Skip to content

Insurance FAQs

Q: Can I issue a certificate of insurance?
A: No. Only an "authorized representative" of the Insurance Company can issue a Certificate of Insurance. None of our Company partners permit our Brokers/Retail Producers to issue certificates.

Q: Are non-profit entities exempt from Surplus Lines Tax?
A: No.

Q: Once an E. A. Kelley Quote is issued to a Broker, does the Broker have authority to bind as quoted?
A: No. None of our Company Partners permit us to delegate binding authority to Broker/Retail Producers.

Q: Why do some States require Surplus Lines affadavits?
A: These documents explain to the policyholder that the Insurer is unlicensed in their state and as such is not protected by State Guaranty/Insolvency Funds.

Q: What is the difference between MINIMUM EARNED PREMIUM and MINIMUM & DEPOSIT PREMIUM?
A: Minimum Earned Premium means that if a policy is cancelled before the minimum is earned, customary pro-ration of return premium does not apply.
Minimum & Deposit Premium means that if the premium is subject to Audit at expiration, there is opportunity for ADDITIONAL PREMIUM ONLY if the basis of premium turns out to be higher than estimated. No premium will be returned based on Audit, if the premium basis is lower than estimated.

Q: What is a Surplus Lines Insurer? How is it different from a Licensed Insurer?
A: A "Surplus Lines Insurer" is not licensed by the State. Unlicensed Insurers may be approved to sell insurance in a particular State, but they are typically free from rate and form regulations by the state.

Q: Do Surplus Lines Insurers usually conduct premium audits at expirations of CGL policies?
A: Most Policy Conditions entitle the Insurer to audit an adjustable policy. The Insurer may elect not to, based on its underwriting guidelines. However, Policyholders need to understand that if the policy language permits it, Premium Audit is always an option for the Insurer.

Q: Can I assign loss adjusters in the event of a claim
A: No. Send a completed ACCORD loss notice with the relevant information to E A Kelley. We will forward to the relevant company within 1 work day.

Q: What is "Actual Cash Value"?
A: When "Actual Cash Value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property.

Q: What is "replacement cost"?
A: When "replacement cost" coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Commercial Insurance

Q: What is fire legal coverage?
A: Fire legal coverage provides coverage to for you if you rent a business space and are held responsible for fire damages to that rented space. It does not apply to all business risks.

Q: What is the difference between Replacement Cost (RC) and Actual Cash Value (ACV)?
A: Replacement Cost is the current cost to replace property. Actual Cash Value is the replacement cost less depreciation.

Q: What does 80% co-insurance mean?
A: Insurance carriers require that an insured party insure at least 80% of the property's value in order to collect a partial loss in full. This is the way the insurance company encourages all insureds to adequately insure their property in relation to other insureds.

Q: Does my policy cover physical damage to a vehicle I rent?
A: This damage will be covered only if that type of coverage is purchased.

Q: Can other people drive my business vehicle?
A: Other people may drive your vehicle with your permission. It is important that they be listed on your policy if they are regular drivers of the vehicle.

Q: How does an audit work?
A: At the end of the policy term, the insurance company will review the policy and either charge or credit the policyholder based upon an audit of estimated figures. Examples of estimated auditable items include sales and payroll. Audits can be performed onsite by an auditor or via mail or telephone. A premium is charged for audit estimations.

Q: Why do I need certificates of insurance from sub-contractors?
A: An audit may require you to show proof that sub-contractors had their own insurance coverage. The sub-contractors' certificates of insurance will prevent you from being charged for their exposure.

Q: What is General Liability?
A: General Liability provides coverage if you are liable for damages to other individuals arising from your premises, general operations (ongoing and after completion) and products manufactured or sold.

Q: What does Products/Completed Operations mean?
A: Products/Completed Operations refers to the liability coverage for damages caused by your operation or products after the point at which you no longer have control of them.

Q: What is Business Interruption/Extra Expense coverage?
A: Business Interruption/Extra Expense coverage provides coverage for income loss and the expense of establishing a temporary site during repairs due to damages related to a fire or compensable loss.

Q: What is the difference between "Named Insured", "First Named Insured" and "Additional Insured?"
A: Named Insureds are those listed by name in the relevant block of the policy's declaration page. Although the named insured is commonly one person, partnership, corporation or other entity with insurable interests, multiple named insureds may be included.

First Named Insured is the first "named insured" listed on the policy declarations (front page of the policy). This insured acts as the legal agent for all named insureds in initiating cancellation, requesting policy changes or accepting any return premiums. The first named insured may also be responsible for payment of the premiums.

Additional Insured is an entity to which a policy's coverage is extended. An additional insured must be added to the policy prior to a claim being paid. There must be a tied to relationship between the additional insured and named insured. Being an additional insured on another's policy does not eliminate the need for someone to have his/her own Commercial General Liability policy.

Home Insurance

Q: What is homeowners insurance?
A: Homeowners insurance is a form of personal lines insurance. The typical homeowners policy has two main sections:
1) covers the property of the insured and
2) provides personal liability coverage to the insured.

Q: What do I need to know when purchasing homeowners insurance?
A: Get the amount and type of insurance that you need.
Determine the amount of personal property insurance and personal liability coverage that you need.
Select any additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement?

Q: What is "actual cash value"?
A: When "actual cash value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property.

Q: What is replacement cost"?
A: When "replacement cost" coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Q: Where and when is my personal property covered?
A: Coverage C of a homeowners policy provides named perils coverage. This applies to all your personal property (except property that is specifically excluded).

Q: Should I purchase earthquake coverage?
A: Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. If you live in an area that is prone to earthquakes, you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.

Q: Should I purchase flood coverage?
A: If your property lies in a flood plain as determined by US Government Flood Maps. Ask your independent agent about a flood quote.