Frequently Asked Questions
These questions and answers are of a general nature...they are not intended, nor should they be used, to replace, amend or modify any language, definition, coverage, exclusion or anything else in your insurance policy. Please read your insurance policy!
There are two classifications of insurance agents...independent and direct writer. Direct writers are generally restricted to selling one company's insurance product. They are oftentimes employees of that company. Independent agents are private business owners who are not restricted to any one company, but can research the available marketplace for the best coverage at the best price. DAI is proud to be an independent agency.
Property insurance insures "things"(auto, home, airplane, etc) against loss from perils (fire, theft, windstorm, hail, etc) as defined in the policy. Casualty insurance covers loss from legal liability.
An Insurance Policy is a contract between two parties (the insured and the insurance company). The basic insurance agreement says that the company will make whole (indemnify) the insured from loss from any covered peril.
A bond is a three party contract between the Principal, the Oblige, and the Surety. It is a credit relationship between the surety and the principal. The surety (bond company) guarantees to the oblige (e.g., Federal, State, or local government) that the principal will fulfill the obligations created through a contract, permit, lease, license, or some other agreement.
There is a key difference between a bond and insurance. If the surety suffers a loss as a result of extending bond credit, it has the right to recover that loss from the principal.
The concept of a personal surety's right to recovery (indemnity) from a principal was well established in English common law. Modern day surety is accomplished through the Insurance industry, and the indemnity agreement extends the right of indemnity to the modern, corporate world.
Because it is a credit relationship, the creditor (bond company) wants to make sure that the principal has the financial stability to fulfill the obligations of the underlying agreement. Like a bank, the bond company generally requires the personal guarantee of the owner(s) and spouse(s), along with that of the business
All states require employers to cover their employees against loss from physical injury that occurs on the job. Alaska law requires an employer to carry Worker's Comp if he has any employees
True "contract employees" are few and far between. Contract employees must fall into a very narrow definition and pass a series of test that eliminate the vast majority of workers from this category. Trust us, you probably do not have "contract employees", but if you think you do, contact the Department of Labor for confirmation.
Builder's Risk Insurance, also called Course of Construction Insurance, covers buildings and improvements while construction is underway.
If it were only that easy! Some policies are written to cover one or more named perils (fire, theft, windstorm, hail damage, etc.) If the damage is not caused by those perils, there is no coverage. Furthermore, each policy has named exclusions to coverage. An "All Risk" Policy just approaches the coverage problem from another angle. The All Risk Policy covers all perils not specifically excluded in the policy wording.
Insurance companies give their best rates to pilots who continue to upgrade their flight training and obtain additional ratings. Remaining current, obtaining a few hours of dual instruction each year, completing flight safety courses and logging loss free hours will all work to your advantage.
Prices, however, can fluctuate widely from year to year. Factors such as the number and severity of aviation accidents worldwide and lack of rate competition in Alaska will impact premiums.
Insurance companies will work with only one agent representing you at any one time. In order to change agent representatives, the company requires you to provide a signed and dated Broker of Record letter spelling out whom you want as your agent.
In essence, by signing a BOR letter you have fired one agent and hired another. There is nothing wrong with this, as long as the new agent spells out this fact and you understand the consequences. Too often an agent will ask the prospective client to sigh a BOR "in order to get a quote". Just remember that by signing a BOR you have just fired your agent and hired a new one for ALL of your insurance business.
Agency billed business creates an invoice, sent from the agency, that should be paid to that agency. Direct billed business creates an invoice, sent from the insurance company that is paid directly to that insurance company.
First of all, let's discuss how the agency makes money. Like most other agencies, we operate on approximately 10% commission...some policies pay more, some pay less. Credit card companies charge about 2% of the whole premium as a service fee. 2% of the total premium turns out to be 20% of our commission. The State of Alaska Insurance Division will not allow an agency to recover this fee from the customer, so accepting credit cards would reduce our revenue by 20%. As President Bush said, "Wouldn't be prudent."
We use a third party finance company that can finance most policies. The finance company requires a down payment (usually 20-35%) and monthly payments (usually 4-9 months). The finance company charges current market rates for their services.
Many insurance products (e.g., General Liability, Worker's Comp, Contract Bonds) are priced on factors that are uncertain at the beginning of a policy period. These factors can include annual payroll, annual revenue, or in the case of bonds, final contract price. The company charges an initial premium based on everyone's best guess of the final outcome. When the year (or contract) ends, the insurance company determines the actual basis and will invoice an additional or return premium accordingly.