Clearing up claims confusion

DATE | 09/10/18
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Misunderstandings about insurance claims can be a sore subject...and you’re not alone if you’re unsure about what’s covered and what’s not on most insurance policies.

We offer some clarity on the most common questions we receive—and where our coverage differs from other companies. Some of the answers may surprise you!

Auto Insurance

My car is a total loss. But I’ll get a brand new car, right?

The amount of coverage for your automobile is based on depreciation of the vehicle. So for example, if your 2005 Ford Escape is involved in a total loss accident, you will receive a settlement based on the value of a 2005 Ford Escape, not a brand new Ford Escape.

However, if you’re with Member Benefits and have a total loss of a new vehicle that is less than 180 days (6 months) old, are the original owner, and carry both collision and comprehensive coverages, we will pay the original purchase price of the vehicle.

Secondly, unless related to safety, auto parts are depreciable items. So, if your 2010 Honda Accord (or any car older than three model years) needs a bumper replaced due to an accident, insurance companies will typically pay for an aftermarket or reconditioned bumper, not a brand new one.

My friend borrowed my car and got in an at-fault accident. Why did my rates go up?

When you loan your car, you loan your insurance—so your rates could go up if someone has an accident with your car.

However, if you have been insured with Member Benefits five or more years with no accidents or tickets in the household, we will waive the accident surcharge even if someone borrowed your car with your permission.

I have Emergency Road Service, why can’t you help me?

Member Benefits’ Emergency Road Service is a reimbursement program, not an on-call program. While our program costs less, members are required to make their own towing arrangements.

If you become stranded on the road and have Emergency Road Service (towing and labor reimbursement coverage) on your Member Benefits auto policy, contact any local towing company and we will reimburse you for the cost up to the limit of your policy. The costs of parts or materials such as gas or tires are not included in the coverage.

I slid during a storm and hit a tree. Why is that my fault?

The difference between an at-fault and not-at-fault accident isn’t always clear cut. Sometimes even when a certain type of accident is considered not-at-fault, a surcharge may still apply. Contact us when you have questions about these situations. We’re happy to talk with you and give you answers.

Here are some examples of situations considered at-fault and not-at-fault.


  • Rear-ending another driver even if the other driver stopped abruptly or for no apparent reason.
  • Backing into a family member’s vehicle or backing into your own garage door.
  • Hitting any object in the road, like a dead deer or construction barrel.
  • Weather related accidents with no other vehicles involved. (The weather isn’t considered to be at-fault because the driver could have reduced risk by slowing down or not driving at all in bad weather conditions.)
  • Opening a car door and hitting another vehicle.
  • Slipping on the road and hitting the curb or a pothole.
  • If two cars back up at the same time and hit each other in a parking lot, it’s generally 50/50 at-fault.


  • If you hit a deer or another animal that is moving.
  • Getting rear-ended, if the other driver was cited and their insurance company paid out the claim.
  • Damage from fire, vandalism, theft, hail, and some other events.

Home Insurance

I have water in the basement. Is it covered by my home policy?

A sewer or drain backup is considered flooding. Flood insurance is a separate policy issued from the government. It is not part of your home insurance policy.

However, water damage due to drain and sewer backup or sump pump overflow may be covered if you’ve added a Water Damage (Sewers and Drains) endorsement to your Member Benefits’ policy.

In addition, water coming in through the foundation is considered flooding. Many people think of flooding as “surface” flooding, such as what occurs near rivers and lakes. But ground water coming in is flooding. This is the case with ALL home policies in the United States.

Member Benefits consultants can help you evaluate your need for flood coverage and explain how an endorsement works.

The sewer line between my house and the street broke. Now what?

Sewer/water lines that break outside of the home are not covered by home insurance, and municipalities consider this the responsibility of the homeowner. However, you may be able to purchase “service line” coverage through your municipality. Check to see if it’s available in your area.

I have bats in my house and it’s not even Halloween! Am I covered?

If you have bats in your attic or some other type of animal, we know it’s upsetting. But home policies exclude “infestations” like squirrels, bats, or even termites.

However, if the infestation causes a sudden and accidental event—for example, squirrels or mice chew on wires causing a fire, or termites cause a wall to collapse—those types of situations are covered.

My couch is ruined. Why won’t you pay for it?

Covered events that happen to your house are different than covered events that happen to your personal property. Coverage on your house is not restricted to specific events (although it is subject to possible exclusions). Coverage on your personal property is restricted to 18 specific “named perils.” If you have our home policy, please see pages 8 and 9, “Risks Insured Against.” For example:

  • You spill paint on your living room carpet and the couch. Since the carpet is attached and part of your house, coverage applies. Since “spilling” is not one of the 18 covered perils, there is no coverage for the couch.
  • You are moving your TV and drop it on your hardwood floor, damaging both the TV and the hardwood floor. While your floor is covered, your TV is not because “dropping” is not a named personal property peril.

There goes our old tree. Will you help pay to remove it?

Tree removal coverage is for the removal of trees following a windstorm event. If a tree just falls down with no accompanying storm, there is no coverage.

Generally speaking, if a tree in your yard is downed by a windstorm and causes damage to your home or other insured outbuildings, your home insurance will pay for damages up to your policy limit, as long as it fell because of a covered loss. (If it falls on your car, it’s typically covered by your auto insurance policy’s comprehensive coverage.)

If a tree is downed in your yard but doesn’t damage your home, car, or other building, Member Benefits will cover the cost of removing the tree—up to $1,500—subject to your deductible. Most insurers provide only $250 to $500 in coverage in this situation.

Deciphering deductibles

Some people think that once they pay their deductible, they don’t have to pay it again if they have another accident in the same policy period. However, an auto or home insurance deductible is not like a health insurance deductible—it is charged per occurrence, not annually.

Our auto insurance benefits

If you are found at-fault for an auto accident, most companies remove your accident-free discount and add an accident surcharge for three years. With Member Benefits, the accident surcharge lasts for only two years.

We also appreciate your loyalty. If you are in an at-fault accident and you have been insured with us for five or more years with no accidents or tickets in the household, we will waive the accident surcharge.

Member Benefits does not surcharge for not-at-fault accidents or for a comprehensive claim such as hitting a moving animal.