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Managing Your Auto Policy

How can I challenge my insurers if they refuse to cover a claim?

Usually, insurers that refuse to cover a claim have a strong legal reason for doing so-even if you disagree. Contact your agent if you feel you are experiencing customer service issues, because your agent can assist you with these issues. But if it is a legal problem, you may have to hire a lawyer.

Talk to your agent if you have a problem with your insurer, and talk to your state insurance department if you want more specific information on state regulations and legal precedents.

What actually happens when I report an accident?

After an accident, you should call your agent as quickly as possible, to help you complete a claim form, determine what exactly happened and evaluate any damages or injuries. Your agent then will contact your insurers claims adjuster-usually within an hour of your report-whose job is to work with you to fix the problem. While compensating you for auto repairs or medical expenses is easy and immediate, determining liability is more complicated. The adjuster will begin the settlement process, the length of which will depend on the cooperation of the other party.

The amount of compensation for your loss can vary according to the adjusters analysis of the damage. You do not have to accept the first amount of money you are offered, if it is lower than the cost of your repair or recovery. While you may have to do some homework to prove your reported loss is valid, its worth it to be certain your insurer lives up to the provisions of your policy.

Remember, negotiating with an adjuster is just business. Insurers simply want to settle claims fairly in light of possible fraud. While it is your insurers responsibility to root out false claims, you pay the price in the end. In fact, you spend nearly a dime on every dollar of your premium to cover the false claims of others. So, try to keep an open mind when working with your adjuster to settle on a price that’s fair to both you and your insurer.

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 agent 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.

Why would my insurer cancel my policy?

Technically, in most states your insurer can cancel your policy only if:

  • you fail to pay your premium;
  • you lose your drivers license;
  • you are guilty of material misrepresentation during the application process (i.e., you fail to notify your insurer of a recorded violation such as a drunk-driving offense); or
  • you fail to report a substantial change of risk, such as buying a high-powered sports car to replace a family sedan.

However, your insurer can choose not to renew your policy for a variety of reasons.

  • Do you have a bad driving record?
  • Have you received a lot of speeding tickets?
  • Have you ever been caught driving drunk?

Not only are these scenarios considered unsafe and illegal, they are justifiable cause for your insurer to label you a bad risk and refuse to renew your policy. (Some insurers may feel compelled to cancel policies after only one accident.)

  • 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 insurers rates may not be adequate to cover losses.

What do I do if my insurer cancels or refuses to renew my policy?

Even “good” drivers can be dropped by their carrier. Reasons range form a “drinking while driving” violation or other serious violations (that make you a high risk) to situations outside your control, such as when insurers in your state are suffering severe business losses. Overall rises in claims or losses can cause insurers to become highly selective in determining whom they can afford to insure.

If you are licensed to drive, by law, you are eligible for insurance. However, your options for new coverage may be limited. Each state has created and regulates a market of last resort for those who cannot otherwise obtain coverage. These groups have various names, depending on the state you live in, such as “assigned risk” plans or the “residual market.” Your agent will know more about the particulars in your state.

Regardless of the reason you were dropped, you need to act immediately to get policy. Under no circumstance should you drive your vehicle without insurance. Call your agent to help you find new coverage. If you do find yourself in the residual market, the price may be higher but it may be your only alternative in maintaining your freedom to drive.

How do I keep my insurance company from canceling my policy?

The most obvious way to maintain your low-risk status is to keep a clean driving record. If youve been in an accident, consider taking a defensive driving course. Even those of us who have been driving for years rarely know the simple tricks to preventing accidents through defensive driving.

Also, look into purchasing special safety and security features for your car, such as anti-lock brakes and an alarm system. A independent agent can give you further tips on how to show your insurer you’re a safe driver.

Who’s watching the insurance companies?

With few exceptions, your insurance company does not set its own rates (unless you live in Illinois). It requests the right to charge appropriate rates from your states insurance department, which responds with legal approval and authorization, provided the requested rates are fair.

Every state has some sort of department, administration or agency that regulates and monitors every insurer operating within the states borders. In addition to approving rates, your states insurance department is involved in all insurance matters on behalf of private citizens and businesses. It also issues operating licenses to insurance companies and agent, based on their ability to meet the states requirements for conduct and knowledge about insurance issues.

Your insurance company works closely with your states insurance department to make sure you are getting the best and fairest possible service within the states guidelines. Contact your states insurance department if you wish to know more about how it serves your interests.