Insurance FAQs

Almost every state in the U.S. requires drivers to have some type of auto insurance. In Missouri, auto insurance is a legal requirement for all drivers. Missouri motorists must have two types of coverage — liability and uninsured motorist coverage.

• • Liability coverage: Liability coverage protects you when you injure someone or damage their vehicle while driving, and you’re the one at fault. Specifically, you’re required to have a minimum of $25,000 worth of coverage for bodily injury per person, $50,000 of coverage for bodily injuries involving multiple people in an accident and $25,000 for property damage. Just changed to 25,000 this year

• Uninsured motorist coverage: In Missouri, you are also required to carry uninsured motorist coverage. This policy will cover you if you get into a wreck with a driver who should cover your costs but is driving uninsured. You don’t need property damage coverage in this case, but you do need at least $25,000 for bodily injury per person and $50,000 for total bodily injury.

Missourians must present proof of their coverage when they register a vehicle for the first time and when they renew their license plates. Additionally, if you are pulled over by law enforcement, you’ll be asked to show your proof of insurance. This proof can come in the form of a card or an image on your mobile phone. If you fail to show proof of insurance, you’ll receive one of these three penalties:

• Points on license: One potential penalty is that you’ll have four points assessed against your driving record. If you end up with eight points on your record within 18 months, you will lose your driving privileges.
• Order of supervision: Another possibility is that the court will decide to send an order of supervision to the Department of Revenue. This means you’ll be monitored to make sure you’re maintaining the required levels of auto insurance coverage.
• Suspension of driving privilege: The harshest potential penalty you could face is that your driving privileges are immediately suspended.

The cost of auto insurance depends on a whole host of factors. If you want a general idea of how much you’ll pay, though, you can look at the average cost of car insurance across the nation or in your home state. Looking up an average for your state will likely give you a more accurate idea of what you’ll pay.

The average cost of auto insurance in Missouri is roughly in the range of $745 to $1,256, according to two recent studies. These estimates are substantially lower than the average cost of car insurance for the country as a whole, which is great news for Missourians. You may also be able to enjoy discount car insurance if you bundle it with other policies.

The premium you pay for your auto insurance is based on the level of coverage you have and the deductible you’re willing to pay, along with many other factors, including:

• Your credit history: Your credit history helps an insurance company assess the likelihood that you’ll file a claim. If you have a good credit score, this will help you get lower premiums, while a more problematic credit history will result in higher premiums.
• Your vehicle: The make, model and age of your vehicle play an important part in determining what you’ll pay for collision and comprehensive insurance. In general, a car that would be more expensive to replace will require more expensive coverage.
• Your demographics: Your age and gender play a role in setting your premium rates because these demographics can place you into groups that statistically are known for having higher or lower rates of vehicle accidents.
• Your driving history and habits: If you have a history of traffic tickets or accidents, you can expect to pay higher premiums, while a history of safe driving will help keep your premiums lower. If you only drive occasionally, this should also lower your premiums.

As with other types of insurance policies, auto insurance policies include deductibles. A deductible is the amount of money you are obligated to pay when you file a claim before your insurance coverage will take over. For instance, if your deductible is $500, and you get into an accident that would cost you $2,000, then you would pay the first $500, and your insurance company would pay the remaining $1,500.

When you purchase an insurance policy, you’ll have the option of opting for a higher deductible, which will result in lower premiums, but will mean you have to pay more before your insurance coverage comes into play in the event of a covered accident.

If you’re planning to purchase a new vehicle, you’ll need to get an auto insurance policy in place first. If you already have an auto insurance policy, then you should automatically be covered by this policy and will have a brief period of time, typically 14 days, to let your insurance company know about your new vehicle.

If this is your first car, and you don’t already have car insurance, then you’ll want to do some research to find out what car you plan to buy. Ask the dealership for the vehicle identification number (VIN), then talk to your new insurance company about the vehicle you plan to buy so they can accurately set your premiums. If you don’t have insurance when you go to purchase a car, you won’t be able to drive that car off the lot. You may not even be able to complete the paperwork to purchase it.

Collision insurance coverage helps reimburse you for repairs or replacement costs if you’re in an accident. If you get into a collision with another driver, and the accident was their fault, their insurance should cover your damages. However, if the accident was your fault, this won’t help you. Collision coverage doesn’t only include accident with other drivers — it could also involve damage from running into a tree, for example.

Collision coverage is a smart way to protect yourself financially if you get into an accident. However, you will have to pay a deductible before your insurance takes over. If you drive an older car that isn’t worth much and would readily be considered totaled if you got into an accident, then it may not be worth it to have collision insurance because the amount you’d be awarded may not justify the premiums and deductible you’d pay. Consult with your insurance company to find out whether collision coverage is a good idea for you.

Life insurance isn’t necessary in every case, but it is often the responsible choice. If you identify with any of the following descriptions, then you should strongly consider getting a life insurance policy:

• Your spouse depends on your income.
• You have children who depend on your income.
• A relative, such as an elderly parent, depends on you as their caregiver.
• You are a business owner or partner.
• You have significant debts, such as a mortgage, that would fall on your family.

Essentially, if anyone besides you depends on you for their wellbeing, then you should consider purchasing a life insurance policy to provide for them in your absence. Even if no one depends on you, you should consider whether your death would become a financial burden for your family. According to the National Funeral Directors Association, the final costs of a viewing, funeral and burial with a vault costs about $8,508 on average. This doesn’t include other costs such as a marker or monument.

Life insurance isn’t a necessity for everyone. If no one in your life depends on you financially, then you may not need life insurance. Life insurance isn’t for you — it’s for the people who need you to provide for their financial needs. If you don’t have a spouse or children, then you probably don’t need life insurance. Even if you have a spouse, if they have their own source of income and wouldn’t be burdened financially by your death, then you may not need a life insurance policy.

That said, even if your family doesn’t depend on your income, a death benefit could still be extremely helpful for them, as it would help cover your funeral expenses. If you have a spouse, a death benefit would also give them the financial ability to take time off of work to grieve and get back on their feet. Every person and situation is different, so you may want to speak with an insurance broker or agent to see whether you should have life insurance.

Your beneficiary is the person who will receive the death benefit from your life insurance policy. You can designate anyone you want — including multiple people — as your beneficiary and can change the beneficiary at any point, which is helpful in the case of divorce, for example. To choose your beneficiary, consider who you’re getting life insurance for. Who, in the event of your death, would be burdened financially?

Note that, if you want to name a minor as a beneficiary, you will need to designate a legal guardian or trust who can receive the death benefit instead and then pass it onto the child.

There are two basic types of life insurance policies — term and permanent. The difference is in how long the policy will last.

• Term: Term policies lock in a certain premium rate for a specified number of years. As long as you make your premium payments, you’ll keep your policy in place until the end of the term. Then, you’ll have to get a new policy, possibly with a higher premium.
• Permanent: Permanent policies don’t end after a particular number of years. Instead, as long as you make your premium payments, you’ll never have to shop for a new policy.

Which type of policy is best for you depends on your individual situation, so you should talk to an insurance agent to learn more about which policy would best fit your needs.

There are two main types of permanent life insurance policies — whole and universal. Both types combine your life insurance with an investment savings component.

• Whole: This is the most common type of permanent insurance policy. Whole life insurance offers you more stability than a universal plan since you can lock in your premium rates for life. You can also build cash value over time at a steady rate. However, whole life insurance policies tend to come with higher premiums, and the cash value increases at an interest rate that’s generally lower than it would be in other investment opportunities.
• Universal: Also sometimes called adjustable insurance, universal policies come with lower premiums and offer more flexibility than whole life insurance policies. However, they offer less consistency. Your cash value, in this case, grows according to current interest rates, which allows you to benefit when interest rates are high but also may cause your investment to grow slowly if interest rates happen to be low.

An annuity isn’t a life insurance policy, but it’s another type of financial product that some people consider in place of life insurance. An annuity is an investment contract that offers a death benefit to your beneficiary and also offers you financial benefits if you end up living a long life and exhaust your assets. This sets annuities apart from life insurance policies since life insurance is primarily designed to help in the case of an untimely death.

As you pay into the annuity, your funds earn a rate of return, tax-deferred. This interest rate may be fixed or variable. If you pass away, your beneficiaries will receive your annuity savings, either all at once or in payments over time. If you live a long and healthy life, you can draw on your funds.

If you have life insurance through a benefits package offered by your place of employment, you may think you’re all set. However, it may not be enough. Typically, the death benefits your beneficiaries would receive is tied to your salary and is either one or two years’ salary. If this amount would be enough to cover your final costs and debts and sufficiently provide for your family or dependents, then you don’t need any additional coverage.

However, if this death benefit wouldn’t be enough to cover these costs, then you should consider getting another policy to make up for the difference. Another concern with employer-provided plans is that they will be terminated if you ever leave your current job. If you want to make sure your family is consistently protected, you should get a life insurance policy that is independent of your work.

Companies deal with many risks that may warrant many different types of insurance coverage. These risks may differ from business to business. For example, some companies may need liquor liability insurance, while this type of policy would be irrelevant to other companies. However, there are some risks virtually all businesses share.

For example, no matter the type of business you run, your employees could be injured on the job, a customer could sue you, or you could make a bad investment and lose money. Insurance is designed to give businesses the cushion they need to have peace of mind in the face of unavoidable risks.

The types of policies you should get for your company depend on your unique needs. However, there are certain types of commercial insurance that businesses are required to have.

In Missouri, if you employ five or more people, then you are required to have workers’ compensation insurance. If you’re in the construction industry, then you’re required to get workers’ compensation insurance, even if you have just one employee. In either case, a person is considered an employee whether they’re full-time, part-time or even family members. If you have any company vehicles your employees use for work purpose, then you also need commercial auto insurance.

You could shop around for commercial insurance policies, but it’s preferable to bundle your commercial insurance policies. Look for an insurance company like David Pope that can combine all the commercial policies you need into one comprehensive plan. This simplifies matters and can also save you a lot of money.

When you combine policies from the same provider, your insurance agent can take advantage of insurance bundle discounts and work to get you the lowest premiums possible on each policy to make your coverage fit well within your company’s budget.

If you have a small or budding business that operates out of your home, you may wonder whether you need commercial property insurance or whether your homeowners’ insurance is enough. A standard home insurance policy may offer some coverage for your business property kept inside the home, whether that be electronics, tools or any other type of business-related property.

However, the coverage limits may not be enough to cover the replacement costs for valuable equipment or inventory related to your business. For this reason, you should look at the details of your homeowners’ policy and consider purchasing a separate business owner property insurance policy to cover your business property.

Umbrella coverage covers a wide range of insurance (hence the name) and is most effective for people or businesses who have more than one insurance plan. It is most commonly recognized in business because of the wide variety of plans many businesses have, but it is also an extremely effective insurance plan for people with both home and auto insurance.

You may recognize what many types of commercial insurance policies are for based only on their names. However, it’s not as obvious what umbrella policies are for. A commercial umbrella insurance policy gives you an extra layer of protection that transcends your other policies. In other words, if you exceed the limits of how much money you can receive from your insurance company through your primary insurance policies, your umbrella policy would protect you from having to pay the remaining costs out of pocket.

This may seem excessive to some, but it could be extremely helpful if you ever needed it, and it may fit easily into your budget. Many umbrella policies offer an extra $1 million of coverage, and will only cost you a tiny fraction of that in premiums.

If you have insurance, have read up on umbrella insurance and are wondering if you need an umbrella policy, you probably do. While this coverage can be complex and confusing it simply places a buffer over a wide range of insured assets for only a small amount in premiums. This will, in a way, enhance all of your existing insurance and fill in areas your existing plans might not account for.