Cancellation

Q. Can an insurance company cancel my auto policy?

A. Yes. If an auto policy is involved, they can cancel if the consumer fails to pay the premium or if the consumer's license has been suspended or revoked during the term of the policy. If a homeowner's policy is involved, they can cancel if the consumer fails to pay the premium, if there is a fraud or serious misrepresentation when completing the insurance application, if the consumer is convicted of a crime, or if changes are made to the property that increase the risk of loss.

Q. Does the company have to refund my premium on the auto policy if I can cancel the contract?

A. Yes. However you may receive less than the unearned premium because the company may charge the consumer for processing the cancellation or setting up the original policy.

Claims

Q. I contacted my company about a loss to determine if it was covered under the policy. I never collected a penny from the insurer. Can they record this as a claim?

A. Yes, all claims made are considered part of the consumer's claims experience.

Coverage

Q. I've had an accident with an uninsured motorist. What do I do?

A. Contact your state's Department of Revenue. The Department of Revenue enforces the financial responsibility (mandatory liability) laws in your state. They will investigate and, if necessary, enforce the statute. Also, if you were injured, report the loss under your uninsured motorist coverage with your company.

Q. What does uninsured motorist coverage cover?

A. Uninsured motorist coverage applies to bodily injury only. It will protect you from hit-and-run drivers and cover injuries sustained while in your car or as a pedestrian when hit by an uninsured driver. It does not cover damage to your vehicle.

Q. Can other people drive my car and still be covered?

A. Generally, anyone who has permission to drive your vehicle is covered. All people who regularly use your car should be listed on your policy. You should check with your insurance company for specific details.

Q. Why should I list all household members even when they don't drive my car?

A. All family residents of your household of driving age must be listed to protect both you and your insurance carrier. Exclusions are available in some states for family members who do not require coverage.

Q. Who is considered to be a "Family Member?"

A. Typically, family members include any immediate or extended family member of driving age. This Includes parents, children, siblings, grandparents, aunts, uncles, cousins, foster children, in-laws & step family members. There may be some variations in this list among different carriers.

Q. Which household members do not require coverage?

A. Household residents that do not need to be listed include: Non-family household residents who do not drive the vehicle. Immediate dormitory roommates who are non-family and do not drive the vehicle Additional residents of a military barracks need not be listed as drivers.

Q. Does my policy provide coverage when I rent a car?

A. Today, most companies will provide rental car coverage only if you are renting a car on vacation. Call your insurance company to find out what rental coverage you have under your policy.

Q. What is a "Deductible?"

A. A deductible is the amount of each claim you agree to pay on collision or comprehensive coverage. Your insurer will pay the difference between the claim amount and the deductible. For example, if your claim is $2000 and your deductible is $500, your insurer will pay $1500 and you will pay $500.

History

Q. Can the driving/accident records of my child/spouse have an impact on my ability to buy auto insurance?

A. Yes, the driving record of any licensed driver in your 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 high-risk insurance premiums.

Q. Can the company refuse to renew my auto policy for claim frequency?

A. Yes, even for one claim. The dollar amount of the claim is irrelevant. An insurer must give you 30 days notice and the specific reason for their refusal to renew (e.g., two claims and specify the dates).

Q. What if I forget to list something on my driving record?

A. Your quotes are based on information you provide. All driving and claims records are verified before a policy is issued. Any omitted information would be noted at that time and the insurance premium would be adjusted to reflect your actual driving record.

Misc.

Q. Can a finance company take out insurance on my car and charge me for it?

A. Yes, if under the terms of your loan, you agree to provide comprehensive and collision insurance, and you fail to do so. The lending institution can obtain a policy to protect its interest. These policies typically do not offer liability insurance coverage to meet the state's financial responsibility (mandatory liability) laws.

Q. What is actual cash value (ACV) vs. replacement cost coverage?

A. All auto policies are written for ACV. Because of the generally large availability of used vehicles, auto settlement values are determined by similar vehicles available in the market. Homeowners can endorse their policy to change their ACV to replacement cost coverage. ACV is based on the cost to replace with a new comparable item, less depreciation based on the age of the lost or damaged item. Replacement cost equals a new item's cost without depreciation.

Rates

Q. What affects my individual auto insurance rates?

A. A number of factors can affect the cost of your automobile insurance. Age, make and model of car, driving record, purpose the car serves, where you keep and drive your car, and your credit rating all affect insurance rates.

Q. How are auto insurance rates determined?

A. Insurance companies use statistical history to determine current rates. Rates are based on the amount needed to pay all claims and company business expenses.

Q. Why do insurance rates vary so much?

A. You might think that your auto insurance rate would be pretty much the same no matter which company you choose. But your auto insurance rates can vary widely - even hundreds of dollars -- primarily because of:

Varying claims experience - Auto insurance is priced to cover the costs of accidents that may happen in the future. Of course, companies cannot see into the future, so to do this, they use information about their past claims experience. Since each company has had different claims experiences with the groups of people they insure, the rates charged customers by different companies vary.

Varying costs of doing business - Each company's cost of doing business (how much they pay to sell and service policies), along with their financial goals, is different, resulting in different prices being charged to consumers.

Auto insurance companies price policies to cover the amount they'll need to cover:

• Accidents that have occurred;
• Claims salaries, building leases, and other claims-related costs; and
• Non-claims expenses such as customer service salaries, advertising and the price of selling policies.