Frequently Asked Questions on Auto Insurance

1) ARE THERE ANY SPECIFIC TIME LIMITS FOR AN INSURANCE COMPANY TO PAY FOR COLLISION OR COMPREHENSIVE CLAIMS?

There are no specific time limits for the settlement of claims. Insurance companies are required by law to pay all claims in a prompt and reasonable amount of time. However, what constitutes "prompt and reasonable" may vary from claim to claim. Claims that require special or extended investigation may take longer to resolve. Inclement weather conditions often cause an increase in the number of claims filed and that can delay the process as well. If, however, the insurance company fails to pay a comprehensive or collision claim within seven days after it receives an official claim form stating that the vehicle has been repaired, the insured may sue for the payments claimed to be due.

2) MY AUTO WAS DECLARED A TOTAL LOSS FOLLOWING AN ACCIDENT. IS MY COMPANY REQUIRED TO GIVE ME THE REPLACEMENT COST?

When your auto is declared a total loss, your insurance company will pay you only the actual cash value of the auto as of the date of the loss, not the cost to replace it. Your auto's value is determined by the following factors: the retail value for an auto of like kind and quality prior to the accident; the price paid for the auto plus the value of prior improvements to the auto at the time of the accident; the decrease in value of the auto resulting from prior unrelated damage which is detected by the appraiser or for which a claim has been paid; and the actual purchase cost of an available auto of like kind and quality.
If your auto has substantial value because of its exceptional condition such as an antique, classic, or restored auto, you should have it appraised and then insure it for the appraised value.

3) DO I HAVE TO PAY AN INSURANCE PREMIUM AFTER MY AUTO IS DECLARED A TOTAL LOSS?

Yes, you must pay an insurance premium even if your auto is declared a total loss until such time that you return your license plates to the Registry of Motor Vehicles. Your auto policy terminates when you return the license plates to the Registry of Motor Vehicles. If you don't have your license plates because your auto was stolen or because your auto and plates were destroyed in a fire, you must go to the nearest Registry of Motor Vehicles office and obtain a lost or stolen plates receipt. This receipt must be presented to your insurance company in order to cancel your policy and avoid paying any additional premium.

4) MAY I KEEP MY AUTO IF I HAVE A COLLISION, LIMITED COLLISION OR COMPREHENSIVE CLAIM AND MY INSURANCE COMPANY DECLARES IT A TOTAL LOSS?

4) MAY I KEEP MY AUTO IF I HAVE A COLLISION, LIMITED COLLISION OR COMPREHENSIVE CLAIM AND MY INSURANCE COMPANY DECLARES IT A TOTAL LOSS?Your insurance company has the option to take title to your auto when it issues payment on your claim. The insurer is entitled to any salvage value your auto may have. You can, of course, negotiate with your company to purchase your auto for the agreed salvaged value.

5) THE BODY SHOP IS REPAIRING MY AUTO AFTER AN INSURED LOSS. WILL MY INSURANCE COMPANY PAY FOR ORIGINAL EQUIPMENT MANUFACTURER (OEM) PARTS?

If the repair of the damaged part impairs the operational safety of the auto, the insurance company will pay to replace it with an OEM part. For non-safety parts, unless your claim occurs during the first 20,000 miles on the auto's odometer, you are not entitled to OEM parts. For autos with more than 20,000 miles, state regulation allows for the replacement of damaged parts with used, reconditioned or after market parts. You can insist on OEM parts, but you will have to pay the difference in cost.

6) AN OBJECT DAMAGED MY WINDSHIELD AND I AM UNABLE TO DETERMINE WHERE IT CAME FROM. AM I COVERED FOR THIS LOSS?

Yes, if you have comprehensive insurance you are covered for the full amount of the loss, unless you opted for a $100 deductible for glass breakage. The $300, $500, or $1000 deductible, or whatever you may have selected for comprehensive coverage, does not apply to a glass loss.

7) CAN MY INSURANCE COMPANY DENY A CLAIM FOR DAMAGES TO MY AUTO IF THE PRINCIPAL PLACE OF GARAGING LISTED ON MY APPLICATION IS FALSE?

Yes. If you or someone on your behalf gives false, deceptive, misleading or incomplete information on any application and if such information increases the insurance company's risk of loss, your company may then refuse to pay claims under any or all of the Optional Insurance coverages of the policy. Such information includes the description and place of garaging of the vehicles to be insured, the names of the operators required to be listed and the answers given for all listed operators. In the event that you have moved since you filled out your initial application, promptly notify your insurance company and the Registry of Motor Vehicles of your new address.

8) IS MY INSURANCE COMPANY REQUIRED TO NOTIFY ME OF ITS DECISION TO CANCEL MY POLICY?

Yes. Your company must send you a notice at least 20 days prior to the effective date of the cancellation. A notice sent by regular mail with a certificate of mailing receipt obtained from the Post Office is considered sufficient. Certified or registered mail with a return receipt is no longer required.

9) WHAT CAN I DO IF I ACTUALLY RECEIVE A CANCELLATION NOTICE?

If your policy is being cancelled because you have failed to pay your premium, you must pay your exact outstanding premium immediately to prevent cancellation. If you feel that the cancellation is unjust for any reason, you may submit a written appeal to the Board of Appeals at One South Station, Boston, MA 02110-2208. This must be done prior to the effective date of cancellation.

10) WHO IS LIABLE FOR THE STORAGE CHARGES ON MY DAMAGED AUTO WHEN THERE IS A DISPUTE AS TO THE AMOUNT OF THE CLAIM PAYMENT?

The insurance company is responsible for paying storage charges until it makes a reasonable offer to settle the claim. However, if the consumer disputes the amount offered and the company revises its offer, this does not necessarily mean that the original offer was unreasonable. Disputes over what is reasonable can be resolved with your company through the process described in your insurance policy. You can also submit a written complaint to the Division of Insurance if you are unable to settle the dispute.

11) MAY AN INSURANCE COMPANY REQUEST A DOWN PAYMENT IN ADVANCE WHEN I PURCHASE OR RENEW AN AUTO INSURANCE POLICY? AND IS IT POSSIBLE TO PAY MY PREMIUM MONTHLY?

Your insurance company may request up to a 30 percent down payment of the annual premium prior to the renewal or issuance of your policy. Many companies offer an installment payment plan for the balance of the premium. You should check with your agent or company to see what options are available to you.

12) IF I OWN AN AUTO WITH COLLISION AND COMPREHENSIVE COVERAGE, WILL MY INSURANCE APPLY TO A RENTAL OR BORROWED PRIVATE PASSENGER AUTO?

Yes. Your collision and comprehensive insurance coverages are transferable to a substitute rented or borrowed private passenger auto that is damaged while it is being operated by you or members of your household with the consent of the owner. There is no coverage under your policy for family friends or significant others. You should be aware that your coverage is available only if you rent or borrow a private passenger auto in the United States or Canada. You should also be aware that your policy does not provide coverage for a borrowed or rented truck. If you are renting a truck, you should check with the rental company regarding the purchase of collision and comprehensive insurance. If you are borrowing a truck, make sure you determine whether or not the owner has purchased collision or comprehensive coverage. If the owner does not have insurance, you may be personally liable for any damage to that truck which is the result of your negligent operation. If the use is for business rather than pleasure, call your agent first. Business use is usually not covered under your personal auto insurance policy.

13) HOW DO I GO ABOUT SWITCHING INSURANCE COMPANIES PRIOR TO THE END OF MY POLICY WITHOUT PAYING A PENALTY?

Once you receive an invoice reflecting new (not estimated) rates and any applicable new deviations or discounts, you have 30 days to change insurance companies without paying a "short rate" penalty. If you make a change within this 30 day period, you will pay your former insurance company on a pro-rata basis at its newly established rates until the date the coverage with your new insurance company begins. If you choose to switch insurance companies after the 30 day period, you may be subject to a short rate penalty which decreases as your policy year progresses depending on the insurance company to which you transferred your coverage. You should ask your new insurance company whether it will reimburse you for these penalties.

Frequently Asked Questions on Auto Insurance

1) ARE THERE ANY SPECIFIC TIME LIMITS FOR AN INSURANCE COMPANY TO PAY FOR COLLISION OR COMPREHENSIVE CLAIMS?

There are no specific time limits for the settlement of claims. Insurance companies are required by law to pay all claims in a prompt and reasonable amount of time. However, what constitutes "prompt and reasonable" may vary from claim to claim. Claims that require special or extended investigation may take longer to resolve. Inclement weather conditions often cause an increase in the number of claims filed and that can delay the process as well. If, however, the insurance company fails to pay a comprehensive or collision claim within seven days after it receives an official claim form stating that the vehicle has been repaired, the insured may sue for the payments claimed to be due.

2) MY AUTO WAS DECLARED A TOTAL LOSS FOLLOWING AN ACCIDENT. IS MY COMPANY REQUIRED TO GIVE ME THE REPLACEMENT COST?

When your auto is declared a total loss, your insurance company will pay you only the actual cash value of the auto as of the date of the loss, not the cost to replace it. Your auto's value is determined by the following factors: the retail value for an auto of like kind and quality prior to the accident; the price paid for the auto plus the value of prior improvements to the auto at the time of the accident; the decrease in value of the auto resulting from prior unrelated damage which is detected by the appraiser or for which a claim has been paid; and the actual purchase cost of an available auto of like kind and quality.
If your auto has substantial value because of its exceptional condition such as an antique, classic, or restored auto, you should have it appraised and then insure it for the appraised value.

3) DO I HAVE TO PAY AN INSURANCE PREMIUM AFTER MY AUTO IS DECLARED A TOTAL LOSS?

Yes, you must pay an insurance premium even if your auto is declared a total loss until such time that you return your license plates to the Registry of Motor Vehicles. Your auto policy terminates when you return the license plates to the Registry of Motor Vehicles. If you don't have your license plates because your auto was stolen or because your auto and plates were destroyed in a fire, you must go to the nearest Registry of Motor Vehicles office and obtain a lost or stolen plates receipt. This receipt must be presented to your insurance company in order to cancel your policy and avoid paying any additional premium.

4) MAY I KEEP MY AUTO IF I HAVE A COLLISION, LIMITED COLLISION OR COMPREHENSIVE CLAIM AND MY INSURANCE COMPANY DECLARES IT A TOTAL LOSS?

4) MAY I KEEP MY AUTO IF I HAVE A COLLISION, LIMITED COLLISION OR COMPREHENSIVE CLAIM AND MY INSURANCE COMPANY DECLARES IT A TOTAL LOSS?Your insurance company has the option to take title to your auto when it issues payment on your claim. The insurer is entitled to any salvage value your auto may have. You can, of course, negotiate with your company to purchase your auto for the agreed salvaged value.

5) THE BODY SHOP IS REPAIRING MY AUTO AFTER AN INSURED LOSS. WILL MY INSURANCE COMPANY PAY FOR ORIGINAL EQUIPMENT MANUFACTURER (OEM) PARTS?

If the repair of the damaged part impairs the operational safety of the auto, the insurance company will pay to replace it with an OEM part. For non-safety parts, unless your claim occurs during the first 20,000 miles on the auto's odometer, you are not entitled to OEM parts. For autos with more than 20,000 miles, state regulation allows for the replacement of damaged parts with used, reconditioned or after market parts. You can insist on OEM parts, but you will have to pay the difference in cost.

6) AN OBJECT DAMAGED MY WINDSHIELD AND I AM UNABLE TO DETERMINE WHERE IT CAME FROM. AM I COVERED FOR THIS LOSS?

Yes, if you have comprehensive insurance you are covered for the full amount of the loss, unless you opted for a $100 deductible for glass breakage. The $300, $500, or $1000 deductible, or whatever you may have selected for comprehensive coverage, does not apply to a glass loss.

7) CAN MY INSURANCE COMPANY DENY A CLAIM FOR DAMAGES TO MY AUTO IF THE PRINCIPAL PLACE OF GARAGING LISTED ON MY APPLICATION IS FALSE?

Yes. If you or someone on your behalf gives false, deceptive, misleading or incomplete information on any application and if such information increases the insurance company's risk of loss, your company may then refuse to pay claims under any or all of the Optional Insurance coverages of the policy. Such information includes the description and place of garaging of the vehicles to be insured, the names of the operators required to be listed and the answers given for all listed operators. In the event that you have moved since you filled out your initial application, promptly notify your insurance company and the Registry of Motor Vehicles of your new address.

8) IS MY INSURANCE COMPANY REQUIRED TO NOTIFY ME OF ITS DECISION TO CANCEL MY POLICY?

Yes. Your company must send you a notice at least 20 days prior to the effective date of the cancellation. A notice sent by regular mail with a certificate of mailing receipt obtained from the Post Office is considered sufficient. Certified or registered mail with a return receipt is no longer required.

9) WHAT CAN I DO IF I ACTUALLY RECEIVE A CANCELLATION NOTICE?

If your policy is being cancelled because you have failed to pay your premium, you must pay your exact outstanding premium immediately to prevent cancellation. If you feel that the cancellation is unjust for any reason, you may submit a written appeal to the Board of Appeals at One South Station, Boston, MA 02110-2208. This must be done prior to the effective date of cancellation.

10) WHO IS LIABLE FOR THE STORAGE CHARGES ON MY DAMAGED AUTO WHEN THERE IS A DISPUTE AS TO THE AMOUNT OF THE CLAIM PAYMENT?

The insurance company is responsible for paying storage charges until it makes a reasonable offer to settle the claim. However, if the consumer disputes the amount offered and the company revises its offer, this does not necessarily mean that the original offer was unreasonable. Disputes over what is reasonable can be resolved with your company through the process described in your insurance policy. You can also submit a written complaint to the Division of Insurance if you are unable to settle the dispute.

11) MAY AN INSURANCE COMPANY REQUEST A DOWN PAYMENT IN ADVANCE WHEN I PURCHASE OR RENEW AN AUTO INSURANCE POLICY? AND IS IT POSSIBLE TO PAY MY PREMIUM MONTHLY?

Your insurance company may request up to a 30 percent down payment of the annual premium prior to the renewal or issuance of your policy. Many companies offer an installment payment plan for the balance of the premium. You should check with your agent or company to see what options are available to you.

12) IF I OWN AN AUTO WITH COLLISION AND COMPREHENSIVE COVERAGE, WILL MY INSURANCE APPLY TO A RENTAL OR BORROWED PRIVATE PASSENGER AUTO?

Yes. Your collision and comprehensive insurance coverages are transferable to a substitute rented or borrowed private passenger auto that is damaged while it is being operated by you or members of your household with the consent of the owner. There is no coverage under your policy for family friends or significant others. You should be aware that your coverage is available only if you rent or borrow a private passenger auto in the United States or Canada. You should also be aware that your policy does not provide coverage for a borrowed or rented truck. If you are renting a truck, you should check with the rental company regarding the purchase of collision and comprehensive insurance. If you are borrowing a truck, make sure you determine whether or not the owner has purchased collision or comprehensive coverage. If the owner does not have insurance, you may be personally liable for any damage to that truck which is the result of your negligent operation. If the use is for business rather than pleasure, call your agent first. Business use is usually not covered under your personal auto insurance policy.

13) HOW DO I GO ABOUT SWITCHING INSURANCE COMPANIES PRIOR TO THE END OF MY POLICY WITHOUT PAYING A PENALTY?

Once you receive an invoice reflecting new (not estimated) rates and any applicable new deviations or discounts, you have 30 days to change insurance companies without paying a "short rate" penalty. If you make a change within this 30 day period, you will pay your former insurance company on a pro-rata basis at its newly established rates until the date the coverage with your new insurance company begins. If you choose to switch insurance companies after the 30 day period, you may be subject to a short rate penalty which decreases as your policy year progresses depending on the insurance company to which you transferred your coverage. You should ask your new insurance company whether it will reimburse you for these penalties.

Great Car, Great Value, Great Performance

Pros: Great fuel economy, great ride, great value!
Cons: None

Months ago my daughter and I went looking for a new vehicle for her. We test drove both the Saturn Vue SUV and the Aura 4 door sedan. We liked both vehicles but she really wanted the Vue so she got that Saturn.

However, I really liked the Aura and thought it was a great value. So when they offered 0% interest for 72 months, I went and bought one as a third vehicle for my wife and me. The other two vehicles we have are a Dodge pick-up and a Jeep Wrangler. We like them both, but they are not great on gas mileage. So we wanted a third vehicle that got great gas mileage. Plus the insurance on the Dodge truck is high for some unknown reason to me or the insurance agent. By buying the Aura, making the truck a "pleasure" vehicle or whatever they call it, and the Aura my primary vehicle, we might actually owe about the same for insurance. The Saturns as found out from my daughter, have VERY LOW insurance rates due to the many safety features on their vehicles.

The ride of the Aura is smooth and it handles very well. The 4 cyc engine has excellent performance. I mean if it works great in my daughter's Vue which is 1500 lbs or so heavier, you have to imagine that it performs great in the Aura and it does.

The seats are also comfortable and the ride is also very quiet. We pretty much have the basic Aura and it came with everything we could imagine we needed.

The basic stereo system sounds incredible. I love XM and sat radio. Anyone who has driven through West Virginia searching for a conventional AM and FM station without success will appreciate XM radio. On-Star is also wonderful especially if you are a dad with kids and a wife you want to have On-Star enabled in the vehicle to help give you peace of mind.

I also noticed that the Aura is rated higher by consumers on the Consumer Report website over the Honda's and the Toyota's. Yes folks, GM has finally started producing great vehicles, great quality, and at a competitive price. Take one out for a test drive. You'll like it!

Auto insurers benefit as people drive less - Fewer fender benders take place as surging gas prices keep cars parked

SAN FRANCISCO (MarketWatch) -- Surging gas prices have been cruel to most financial-services firms this year, with investors fretting that borrowers have less money to repay debt.
But auto insurance, dominated by companies including Allstate Corp. (ALL:The Allstate Corporation
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Last: 45.34-0.83-1.80%

4:05pm 07/24/2008

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ALL 45.34, -0.83, -1.8%) and Progressive Corp. (PGR:The Progressive Corporation
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4:01pm 07/24/2008

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PGR 19.59, -0.43, -2.1%) , may be one of the few financial-services sectors to benefit.
Americans drove 1.4 billion fewer miles on the highway in April compared with a year ago, according to the U.S. Transportation Department. In March, people drove roughly 4.3% fewer miles than they did a year before. That was the biggest yearly drop since the department's Federal Highway Administration started keeping records in 1942.
As Americans drive less, the number of car accidents may be falling, limiting the frequency of auto-insurance claims.
Allstate, one of the largest auto insurers in the United States, said late Wednesday that the frequency of claims involving damage to cars and other property fell 4.2% in the second quarter. The frequency of claims involving injuries dropped 7.6% in the period compared with a year earlier.
If such a trend becomes strong enough, auto-insurance premiums may be pressured.
"If gas prices remain high and economic activity slows further, we believe that improved auto-loss trends will continue in the future, leading to stronger underwriting profitability, and therefore multiple expansion for auto-insurance stocks," Bijan Moazami, an analyst at Friedman, Billings, Ramsey, wrote in a note Thursday.
Allstate shares have dropped roughly 12% so far this year, partly because the company has large investment exposures to mortgage-related securities that have slumped in value as the housing crisis deepens. See story on Allstate's quarterly results.
However, that's much better than the 27% slump in the S&P Insurance index in 2008.
Progressive shares are up more than 4% this year. Shares of Mercury General Corp. (MCY:mercury genl corp new com
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MCY 48.87, -0.50, -1.0%) , another auto insurer, are down less than 1% so far in 2008, while rival State Auto Financial Corp. (STFC:State Auto Financial Corp
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Last: 27.05+2.21+8.90%

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STFC 27.05, +2.21, +8.9%) is up 0.4%.
Travelers Group (TRV:travelers companies inc com
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4:02pm 07/24/2008

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TRV 42.88, -2.72, -6.0%) reported modestly favorable frequency trends in its auto-insurance business when it reported solid second-quarter profit on Wednesday.
State Auto hasn't seen any improvement in the frequency of auto claims yet, but Kyle Anderson, a spokesman for the company, said it would not be surprising to see such a trend take hold.
If such a trend becomes strong enough, auto-insurance premiums may be pressured, he added.
However, Anderson also noted that there are a lot of other factors that go into setting auto-insurance rates, such as the cost of repairing crashed vehicles and buying new parts.
Indeed, if rising oil prices end up fueling broader inflation, the cost of settling auto claims could rise, analysts say.
In the second half of this year, high steel and plastics prices will increase the cost or severity of auto-insurance claims involving physical damage, said Brian Meredith, an analyst at UBS, on Thursday.
Alistair Barr is a reporter for MarketWatch in San Francisco.

Does an auto insurance policy have to be in the same name as the car loan?

Answer :

In most cases the name of the registered owner does have to be the name of the insured. But some companies may issue policies to anyone for any car, owned or not.

The 6 Parts Of An Auto Insurance Policy

An auto insurance policy can contain 6 parts. Depending on the state in which you live, you may be required to purchase some, if not all, of these parts.

Bodily Injury Liability
Pays damages when other people are injured or killed in an incident involving your vehicle. This coverage is required in most states.

Property Damage Liability
Pays when you damage the property of others with your vehicle. This coverage is required in most states.

Personal Injury Protection (or Medical Payments Coverage)
Pays medical costs and other damages for injuries to you and your passengers. This coverage is required in some states, optional in others.

Collision Coverage
Pays for loss or damage to your vehicle from a collision with another vehicle or object, when you're at fault. States do not require this coverage. However, companies that loan you money to buy a car or agree to lease you a car, may require this coverage.

Comprehensive Coverage
Pays for loss or damage to your vehicle caused by fire, theft, vandalism, hail, windstorms, riots, falling objects, floods and certain other perils. States do not require this coverage. However, companies that loan you money to buy a car or agree to lease you a car, may require this coverage.

Uninsured Motorist Coverage
Pays for damages to you and your passengers when injury or death is caused by an uninsured, under-insured or hit-and-run motorist. It also pays for damage to your vehicle from a collision with another vehicle or object, when the uninsured motorist is at fault. This coverage is required in some states, optional in others.