Technically, in most states your insurer can cancel your policy only if:
• you fail to pay your premium;
• a driver loses his or her driver’s license;
• you are guilty of material misrepresentation during the application process (e.g., you fail to notify your insurer of a recorded violation such as a drunk- driving offense)
However, your insurer can choose not to renew your policy for a variety of reasons,from driving citations to poor driving experience.
Where do you live? Has the neighborhood changed in the last few years? Have the accident or crime rates risen noticeably? As regions are reassessed periodically, their status could change and you could suddenly find yourself living in a high-risk area where your insurer’s rates may not be adequate to cover losses.
What happens if I have an accident with an uninsured driver?
First, call the police to the scene to be sure all pertinent information is properly recorded. Your nerves will be shaken right after an accident, and it helps to have a calm and knowledgeable person walking you through the necessary details.
Then, contact your trusted company insurance professional immediately and ask about filing a claim. If you followed all the recommended guidelines when you bought your policy, you should be covered within the limitations of that policy. Remember, your insurance policy is designed to protect you.
If the cost of your damages or injuries exceed the amount your policy will pay out, it may be time to take legal action against the other party. Even if you have no-fault insurance, sometimes the only way to be compensated is to place blame and responsibility where it belongs.
Then, contact your trusted company insurance professional immediately and ask about filing a claim. If you followed all the recommended guidelines when you bought your policy, you should be covered within the limitations of that policy. Remember, your insurance policy is designed to protect you.
If the cost of your damages or injuries exceed the amount your policy will pay out, it may be time to take legal action against the other party. Even if you have no-fault insurance, sometimes the only way to be compensated is to place blame and responsibility where it belongs.
Do all states require some kind of liability insurance?
No. Some states, while not mandating auto insurance, have “financial responsibility laws” that require all drivers to be able to pay for any damage or injury they may cause. However, carrying liability insurance is still the best way for you to meet your state’s financial responsibility requirements.
Uninsured motorists (UM) and under-insured motorists (UIM) policies are offered by law in all states, including no-fault states. In fact, some states require all motorists to carry this coverage to gain protection from inadequate insurance coverage of other drivers.
Uninsured motorists (UM) and under-insured motorists (UIM) policies are offered by law in all states, including no-fault states. In fact, some states require all motorists to carry this coverage to gain protection from inadequate insurance coverage of other drivers.
What is “no-fault” insurance?
No-fault insurance is a system adopted in some states that essentially bypasses the conventional legal procedure which finds fault in many accidents. (This is the procedure by which you hire a lawyer, file suit and possibly go to court to prove the accident was the other guy’s fault.) No-fault simply does away with the concept of one party or the other being at fault.
There are no lawyers, no court, no judge, no jury, no lengthy lawsuits against the other party. This is considered beneficial to taxpayers, because it eliminates costly legal proceedings that the state must manage, and to insurance policyholders, because it helps keep rates down.
If you are insured in a no-fault state and have an accident, in many instances you don’t go after the other driver. You contact your own insurer and file a claim. Your own insurance policy compensates you for damages, medical expenses, lost wages, etc.
The type and range of no-fault coverage varies from state to state. What defines the limitations of no-fault policies can differ in two critical areas:
• Threshold—The type or cost of damage/injury that triggers the need for legal action.
• Mandated Benefit Level—The package of benefits (medical, wage loss, re placement services and other expenses) your state requires you to carry.
The details of no-fault insurance can be complicated. Contact your agent or your state’s insurance department for further information.
There are no lawyers, no court, no judge, no jury, no lengthy lawsuits against the other party. This is considered beneficial to taxpayers, because it eliminates costly legal proceedings that the state must manage, and to insurance policyholders, because it helps keep rates down.
If you are insured in a no-fault state and have an accident, in many instances you don’t go after the other driver. You contact your own insurer and file a claim. Your own insurance policy compensates you for damages, medical expenses, lost wages, etc.
The type and range of no-fault coverage varies from state to state. What defines the limitations of no-fault policies can differ in two critical areas:
• Threshold—The type or cost of damage/injury that triggers the need for legal action.
• Mandated Benefit Level—The package of benefits (medical, wage loss, re placement services and other expenses) your state requires you to carry.
The details of no-fault insurance can be complicated. Contact your agent or your state’s insurance department for further information.
Why are rates different for different cars, even if the cars cost the same?
Vehicles are also grouped into categories according to their likelihood of being damaged, vandalized or stolen. Insurers generally consider the size and type of vehicle, as well as the value and the cost of repairs (which can vary greatly, even on vehicles that cost roughly the same). Thus, a new station wagon may be expected to hold up better in an accident than a sports car or a subcompact.
Putting insurance aside, safety is key when buying an automobile. Your life depends on it! Some cars are considered safer than others because of their performance record in safety tests and real accidents.
That’s why you should research insurance coverage before you buy your car. It helps you to understand the actual cost and indicates those vehicles with good safety records. Your insurer will ultimately reward you for putting safety first.
Putting insurance aside, safety is key when buying an automobile. Your life depends on it! Some cars are considered safer than others because of their performance record in safety tests and real accidents.
That’s why you should research insurance coverage before you buy your car. It helps you to understand the actual cost and indicates those vehicles with good safety records. Your insurer will ultimately reward you for putting safety first.
How does where I live affect my premium?
Where you live (or, more precisely, where you keep your car) has a bearing on your chances of having an accident or becoming a victim of theft or vandalism. That’s why, all other things being equal, a vehicle owner in Brooklyn, N.Y., may pay a higher rate than the owner of an identical vehicle in Casper, Wy.
Other factors affecting regional insurance rates include time and efficiency of police response and law enforcement, local road and traffic conditions and the quality of local medical services. Insurers even factor in the litigation rates in a given area—that is, how many lawsuits are filed, go to trial, are settled out of court and for how much.
Other factors affecting regional insurance rates include time and efficiency of police response and law enforcement, local road and traffic conditions and the quality of local medical services. Insurers even factor in the litigation rates in a given area—that is, how many lawsuits are filed, go to trial, are settled out of court and for how much.
Why and how are policies priced for different drivers?
Drivers are grouped according to the level of risk each one poses—i.e., the amount of loss incurred by insurers within categories of policyholders. For various reasons, where permitted by law, drivers are often categorized by:
• Sex—Men have more accidents on the road than women.
• Age—Drivers under 25 (and, for some insurers, under 30) are considered at higher risk of having an accident.
• Marital Status—Married drivers tend to have fewer accidents than single drivers.
• Personal Driving Record—Years of driving experience, accidents, speeding tickets and drunk-driving offenses are all factors in determining how much of a risk you pose as a motorist.
• How You Use Your Vehicle—If you commute by car during rush hours, you’re at greater risk of having an accident than if you only drive for errands and recreation on the weekends. Drivers who use their own vehicles for
business also are considered to be at greater risk.
• Type of Vehicle—The value, size, weight, age of your vehicle, even the cost of replacement parts, are essential to determining the price of your insurance. The cost of your insurance policy is largely based on the average cost of covering actual losses, spread out over your particular “rating group” as a whole. Of course, you may rarely have an accident or have your car
stolen, and therefore will rarely need to be compensated. But others in your category may not be so lucky. Your premium will help to pay for their losses, just as their premiums would help to pay for yours.
For example, if you are a 23-year-old man and you park your new sports car on a downtown street in a large city, you will likely pay more for insurance than a 37-year-old woman who parks her four-wheel-drive in the suburbs, simply because, based on average losses, you have a greater chance of having an accident or being the victim of auto theft.
• Sex—Men have more accidents on the road than women.
• Age—Drivers under 25 (and, for some insurers, under 30) are considered at higher risk of having an accident.
• Marital Status—Married drivers tend to have fewer accidents than single drivers.
• Personal Driving Record—Years of driving experience, accidents, speeding tickets and drunk-driving offenses are all factors in determining how much of a risk you pose as a motorist.
• How You Use Your Vehicle—If you commute by car during rush hours, you’re at greater risk of having an accident than if you only drive for errands and recreation on the weekends. Drivers who use their own vehicles for
business also are considered to be at greater risk.
• Type of Vehicle—The value, size, weight, age of your vehicle, even the cost of replacement parts, are essential to determining the price of your insurance. The cost of your insurance policy is largely based on the average cost of covering actual losses, spread out over your particular “rating group” as a whole. Of course, you may rarely have an accident or have your car
stolen, and therefore will rarely need to be compensated. But others in your category may not be so lucky. Your premium will help to pay for their losses, just as their premiums would help to pay for yours.
For example, if you are a 23-year-old man and you park your new sports car on a downtown street in a large city, you will likely pay more for insurance than a 37-year-old woman who parks her four-wheel-drive in the suburbs, simply because, based on average losses, you have a greater chance of having an accident or being the victim of auto theft.
What are the different types of policies and what do they cover?
Auto insurance is divided into several types of coverage:
• Liability covers damage you cause to other people’s property and injuries to the people.
• Collision covers damage to your own vehicle in an accident.
• Comprehensive covers losses other than collision, such as fire damage to your vehicle, break-ins, vandalism or theft, as well as natural disasters (earth quake, hail, hurricane, flood, etc.).
• Medical payments insurance, usually in the range of $1,000 to $5,000, covers medical expenses for injuries. This “good-faith” coverage guarantees imme- diate medical payments for you, and your passengers, regardless of who is at fault. It also covers you and members of your household as pedestrians if struck by an automobile.
• Uninsured motorist (UM) and underinsured motorist (UIM) coverage protects you if you are injured in an accident caused by others who carry insufficient or no liability insurance.
• Extra coverages include expenses for towing, labor, “no-fault” coverage, etc. These are generally provided as add-ons or “endorsements” to your policy.
• Liability covers damage you cause to other people’s property and injuries to the people.
• Collision covers damage to your own vehicle in an accident.
• Comprehensive covers losses other than collision, such as fire damage to your vehicle, break-ins, vandalism or theft, as well as natural disasters (earth quake, hail, hurricane, flood, etc.).
• Medical payments insurance, usually in the range of $1,000 to $5,000, covers medical expenses for injuries. This “good-faith” coverage guarantees imme- diate medical payments for you, and your passengers, regardless of who is at fault. It also covers you and members of your household as pedestrians if struck by an automobile.
• Uninsured motorist (UM) and underinsured motorist (UIM) coverage protects you if you are injured in an accident caused by others who carry insufficient or no liability insurance.
• Extra coverages include expenses for towing, labor, “no-fault” coverage, etc. These are generally provided as add-ons or “endorsements” to your policy.
Why do I need auto insurance?
Your car is likely one of the most expensive things you own. Insurance protects your investment and guarantees a way of coping with the expense of accidents, vandalism or theft. It also secures your financial responsibility to the institution lending you money to buy your vehicle.
When you drive you are responsible for the safety of your passengers, your fellow drivers, other people’s property, pedestrians and yourself. Insurance helps ensure your ability to cover the costs of potential damages or injuries.
There are also requirements to be financially responsible in state laws, which are best satisfied through your insurance coverage. In most states insurance is a prerequisite to registering your car. So if you want to drive your own vehicle, you must be insured.
When you drive you are responsible for the safety of your passengers, your fellow drivers, other people’s property, pedestrians and yourself. Insurance helps ensure your ability to cover the costs of potential damages or injuries.
There are also requirements to be financially responsible in state laws, which are best satisfied through your insurance coverage. In most states insurance is a prerequisite to registering your car. So if you want to drive your own vehicle, you must be insured.
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