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Previous Questions with Answers:

I travel to a lot of airports. What's the deal with auto rental insurance? Should I buy the stuff at the counter or am I protected?
John D.

Auto rental agencies offer collision damage waivers as well as liability policies. The collision damage waiver is not insurance. It is an agreement that the rental company will waive its right to recover the costs of the damage to the auto from the renter with certain exceptions, regardless of who's at fault.

If you have an auto liability policy, it already covers damage to a rental car. Your coverage limit, however, might be less than the value of a rental car. If you rent cars often, it might cost less to raise the liability limit on your auto policy rather than buying collision damage waivers each time you rent. The Texas Automobile Rental Liability Policy provides liability insurance for renters who do not have a personal auto policy.

If you don't own a car, but borrow or rent cars often, you can buy a non-owner liability policy. A non-owner policy pays for damages and injuries you cause when driving a borrowed or rented car but not for damage to the auto you're driving

Is Texas a "no fault" insurance state?
William T.

"No-fault" insurance is where your auto policy must pay medical bills for injuries suffered in an auto accident regardless of who caused the accident. These laws were enacted in some states in an attempt to reduce auto-injury fraud and keep insurance costs down. Sorry, not in Texas.

I'm traveling to Mexico. Is my Texas/US auto insurance good outside the country?
Janice F.

Your Texas policy automatically meets the financial responsibility requirements of other U.S. states and Canada. Mexico, however, does not recognize U.S. auto liability policies.

Mexico does not require drivers to have automobile liability insurance. On the other hand, drivers can be held criminally and financially responsible for any auto accidente they cause. If you're in a caida or crash that results in an injury, police in Mexico may detain you until they determine who's at fault. You will have to show that you either have insurance recognized by the Mexican government or the financial ability to pay any judgment (and related 'fees') against you.

You can buy Mexican liability insurance from Texas agents who specialize in it. Check with Greta. Your policy may provide a free endorsement extending your policy's coverage to infrequent trips of up to 10 days and as far as 25 miles into Mexico. You can buy coverage for longer stays, but it's valid only within 25 miles of the border.

There are agents that specialize in car insurance for travel in Mexico. Greta can point you in the direction of a Texas-licensed Mexican company.

For more fabuloso coverage, you may be able to buy a limited Mexico "tourist" endorsement that extends your Texas liability coverage to pay expenses exceeding those covered by a Mexican liability policy. This endorsement covers trips of any distance and any length of time. Ask.

If I buy a new used car and drive it home, does my existing auto insurance cover the trip?
Yvonne M.

If you buy an additional car, your policy will automatically cover it, but there are certain limitations. The additional car automatically has the same coverage as the car with the broadest coverage provided by your policy. For example, if you have two cars - one with liability coverage only and one with liability, collision, and comprehensive - and you buy a third car, the third car will automatically have liability, collision, and comprehensive coverage.

A replacement car automatically has the same coverage as the car it replaced. For example, if you trade in an older car that only had liability coverage, the new car will automatically have only liability coverage.

Be sure to notify Greta or your insurance company as soon as possible that you have added or replaced a car and which coverages you want. You could lose coverage on the new car if you wait longer than 30 days.

What's the difference between cancellation and the oddly named nonrenewal?


There is a big difference between an insurance company canceling a policy and choosing not to renew it. Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:

Nonrenewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. In Texas, your insurance company must give you thirty days' notice and explain the reason for not renewing before it drops your policy. If you think the reason is unfair or want a better explanation, talk to the insurance company's consumer affairs division. Greta will help. If you still don't get a satisfactory explanation you can formally complain to the Texas Department of Insurance.

Nonrenewal may not have anything to do with you. The company may have decided to drop your particular line of insurance or to write fewer policies where you live. On the other hand, if you did do something that raised the insurance company's risk considerably (like drunken road rage in a tough neighborhood), you may pay a higher premium not have your policy renewed.

If your insurance company did not renew your policy, you won't necessarily be charged a higher premium at another insurance company. Greta will find you another company.

I work out of my house. Does my homeowners cover my home office?
Michael T.

Most homeowners policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance. Greta can evaluate your situation and help you determine if you need a separate business policy.

How can I tell if I have enough homeowners insurance?
Maria G.

Your insurance policy likely offers one of three options: replacement cost, guaranteed replacement cost, or actual cash value. Understand what you have. Greta can help.

Replacement cost: Insurance that pays the policyholder the cost of the damaged property without deduction for depreciation, but limited to a maximum dollar amount.

Guaranteed replacement cost: Insurance that pays the full cost of replacing damaged property, without a deduction for depreciation and without a dollar limit. This coverage is pricey in Texas and some companies limit the coverage to 120% of the cost of rebuilding your home. Guaranteed means you're protected against such things as a sudden increase in construction costs due to a shortage of building materials.

Actual cash value: Insurance under which the policyholder receives an amount equal to the replacement value of damaged property minus an allowance for depreciation. Unless a homeowner's policy specifies that property is covered for its replacement value, the coverage is for actual cash value.

Because you have a mortgage, you know your lender requires homeowner's coverage. If you think that by satisfying your mortgage company you're set, you're in for a rude awakening. The mortgage company only cares about insurance for the mortgage amount, which is probably significantly less than what you paid for the home. Remember, you sold your Data General stock, your Toyota Supra and some blood plasma to make a down payment. Also remember you've built up some equity--sweat and the other kind. Even subtracting the value of the lot the structure sits on, when you talk insurance for the mortgage amount only, you are considerably underinsured.

Your goal probably is not simply to obtain insurance commensurate with the market value of your home, either. We sell the stuff, sure. But think about it. A policy for replacement value -- whatever it costs to rebuild your home as close to the original as possible, offers the best peace of mind. Try to save money with an actual cash value policy and you might end up after the catastrophe with something manufactured or staked to the ground, rather than the tract house with the blown-in insulation and builder-grade cabinets you're used to.

I live in an old Victorian home with antique fixtures (and barely updated plumbing). Will my homeowners policy take the historic value into consideration?
Allen H.

With a custom or historic home, it's very possible that the cost to rebuild could exceed the house's market value at a given time. It takes special expertise to determine the replacement cost for features of an historic home that may be hard to find or rarely crafted today, like hickory flooring or distinctive windows or one of those tall toilets with the chain hanging down. Nonetheless, after a fire levels your dream home, you want features as close as possible to those you built or bought.

National Lloyd's is one of the few Texas home insurers left offering guaranteed replacement cost insurance and expertise in custom and historic home coverage. A policy for a custom or historic home usually involves an onsite inspection, in-home photos and analysis, and a home appraisal, not common with everyday coverage.

A custom or historic home policy may very well cost you more, but this is one area where you shouldn't get too conservative. Apply for insurance in the amount it would cost to rebuild your specific home as close to the original as possible. Document your home's features yourself through photos and keeping receipts for major purchases. Review your policy every year to make sure it fits your needs, especially if you have added or renovated space.

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