Most popular Car insurance questions and answers from FAQs:

How long do tickets and accidents affect your insurance in Ohio?
According to the Ohio's Bureau of Motor Vehicles, there is no section of the Ohio Revised Code (ORC) that states convictions ever come off of a person's driving record. Your OH auto insurance premium can go up if you cause an accident or have a moving violation. The company can raise ("surcharge") your premium if you are at fault in an accident or if you get several traffic tickets. But, you should not be surcharged for a minor moving violation or a single accident that was not your fault according to the Ohio Insurance Department of Insurance. Premiums cannot change until your next renewal date either according to the DOI. Different companies have different rules. Many do not consider incidents that are more than three years old, but some auto insurers will look back as far as five years in Ohio. If it has been over 3 or 5 years since your last ticket or moving violation conviction it does not necessarily mean that your insurance company will automatically lower your premium. The Ohio Insurance Department of Insurance notes that periodically you should ask your insurer to review your premium to make sure you are getting the best rate possible. Also, as your driving record improves, it may be time to start shopping for a better deal.
What is the minimum car insurance coverage allowed in the state of Ohio?
What we mean is coverage on injuries and damage to the other driver. The Ohio State law requires motor vehicle financial responsibility in the minimum amount of $12,500 for bodily injury or death to one individual in any one accident, $25,000 for bodily injury for two or more individuals in any one accident and $7,500 for injury to the property of others in any one accident. This financial responsibility (FR) law is not a compulsory automobile insurance thus no motorist is forced to buy auto liability insurance. The law does require drivers to be insured or have other arrangements to pay or injuries and damages they cause in the event of a crash. FR must be maintained and should be proven to the OH Bureau of Motor Vehicles in one of several ways. For more information you can go to Ohioinsurance.org. If you are searching for Ohio insurance look no further for an OH affordable car insurance quote.
How can I find out how many points I have on my PA license and how long does it take for them to be removed?
You may request a three-year or ten-year copy of your driver's history by using Pennsylvania"s Driver and Vehicle Services Online Services by completing a 'Request for Driver Information' form and submitting it to PennDOT. Certified histories are only available by completing this driving record request form (Form DL-503). The form contains detailed instructions and lists fees for different types of driving records. By receiving a copy of your driving history from PennDOT you will be able to see how many points you have accumulated on your record so far. The Driver and Vehicle Services portion of the Pennsylvania Department of Transportation (PennDOT) maintains a driving record for every licensed driver in Pennsylvania. Points are added to the driving record (associated with your driver's license) when the driver is found guilty of certain driving (moving) violations. PennDOT allow points to be removed from your driving record for safe driving. You can get 3 points removed from your driving history for every 12 consecutive months (from the date of the last violation) you go without a violation, which results in points, license suspension or revocation.Once a driving record is reduced to zero and remains at zero points for 12 consecutive months, any further accumulation of points is treated as the first accumulation of points.
I live in Ontario, Canada and got a traffic ticket in Oregon for 18 mph over with $145 fine. Will that affect my points and insurance? Should I pay for the fine?
According to the information we were able to gather, all provinces in Canada have a reciprocal agreement with Ontario regarding moving violations. Ontario also has agreement with 41 states, including Michigan. See the bottom of this answer for a list of all the states Ontario supposedly has some type of reciprocal agreement with. If the Oregon speeding ticket is placed on your Ontario, Canada driving record, than your insurance company could see if the next time they pull your MVR and thus your rates may be affected. The following states in the U.S. have a reciprocal agreement with Ontario: Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming. We would always advise for a driver to comply with a moving violation by either paying the fine, fighting it in court or another legal remedy. Without taking care of a ticket that is received out of state or even out of country there is the chance that the state that issued the citation will come after you and affect your license. Plus if you have a failure to appear on your record in Oregon it could affect your driving privileges if you travel there again, plus if you do pay the find after the court date the fine and court fees are likely to be higher than if you paid on time.The Ministry of Transportation (MOT) for Ontario may be able to give you more information on the reciprocal agreements they have with various states and how a ticket in Oregon could affect your license in Ontario.
I live in Texas and my car was totaled and it was not my fault. Is there a way to keep my car and get the most money the insurance will give me to fix my car?
And could I sue to make up for the difference. If you want to keep your car then normally you would request this of the insurance company and if they allow you to do so then the salvage value of the vehicle is taken out of the settlement (for the car's actual cash value) you would receive for the vehicle. When you take a settlement for the car's ACV then you usually cannot sue the driver for additional monies. According to the Texas Department of Insurance (TDI) consumer for auto insurance, an insurance company will pay for repairs or replacement only up to the car's actual cash value. Actual cash value is the amount that your car would have sold for before the accident The car insurance consumer guide speaks about the issue you are having by noting that sometimes the insurance company may want to total your car, but you would prefer to have it repaired instead. You normally can keep your car if you are willing to subtract its salvage value from the insurance settlement. First make sure the cost to repair the car will not exceed the car's actual cash value. To find out the salvage value, contact local salvage yards for estimatesIf your insurance company totals your car but you cannot reach an agreement on the amount to be paid, you can demand an appraisal. Appraisal allows you and the company to hire separate damage appraisers. The two appraisers choose a third appraiser to act as an umpire. The appraisers then review your claim, and the umpire rules on any disagreements. The appraisal decision is binding, but only as to the amount of the loss.
What is an SR-22 form?
SR-22 insurance varies state to state. The basic definition of an SR-22 form is available on our Insurance Terms page. SR-22 isn't a type of insurance, but rather proof that you have certain types of insurance (based upon the financial responsbility laws of your state). Simply, it is a form which must be filed by the insurance company to the state (Department of Motor Vehicles) stating that auto liability insurance is in effect for a particular individual.Typically it is required when insurance is provided to an individual who was in an accident or was convicted of a traffic offense and was unable to show financial responsibility OR if a judge has ordered an SR22 for other reasons (in some states).
I just got a speeding ticket. How much will it affect my auto insurance premium?
If it was your first ticket, you might not see any change in your rates. Some states have laws governing when and why auto insurers can change policyholders' premiums; often, insurers are not allowed to raise your rates after just one speeding ticket or other citation. Different companies have different practices when it comes to raising premiums. Some companies will consider the severity of your violation and raise your rates accordingly; others will raise rates a specific amount per violation. Because there are too many factors to simply say it will be $50 more a year, here is a real example: The average New York auto insurance policy costs $1313 a year. If you have a clean driving record then most New York companies offer a discount. That discount is typically a 25% savings ($328). So, using these averages a driver with a clean driving record is paying $985 a year for car insurance.One speeding ticket would remove that discount and increase the base rate by 2%. That is a $354 increase a year, or $1062 over 3 years (companies usually surcharge for 3 years).
What happens when my car is totaled in an accident?
When your car is totaled, the insurance company has an obligation to "make you whole," as that is defined in the policy. Most policies value your vehicle using Actual Cash Value. "Actual Cash Value" means replacement value less depreciation. This essentially means you have to be left in approximately the same financial position (with respect to the item insured - not in respect to any liens or leases that hold title to your car) you were in before the accident.If you have physical damage coverage (comprehensive and collision) the insurance company will typically write you a check for the actual cash value of the vehicle, minus any deductible on your policy. If you are "upside down" on your loan or the cash value is less than your current loan amount ("Upside down" means owing more on a car than it's worth.) then you should consider GAP insurance. In this situation, if you don't have GAP insurance then you would be responsible toward your loan for the remaining balance. The terms of that payment are set through you loan contract.
I just received a speeding ticket out of state from the state which issued my license. My home state DMV does not record out-of-state tickets, and the points or incident do not appear on my driving record. Is there any way that my insurance company will still find out about this, and will my rates increase?
It is always possible that your state may learn about this incident. If they do and if it was your first ticket, you might not see any change in your rates. Most states have reciprocal arrangements and provide ticket information to the driver's home state. Some states are members of the driver"s license agreement (DLA) which means they share information between their motor vehicle departments. Members of this agreement have different rules to what they transfer over and if points are accessed, etc. Some states have laws governing when and why auto insurers can change policyholders' premiums; often, insurers are not allowed to raise your rates after just one speeding ticket or other citation. Different companies have different practices when it comes to raising premiums. Some companies will consider the severity of your violation and raise your rates accordingly; others will raise rates a specific amount per violation.Get car insurance quotes here to determine how this could affect your premiums.
What is an auto insurance policy?
An insurance policy is a legally binding contract between an insurance company and the person who buys the policy, commonly called the "insured" or the "policyholder." In exchange for payment of a specified sum of money, called the "premium," the insurance company agrees to pay for certain types of loss or damage as specified by the contract. When a loss occurs which meets all of the requirements described by the terms of an insurance policy, the loss is said to be "covered" by that policy.
What is an "insurable interest"?
A person has an "insurable interest" in something when loss or damage to it would cause that person to suffer a financial loss or certain other kinds of losses. For example, if the house you own is damaged by fire, the value of your house has been reduced, and whether you pay to have the house rebuilt or sell it at a reduced price, you have suffered a financial loss resulting from the fire. By contrast, if your neighbor's house, which you do not own, is damaged by fire, you may feel sympathy for your neighbor and you may be emotionally upset, but you have not suffered a financial loss from the fire. You have an insurable interest in your own house, but in this example you do not have an insurable interest in your neighbor's house. A basic requirement for all types of insurance is the person who buys a policy must have an insurable interest in the subject of the insurance. You have an insurable interest in any property you own or which is in your possession.For purposes of life insurance, everyone is considered to have an insurable interest in their own lives as well as the lives of their spouses and dependents. For property and casualty insurance, the insurable interest must exist both at the time the insurance is purchased and at the time a loss occurs. For life insurance, the insurable interest only needs to exist at the time the policy is purchased.
How does an insurance policy "protect" me?
Insurance policies offer protection against economic loss, that is, loss or damage which can be measured in purely financial terms and compensated by money. For example, an insurance policy can pay for the cost to repair or replace a damaged automobile or to rebuild a building damaged by fire, for the cost of medical treatment for an injury or illness or for the lost income of a person who dies or is unable to work. The purpose is to place the injured party, as nearly as possible, in the same financial position as if the loss had not occurred.It is important to understand this limitation of insurance, since there are many types of losses which can not be compensated by money. For example, insurance can not replace a life or take away the emotional injury or pain which often accompanies an accident or serious illness or compensate for loss of the "sentimental" value of an item of property. When you buy homeowners property insurance, for example, you are insuring only the economic value of the home, i.e., the cost to repair or rebuild it.
Are there any government agencies that regulate how insurance companies operate?
Insurance companies in the United States are regulated primarily by the individual states. There is no federal regulatory agency that oversees insurance companies. The name of the insurance regulatory agency typically is "Department of Insurance", "Division of Insurance," "Insurance Bureau" or something similar. This agency is headed by a state government official usually called the "Commissioner of Insurance", "Director of Insurance", or a similar title. The Commissioner of Insurance is an elected official in some states and in other states is appointed by the Governor. A primary function of each state's Department of Insurance is to assure that insurance companies operating in the state are financially sound, so that the company will have the financial ability to meet its obligations to pay claims. Insurance companies are required to meet certain financial requirements and are required to demonstrate periodically (at least annually) to a state's Department of Insurance that they continue to meet or exceed the minimum financial requirements in order to continue to conduct business in the state. The Department of Insurance can take various actions against an insurance company that fails to conduct its business in a financially sound manner, including action to cause the company to cease operation in the state.Most states have laws regulating the conduct of insurance business to ensure fairness in the way companies deal with applicants for insurance and policyholders. One of the functions of a Department of Insurance is to enforce these so-called "unfair trade practices" and "unfair claims practices" laws by investigating complaints by consumers and taking action, when appropriate, to get companies to stop conduct that violates the laws and impose penalties for violations. Other duties of a Department of Insurance include reviewing and approving the policy forms used by insurance companies and approving rates charged for various types of insurance to assure compliance with state laws that regulate insurance rates.
Why do I need automobile insurance?
Your automobile is a valuable asset which could be very expensive to repair or replace if is damaged. Part of what auto insurance does is to pay for the repair or replacement of a vehicle which is damaged either as a result of your driving or from other causes not related to driving, such as theft or storm damage. Without insurance, many people would be unable to replace vehicles that are stolen or become severely damaged. Auto insurance also covers your legal liability which could arise if you injure another person or damage another person's property with your vehicle. Depending on the extent of the damage or injury caused, the potential amount for which you could become liable is far in excess of the value of your automobile, perhaps in the hundreds of thousands of dollars or more. Auto liability insurance pays the damage for which you become liable, up to the dollar amount of liability coverage that you purchased. Without auto liability insurance, all of your personal assets could be at risk.If you are sued based on operation of your vehicle, auto insurance also pays for the cost of your defense. Defending a lawsuit in court can be very expensive, even if ultimately you are found not to be legally responsible for any damages.
Are there any limitations on what an insurance company can charge for insurance?
For each type of policy, insurance companies have a range of premium levels that may be charged based on various factors that are considered at the time an application is submitted. For example, the premium for an auto insurance policy will vary depending on the applicant's driving habits, such as number of miles driven and whether the auto is used for business, the age and model of the vehicle, and whether the applicant has recently been convicted of a traffic violation. The premium for a life insurance policy will vary depending on the applicant's age and health condition. Rating factors must be reasonably related to the risk being insured, and state law often limits the specific rating factors that may be considered for certain types of insurance.The rates and rating factors for most types of insurance must be filed with the insurance regulatory agency for each state where the insurance is to be sold. In some states and for some types of insurance, the rates must get regulatory approval before they can be used.
What should I know about auto insurance?
Some people think of it in terms of "us versus them." Some of us have lives and property worth protecting and believe that there are people who have nothing, will never amount to anything and will take advantage of us anytime they can. Those of us who care purchase insurance for what we have to protect and keep it. In our modern society, the orderly transfer of risk between the members of our society is accomplished through insurance. In exchange for a known loss (payment of an insurance premium), the risk of a large catastrophic loss (payment of thousands of dollars for damage to property) is transferred to the insurance company through the insurance policy. In auto insurance, there is first party coverage and third party coverage. First party coverage covers you and your property (such as medical expenses, damage to your vehicle and the insurance company's duty to defend you in the event that you are sued as the result of your operation of a vehicle, etc.). Third party coverage is for your responsibility to pay for injury caused to other people, whether in your vehicle, or another vehicle involved in the accident. The coverage (and its exclusions) is set forth in your insurance policy. In exchange for the payment of a premium, the insurance company promises to provide compensation in the event of certain occurrences. You can speak to an insurance representative to find our more about the options available to you, and their costs.. Before purchasing auto insurance, it is a good idea to shop around and buy the coverage that best suits your needs at the most reasonable price. You may wish to consider factors such as customer service, claims paying ability, claims payment record, general reputation and independent rating organization's ranking. In determining what Liability Limits you should purchase, you need to consider the amount of exposure that you have. As a general rule, the more property and wealth you own, the greater your exposure is, and the greater the need for protection against claims from third parties. Often, liability limits are set as a combination of numbers, such as 15/30, which means coverage of loss of up to $15,000 per person and up to $30,000 for all injuries which occur in a single accident. Many states require a minimum amount of third party liability insurance be purchased before a you may drive a vehicle on public roads. This is referred to as the minimum liability limit. Often the minimum liability limit is inadequate to protect all of your property and wealth. Increased limits, such as 100/300 or 300/500 are very common and can be purchased at modest addition cost to you.Your vehicle itself can be covered in several different ways. Comprehensive coverage provides coverage for loss to your vehicle due to certain proximate causes (such as fire, theft, vandalism, and acts of nature). Collision covers damage to your vehicle in the event that it collides with another vehicle of object, often regardless of who is at fault in the event of an accident. Both comprehensive and collision coverage may be subject to a deductible, that is, damage to the vehicle must exceed the deductible amount before the insurance company will pay you for a covered loss. Deductibles for this coverage are available is various amounts, generally the greater the deductible, the lower the premium for the coverage.
Are there any options for resolving a dispute with my insurance company other than suing the company in court?
Arbitration?Some insurance policies contain a provision allowing or requiring arbitration of certain disputes between the insurance company and the insured, and this may include disputes regarding certain types of claims. "Arbitration" is a procedure for resolving disputes by use of neutral, private individuals ('arbitrators") as an alternative to a lawsuit, and it often is a cheaper and faster method of resolving contract disputes as compared with a court proceeding. This procedure usually is not available unless specifically stated in the policy or unless the insurance company and policyholder mutually agree to submit their dispute to arbitration. See also our section on Arbitration.
Lawsuit for breach of contract
An insurance policy is a contract between the insurer and the insured. If the insurance company fails or refuses to pay a claim which should be paid under the terms of the policy, it is in breach of the contract, and the insured can pursue all available legal remedies for the breach. This usually involves filing a lawsuit against the insurance company. If successful, the insured will be able to recover its damages, which at least will equal the amount the insurer should have paid under the terms of the policy. Depending on state law and the circumstances of a specific case, damages may also include other expenses that were incurred because of the breach as well as costs of the lawsuit.
Lawsuit for "bad faith"
All insurance policies contain an implied obligation applicable to the insurance company of "good faith and fair dealing" towards its insured. When a claim is presented, this implied obligation means that an insurance company can not simply look for reasons not to pay. Instead, the company must make a thorough investigation of the claim, must consider all reasons and circumstances that might support the claim, and must give as much consideration to the financial interest of the insured as it gives to its own financial interest.If an insurance company refuses to pay a claim that should be paid or offers to settle a claim for less than it knows the claim is worth or denies a claim without adequate investigation, this could give rise to a so-called "bad faith" claim against the insurance company, i.e., a claim that the company has breached its implied obligation of good faith and fair dealing. If the company is found to have acted in bad faith in its handling of a claim, the insured is entitled to all damages resulting from that action, including certain types of damages that would not be available just for breach of contract. In cases of extreme or outrageous misconduct by an insurance company, the insured also may be entitled to receive punitive damages.
Complaint to department of insurance
The insurance regulatory agencies of most states (usually called the "Department of Insurance" or similar name) have established procedures whereby consumers who believe they have been subjected to unfair claims handling can file a complaint against the offending insurance company. The complaint will be investigated to determine if the company acted properly and in a manner consistent with the state's insurance laws, including the "Unfair Claims Practices" laws. In some cases, the investigation may cause an insurance company to reevaluate its handling and disposition of a claim. If a company is found to be in violation of the law, this process also may result in a fine or other penalty being imposed on the company by the Department of Insurance.
Can an insurance company cancel my policy for any reason it chooses?
Once a policy is issued, the insurance company except for reasons specifically stated in the policy can not cancel it, and state laws usually limit what a company can include in the "cancellation" provisions of its policies. Typically, policies will be subject to cancellation only for failure to make required premium payments or for some type of serious misrepresentation or fraud by the policyholder.Most property and liability policies are issued for a stated policy "term", such as six months or one year. The limitation on cancellation mentioned above applies only during the policy term. Insurance companies usually can decide to discontinue or "non-renew" these policies at the end of the term for any reason except a reason that would be prohibited by law (also, in a few states an insurance company may not refuse to renew certain types of personal insurance). In most states, an insurance company must give the policyholder a written notice at least 30 days prior to the end of the policy term if it intends to non-renew a personal auto or homeowner's policy.
If I miss a premium payment and get a cancellation notice, is there anything I can do to be able to keep the policy?
For property and liability insurance, a cancellation notice usually must be sent to the policyholder several days prior to the effective date of cancellation. The notice period will be stated in the policy, and for personal auto, homeowners and sometimes other types of insurance, state law usually requires at least 10 days advance written notice. If you make your payment before the cancellation date, you will be able to retain your coverage. For life, health and other disability insurance, state law often requires insurers to allow a "grace period" of as much as 30 days after a premium payment is due before coverage can be terminated. If payment is not made within the grace period, however, these types of coverage usually will terminate retroactively to the date the premium payment was due without any further cancellation notice from the company.If your coverage terminates or is canceled because you missed a premium payment, some insurance companies may agree to "reinstate" your coverage if you make all past due payments and you certify that you are not aware of any losses that have occurred since the cancellation date. Reinstatement is discretionary by the insurance company. The law usually does not require that policies be reinstated once they have been legally canceled.
Can I cancel my policy at any time and will there be a penalty?
As a general rule, a policyholder may elect to cancel an insurance policy at any time by giving notice to the insurance company. In some cases you may be required to return the original policy or sign a "policy release", and of course you will be responsible for any premium earned through the date of cancellation. Sometimes there are financial penalties for early cancellation by the policyholder. Most property and liability policies require what is called a "short rate" penalty when a policyholder requests cancellation, which means that the company retains a disproportionate amount of the premium. For example, if you have a one year policy and you request cancellation after six months, the "short rate" penalty would allow the company to retain more than one-half of the annual premium. Also, many types of life insurance policies and annuities impose "surrender charges" if they are canceled before they have been in effect a certain number of years. A policy must clearly describe any applicable cancellation penalties or surrender charges. Once a policy is issued, the insurance company except for reasons specifically stated in the policy can not cancel it, and state laws usually limit what a company can include in the "cancellation" provisions of its policies. Typically, policies will be subject to cancellation only for failure to make required premium payments or for some type of serious misrepresentation or fraud by the policyholder.Most property and liability policies are issued for a stated policy "term", such as six months or one year. The limitation on cancellation mentioned above applies only during the policy term. Insurance companies usually can decide to discontinue or "non-renew" these policies at the end of the term for any reason except a reason that would be prohibited by law (also, in a few states an insurance company may not refuse to renew certain types of personal insurance). In most states, an insurance company must give the policyholder a written notice at least 30 days prior to the end of the policy term if it intends to non-renew a personal auto or homeowner's policy.
If I own a car, do I have to buy insurance?
Most states require auto insurance. Technically, you prove your financial ability to pay a specified level of damages when registering a vehicle or renewing license plates. The only way for most people to satisfy this requirement is to have car insurancefor the minimum amount of coverage.If you have a car loan or if you lease your vehicle, the loan company or leasing company will also require that you have insurance. You name the company as a "loss payee" on your policy. If the vehicle is damaged, any insurance payment will go to the company, and it uses the money to either to repair the vehicle or pay off the loan balance.
What is a "financial responsibility" law?
A "financial responsibility" law requires you to prove your financial ability to pay for damages at the time you are involved in an accident or are convicted of a traffic violation. This type of law does not require that you have insurance or other proof of financial responsibility at the time of vehicle registration. However, failure to demonstrate the required level of financial responsibility at the time of an accident or traffic violation can result in suspension of your driver's license or revocation of your vehicle registration. Under these laws, the requirement to demonstrate financial responsibility is not based on fault. All parties involved in an accident must show the necessary proof or face the penalties imposed by the law. Maintaining an automobile insurance policy is the most common way to comply with a financial responsibility law.
Are there legal limitations on insurance company business practices?
State insurance laws impose many requirements and limitations on the way insurance companies conduct their marketing, underwriting (determining which policyholders or risks to accept or reject for coverage) and rate making activities. In some instances, these laws also limit an insurance company's ability to cancel or discontinue coverage once a policy has been issued. In general, there are many restrictions and limitations applicable to personal or "consumer" insurance, such as personal auto, homeowners and individual or small group health insurance. There usually are fewer restrictions applicable to business and commercial insurance. The specific requirements and limitations often vary a great deal from state to state.
What happens when there is a claim?
Payment of claims is the reason that insurance exists, yet policyholders often perceive that insurance companies resist paying legitimate claims make the claims process unduly difficult. Both insurance companies and policyholders have contractual obligations which must be understood and performed to ensure the timely and satisfactory resolution of claims.
If I am sued, does my insurance company defend me in court?
When you buy liability insurance, part of the insurance company's obligation is to provide a defense for you if you are sued. The insurance company will do this by hiring and paying for an experienced attorney to represent you in court. Even though the insurance company selects the lawyer and must approve the payment of all legal fees and other expenses of the lawsuit, the lawyer represents you.
Can an insurance company refuse to sell me insurance for any reason it chooses?
It is illegal to refuse to sell insurance to someone because of the person's race, color, sex, religion, national origin or ancestry. In many states this list of "prohibited classifications" also may include (subject to various limits to change rates, marital status, age, occupation, language, sexual orientation, physical or mental impairment, or the geographic location where a person lives. Beyond the prohibited classifications, insurance underwriting decisions generally must be based on reasons that are related in some way to the risk to be insured. In most states an individual has a legal right to be informed of the reasons for any refusal to issue an insurance policy.
What is a "reservation of rights" letter?
If you are sued, the legal complaint filed against you may state several different claims, some of which may be covered by your liability insurance policy and some of which may not be covered. The insurance company is obligated to provide a defense for you if any of the claims could be covered, but the company may not be obligated to pay the damages for certain types of claims. A "Reservation of Rights" letter from your insurer is a notice that even though the company is proceeding to handle your claim, depending on what happens, certain losses might not be covered by the terms of the policy. By such a letter, the company preserves or "reserves" its right to deny coverage at a later date based on the terms of the policy.Liability policies, for instance, typically do not provide coverage for damages which you cause intentionally. If you injure someone under circumstances where the injury could have been accidental or could have been intentional, the legal complaint might allege both that your action was "negligent" and that your action was "intentional." In court, the party suing you will have to prove it was one or the other. In such a case, your insurance company may write a letter saying it will provide you a defense but it will not pay damages if the court finds you caused the injury intentionally. This is an example of a "Reservation of Rights" letter.
Lawsuit for breach of contract
An insurance policy is a contract between the insurer and the insured. If the insurance company fails or refuses to pay a claim which should be paid under the terms of the policy, it is in breach of the contract, and the insured can pursue all available legal remedies for the breach. This usually involves filing a lawsuit against the insurance company. If successful, the insured will be able to recover its damages, which at least will equal the amount the insurer should have paid under the terms of the policy. Depending on state law and the circumstances of a specific case, damages may also include other expenses that were incurred because of the breach as well as costs of the lawsuit.
What happens if I'm sued for causing a car accident and I don't have insurance?
You need to personally arrange for the defense of any lawsuits against you. This usually involves hiring an experienced car accident attorney, who can advise and defend you in court. You will have to pay the attorney's fees and other court related costs, even if you ultimately are found not to be legally responsible for the accident.If you are found to be liable for damages, a judgment will be entered against you by the court for a specific sum of money. If the injuries are severe or the damage extreme, the judgment could be a very large sum of money, potentially hundreds of thousands of dollars. If you fail to pay or are unable to pay the full amount of the judgment, the winning party may sue to collect from you. If you don't have car insurance, now is the time to protect yourself and buy an auto insurance policy.
When may an insurance company cancel my auto insurance during the term of my policy?
An insurance company may cancel a new policy any time within the first 60 days and are not required to provide you with a reason for the cancellation. A cancellation is also permitted during the terms of the policy if the premium is not paid when it is due, discovery of fraud or material misrepresentation made by you or your representative in obtaining your insurance, or by your pursuit of a fraudulent claim under your policy, or significant changes in insuring characteristics. For the situations discussed above, no cancellation is effective until at least 10 days after the insurance company mails or delivers to you a written notice of cancellation.
When may an insurance company nonrenew my auto insurance policy?
Nonrenewal refers to the termination of a policy at the expiration date. If an insurance company decides it does not want to renew your policy, it must mail or deliver to you a nonrenewal notice at least 60 days before the policy's expiration date.
Does my auto insurance policy have a grace period?
Unlike health insurance policies, auto insurance policies, do not have a required grace period. The premium is due, at the insurance company, on the date identified on the premium notice. If the premium is not received by that date the policy automatically terminates.
Can credit history be used as a reason to nonrenew or refusal to renew my car insurance?
Insurers may use credit information as one of the criteria they consider when underwriting personal lines insurance. However, it is the position of the Wisconsin Insurance Commissioner's Office that insurers should not use credit information, whether they use credit reports or credit scoring mechanisms, as the sole reason to refuse an application, cancel a new insurance policy in its first 60 days of coverage, or nonrenew an existing policy.
What affects the price of auto insurance?
When determining the rate for an auto insurance policy, insurers separate drivers into categories called classifications. Drivers are classified based on a number of different characteristics including, but not limited to, age and gender, marital status, where the vehicle is garaged, driving record, make and model of vehicle, prior insurance coverage and annual miles driven. History has shown that drivers with certain characteristics, such as a poor driving record, have a greater chance of being involved in an accident, and the drivers in those classifications must pay higher rates. While some of the classification criteria (such as age and sex) are out of your control, others, such as driving record and type of vehicle driven, are within your control.
Can the driving/accident records of my child and/or spouse have an impact on my ability to buy auto insurance?
Yes, the driving record of any licensed driver in the household will affect the decision of the insurance company to insure your vehicle(s). It can cause you to be turned down for insurance coverage or to pay higher insurance premiums.
Is there a way I can reduce my premiums?
Every auto insurer has its own package of special discounts to attract particular types of customers. Most insurance companies provide discounts for at least some of the following: accident-free drivers discount; a package discount for insuring your home and auto with the same company; multiple auto discount; good student discount; nonsmokers discount; and passive restraint discount (for vehicles with air bags or automatic seat belts). You may also consider higher deductibles for your comprehensive and collision coverages.
Can I require the insurance company to replace my car?
The personal auto policy is not a replacement policy. Coverage for your car is based on actual cash value. The actual cash value (ACV) of your car is based on the value of your car at the time of the accident, taking into account its current market value. Therefore, the insurance company's obligation is to repair the car based upon its actual cash value not its replacement cost.
What is meant by aftermarket parts?
Auto repair shops may use aftermarket and/or used parts when repairing or replacing a damaged part (i.e., bumpers, bumper covers, and associated bumper parts, etc.). Aftermarket parts are produced by companies other than the original equipment manufacturers (known as OEM parts).Auto insurance contracts do not generally specify what parts will be used. You may request that aftermarket parts not be used to repair your vehicle, but you are responsible for any repair costs that exceed the final claim settlement negotiated with the insurance company.
The other driver's insurance company wants me to sign a release on my injury claim. How long can I delay this?
Sign the release when you are satisfied with your total settlement. Get a letter from your doctor estimating the cost and length of your future medical treatment. You may, of course, consult an attorney before accepting a settlement. You have three years after the accident, under Wisconsin law, to either settle your claim or file a lawsuit.
What does comprehensive coverage provide?
Comprehensive (also called other than collision) coverage pays for damage to your vehicle resulting from fire, vandalism, water, hail, glass breakage, wind, falling objects, civic commotion, or hitting a bird or an animal. Damage from striking a deer is a relatively frequent accident in Wisconsin. It is important to know that most policies cover hitting an animal under comprehensive, not collision, insurance.Comprehensive coverage also pays if your vehicle or parts of it, such as a battery or tires, are stolen. Flood damage to your car is also covered if your auto insurance policy includes comprehensive coverage. If you carry collision without comprehensive, you are not covered for flood damage.
How is the deductible for comprehensive or collision coverage applied?
Deductibles for comprehensive or collision coverage are applied for each occurrence. A deductible is the dollar amount that you have to pay toward the loss before the insurance company begins to make payments on the loss. For example if you suffered a comprehensive loss (a deer hit) and that same day suffered a collision loss (a rock hit your windshield), your policy allows the insurer to apply two different deductibles. Many companies will waive the deductible for the windshield occurrence if you can repair it rather than replace it.
If I have my car financed, do I need to purchase auto insurance?
If you do finance the car, the financial institution (lender) will require that you have car insurance. The terms of your loan will most likely require you to provide comprehensive and collision insurance. This is because the lender considers your vehicle collateral for the loan. If your policy lapses, the bank will force coverage (obtain a policy) and add it to your loan. Forced coverage provides protection to the bank, not you, for their interest in the car and nothing else. The cost of this insurance is much higher than you would pay if you bought your own policy through a standard carrier.
Auto Insurance Coverage - How much coverage should I buy?
Given the cost of medical car, and the state of our legal system, I think it makes sense to up your coverage. The minimum is pretty much a joke, and won't cover anyone's serious injuries. Let alone if they sue you for pain and suffering. Besides, if they win a judgement, they can attach your wages, and prevent you from ever buying a home. You should do this anyway, because it's the right thing to do. Besides, the person you may end up covering may be a friend or relative riding in your car as a passenger. Don't let the asset calculation deter you. I've had at least 100/300 liability ever since I could afford it. Last year I bumped it up to the max, which I believe was 300/600.
The company wants to repair my car with non-factory parts. Can they do this?
Yes. The parts used do not necessarily have to be original equipment manufacturer (OEM) parts, but should be of like kind and quality as the parts being replaced. Ask your company about what guarantees will be given on these parts. Florida law requires the parts to be of same fit, quality and performance.
The company is refusing to pay for a CB radio that was stolen from my automobile. Can they do this?
Most companies exclude electronic equipment, such as CB radios, cellular telephones, compact disc changers, etc., unless they are factory- installed. You should review your policy and its exclusions to determine if your CB is covered. If CB radios are excluded and it was not specifically endorsed onto your policy, then there would be no coverage.
Can a company refuse to renew your policy based on the number of accidents made in the last three years?
An insurance company may non-renew your policy if you have more than one at-fault accident. If you have three or more accidents, regardless of who is at fault, the company may non-renew your policy.Please note, a company may non-renew for claims activity, regardless of accidents.