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Frequently Asked Questions

Insurance in Nashville, Tennessee

Below are some of our frequently asked questions.  If you have any other questions or concerns, please feel free to
contact us via the web, or come and visit us at a location near you.

  1. What exactly is Liability Insurance?
  2. What does Guaranteed Replacement mean?
  3. What is Replacement Cost?
  4. What is a Liability Umbrella Policy?
  5. What is Inland Marine Insurance?
  6. How can I be sure that my home is adequately insured?
  7. Do I need Building Code Upgrade coverage?
  8. What is Scheduled Jewelry Coverage?
  9. What coverage is excluded from my Homeowners Policy?
  10. If I own a classic or high value car, should I be concerned about its stated value coverage?
  11. What is a wind and hail deductible?
What exactly is Liability Insurance?
"Liability" means responsibility. When you cause damage to others, whether it's bodily injury or property damage, you are responsible for paying those damages. Likewise, when someone causes you bodily injury or property damage, you are covered under their liability insurance. If you own an automobile, home, or a business you are required to carry liability insurance. When you purchase an insurance policy, you are entering into a contract whereby the insurance company fulfills your legal responsibility to those individuals whom you've caused damage. With auto insurance this is the only coverage you are legally required to purchase. Other coverages such as collision, comprehensive, medical payments or uninsured motorists are optional. 

If you are a business owner you may need product liability, completed operations, liability for your employees, or employer practices liability (EPL), which covers molestation/abuse, sexual harrassment and racial discrimination.

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What does Guaranteed Replacement mean?
In the event your home is completely destroyed by a fire, you'll want to be sure it's replaced with a home that has the same square footage, updates, and features. In Nashville, frequently homes are either over-insured or under-insured. Before we write your policy, we'll recalculate the replacement cost of your home using the most recent construction data for your zip code. Once we establish the updated replacement cost, we'll  design a policy that includes Unlimited Guaranteed Replacement. This policy endorsement guarantees that your new home will be rebuilt with the exact feature specifications of your current home. 

Inflation Guard is also included, which allows your dwelling coverage to keep pace with inflation from year to year.

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What is Replacement Cost?
In the event of a personal property (or contents) claim, insurance companies will settle in one of two ways: Actual Cash Value (ACV) or Replacement Cost (RC). Actual Cash Value is the depreciated value of your property, which results in an undesirable settlement. Replacement Cost provides coverage for the current market value of your items. For example, if you bought a sofa ten years ago for $1000, that same sofa may be worth $300 today, which is what you'll receive in the event of an ACV settlement.  Replacement Cost allows you to buy a new item in today's marketplace. Your $1000 sofa may now cost $1300 to replace today, which is the amount you'll recieve with a Replacement Cost settlement.

All of our homeowner polices contain this important endorsement.

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What is a Liability Umbrella Policy?
Read  the paper lately? Lawsuits are on the rise, which is why you may need a Liability Umbrella Policy. Whether you're independently wealthy or just out of college, you have substantial personal assets to protect. Wealthy individuals, perceived as having “deep pockets”, are particularly vulnerable to being sued. On the other hand, young professionals often will earn over a million dollars in their lifetime, an asset that also needs to be protected. An Umbrella Policy solves this problem - and protects you from financial disaster resulting from a lawsuit.

Whether it's behind the wheel of your car, your dog biting a neighbor, or someone being injured at your cookout, an umbrella policy covers anything you say or do, whether you're personally negligent or not.  In addition, they cover you anywhere in the world. They usually start at about $125 per year, with coverage limits ranging from $1,000,000 to $5,000,000.

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What is Inland Marine Insurance?

Inland Marine coverage is for specially scheduled items like jewelry, fine arts, or special collections such as stamps, guns, or trading cards. This specialty policy removes restrictions that you have on a basic home owner policy, like:    

  •  Damage to a painting that is bumped at a party and rips
  •  Loss, misplacement or damage of jewelry       
  •  Missing stones from jewelry


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How can I be sure that my home is adequately insured?
Frequently agents will under-insure your home to lower the premium and win your business. In addition, many homeowners will make improvements to their homes without notifying their agent. This results in the vast majority of homes being underinsured. We will reassess the replacement cost of your home by looking at the most recent data for material and labor costs in your zip code. In addition, by surveying the specific features of your home we can provide you an updated, accurate replacement cost, assuring you will never be under-insured again!

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Do I need Building Code Upgrade coverage?
Your homeowner policy does not automatically include Building Code Upgrade Coverage. For example, in the event of a total loss, an older home that has not had upgrades to its electrical, plumbing, heating, roofing or structure, will be required to be rebuilt with those costly upgrades. For example, many counties now require new homes be built with sprinkler systems. You, the insured, will be required to pay for these upgrades - unless you have Building Code Upgrade Coverage.

It's usually about $30 per year.

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What is Scheduled Jewelry Coverage?
Your homeowner policy does provide limited coverage for jewelry, subject to your deductible, usually with a $2500 limit. In addition, how the jewelry is covered is also restricted. For example, your homeowner policy restricts coverage for jewelry to cover only fire and theft loss. Scheduled jewelry coverage is All Risk coverage. This includes mysterious disappearance, damage, or a missing stone,  with a $0 deductible. Higher deductibles can be used to reduce the cost.

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What coverage is excluded from my Homeowners Policy?

Typically, an insurance policy is only as good as its exclusions. It’s always a good idea to read through your Policy Exclusions, because if it’s not stated here, it’s covered. A typical homeowner policy will include some or all of the following exclusions:

  1. Earthquake insurance, unless you purchase this coverage by special endorsement.
  2. Flood insurance, unless you purchase this coverage by special endorsement.
  3. Coverage for damage or misplacing of Personal Property, unless you purchase this coverage by special endorsement.  
  4. Bodily injury or property damage caused by an insured to himself or to another named insured, or to an insured’s property, whether accidental or intentional.
  5. Bodily injury or property damage caused by a named insured, with the intent to cause such damage.
  6. Bodily injury or property damage arising out of willful violation of the law. 
  7. Bodily injury or property damage arising out of business pursuits of a named insured, typically covered under a business policy.   
  8. Bodily injury or property damage arising out of renting the property to another named insured.
  9. Bodily injury or property damage arising out of the rendering of professional services, such as medical services, architectural services, legal services, installing, accounting, beauty, designing or consulting.
  10. Bodily injury or property damage arising out of the ownership or operation of an aircraft.
  11. Bodily injury or property damage arising out of the sale, manufacture, or use of a controlled substance.
  12. Bodily injury or property damage arising out of the discharging of any kind of thermal irritant, pollutant, or contaminant, including smoke, vapors, soot, fumes, acids or chemicals. 
  13. Bodily injury or property damage arising out of a communicable disease. 
  14. Suits for libel, slander, or defamation of character of a named insured.

 



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If I own a classic or high value car, should I be concerned about its stated value coverage?
Yes! When you insure a classic car with a stated value, this doesn't guarantee that you'll receive that in the event of a total loss. Standard auto insurance carriers will use blue book or actual cash value to settle your loss. Most of the time you'll receive an amount substantially less than the stated amount on your policy. In order to receive the full stated value of your vehicle, you must obtain a guaranteed replacement policy. At Johnston & Associates, we represent the top names in classic car insurance such as Hagerty and Grundy. In the event of a total loss or theft of your vehicle, these companies will write you a check for the full stated value with no squabbling or undercutting involved. These policies are always reasonably priced because of the various requirements they've put in place. Call us for more details.

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What is a wind and hail deductible?
A wind/hail deductible is a 1 or 2% deductible that more and more insurance companies are including in their Tennessee homeowner policies. It is a significant change to the homeowner insurance policy in that it reduces or almost totally eliminates an insurance company's liability to you, the policyholder in the event of a major wind or hail claim. It works this way - if your dwelling is insured for $300,000, your deductible would be $3000 with a 2% deductible, that amount would be $6000. These are significant out of pocket expenses to you, the policyholder. So when buying your next homeowner or condo owner's policy, make sure you ask about this as more and more of the larger companies are including these mandatorily.

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321 Billingsly Court, Suite 18
Franklin, TN 37067
615-716-2123
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