If a car were totaled in an accident, the insured person would receive the market value of the car, which would be assessed either by the insurance company or by an outside agency employed by the insurer. This fair market value as determined by the insurance company could be more or less than the loan amount that had been taken … (more) July 24, 2009
Auto Insurance Questions Archive for July, 2009
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How much money would a car insurance policyholder receive if the car is totaled in an accident?
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Should everyone have auto insurance?
All the states had made it mandatory that everyone should have either proof of financial responsibility or auto liability insurance. Each state would have set a minimum limit but additional coverage might be needed to meet out of pocket expenses. If there is a loan or a lease on the car, apart from the liability coverage fixed by the state, … (more) July 24, 2009
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If the insured person feels that certain terms in the policy appear to be different from what the insurance company claimed it meant, how can this issue be resolved?
The law recognizes the fact that insurance policies are complex documents. The law also understands the insurance companies underwriting the policies possess a bargaining position that is obviously unequal and biased towards them. Because of this, the courts had developed a few ‘rules of construction’ when insurance policies are read. These rules tend to guard the interests of the insured … (more) July 23, 2009
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If a person is sanctioned a loan that is lesser than what could be real worth of the car, what should be done?
In several cases, the value of the car could be lesser than the balance on the car loan. This could occur due to various reasons. The changes in the interest rate might have increased the balance loan amount. If the car had been poorly maintained, the value of the car would diminish. The rebates available for the car might not … (more) July 23, 2009
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If the policyholder misses an insurance premium and the insurance company issues a cancellation notice, what should he/she should do to keep the insurance policy?
For liability insurance policies, the insurance company would normally send a cancellation notice several days before the effective cancellation date. In most of the states, this notice should be issued at least 10 days before the date of cancellation of car insurance. The insurance policy terms and conditions would also invariably specify this period. If the policyholder makes the premium … (more) July 22, 2009
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If a car is totaled and the policy did not make adequate payment, what could be the reason?
Majority of car insurance policies would pay only the actual cash value or ACV of a car that had been totaled in accident. The ACV is calculated based on the market value of the car immediately prior to the accident. Normally, the insurers would be required to use a reasonable and fair method to arrive at the market value of … (more) July 22, 2009
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If a teenage son recently obtained a driving license, but he would not be driving the car, should he still be insured?
Insurance companies normally insist that all the persons in the household should be listed on the policy. If a person in the household had a separate policy, then that person could be excluded from the list. As such, the teenage son should be listed on the policy and insured, even if he would only be visiting on weekends and would … (more) July 21, 2009
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If a person in the household had a bad driving record, would it affect the purchase of car insurance?
If a person in the household had a bad driving record, it would definitely affect the purchase of car insurance. Several insurance companies would not issue car insurance to a person if the spouse or other relatives in the house had a bad driving record. For example, if the teenage son of the person who is purchasing car insurance had … (more) July 20, 2009
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Will my driving record have an impact on my insurance premium?
The first step taken by car insurance companies when a person purchases car insurance is to obtain the driving records of the resident state of that person as well as all the states where that person is licensed to drive. In general, the insurers would look at the driving record for the past 3 to 5 years. The premium fixed … (more) July 19, 2009
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If a person is convicted of drunken driving, could the insurance company raise the car insurance premium rates?
If a person were convicted of drunken driving, the insurance companies would definitely increase the car insurance premium rates. However, this would depend on the past record of the policyholder and the length of the relationship of the policyholder with the insurance company. In certain cases, the insurance company might refuse to renew the car insurance policy. When that person … (more) July 18, 2009
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Why is there a difference between the cost estimated by the insurance agent and the actual cost?
The insurance premium is determined by the insurer based on several factor. This would include the type of car being insured, how much the car would be driven, the place of residence of the person insuring the car, how much coverage is required, the age of the person, and the driving record of that person. If the insurance agent had … (more) July 18, 2009
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What is ‘bad faith’ lawsuit?
All the insurance policies, including the car insurance policies would contain an obligation that is not specified but implied. Under this obligation, the insurance company should act in ‘good faith’ and have a ‘fair dealing’ with the insured person. When the policyholder presents a claim, under this implied obligation, the insurance company should not look for reasons to avoid payment. … (more) July 17, 2009
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What minimum requirements should be met in purchasing a car insurance policy?
The state insurance commissioner’s website would have the minimum requirements for liability and financial responsibility. Every state had made it compulsory that every person driving a car should meet the minimum requirements. These limits would vary from state to state and each one should meet the minimum limits of the particular state in which he/she is driving. July 17, 2009
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What is meant by the term, ‘liability policy limits’?
Normally, insurance professionals and insurance agents opine that the ideal car insurance policy limits are 100/300/100 in insurance parlance. That means that the policy limit for bodily injury per person should be 100,000, the limit for bodily injury per car should be 300,000, and the limit for property damage per accident should be 100,000. However, these limits would depend on … (more) July 17, 2009
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Within how many days should a person collect the GAP insurance claim when the car is totaled in an accident?
This would depend on the exact terms of the GAP insurance policy. If the primary insurance company had declared the car as a total loss, then the GAP insurance company should be immediately notified. The primary insurance company would estimate the actual cash value of the car. Based on that estimation, the GAP insurer would determine the amount that would … (more) July 16, 2009
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What is the difference between various insurance policies like comprehensive policy, collision policy, etc.?
Collision policy coverage would be available when there is a collision between two vehicles or any other collision. On the other hand, comprehensive policy provides coverage for all other mishaps other than collision, like theft, fire, etc. It would be advisable to have both policies to cover all the risks. However, the collision policy could be omitted if the car … (more) July 16, 2009
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Would all the persons driving the car be covered by the car insurance?
Normally, the insured person and the spouse would be named on the car insurance policy. However, any other person having the trust and permission of the insured person could drive the car. Still, it would be advisable to list all the persons in the household in the insurance policy so that they are covered by the policy. Persons not living … (more) July 16, 2009
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How would the loan or lease GAP insurance premium be calculated?
The loan or lease GAP insurance provides valuable protection when the car is totaled in an accident. In the first few years of the life of the car, the actual cash value offered by the insurance company when the car is totaled would usually be lesser than the actual retail value of the car. The GAP insurance would compensate this … (more) July 15, 2009
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What would happen if a person is driving a car without purchasing car insurance?
This would depend on the state in which the person lives in. Majority of states have very stringent laws on car insurance. If a person were driving a car without purchasing proper car insurance, it would mean that he/she is not following the state laws and the fines or penalties can be quite tough. A person who is doing this … (more) July 15, 2009
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What are the laws on financial responsibility in car insurance?
The state laws on financial responsibility intend to ensure that each person driving a car is having the financial capacity to pay or compensate for any mishap that might occur while driving the car. The car insurance is the easiest method of proving the financial capacity. July 15, 2009