Auto Insurance Questions Archive for August, 2009

• Are the insurance companies regulated by the government?

  In the United States, no federal agency had been formed to regulate insurance companies. However, the individual states regulate these companies. The insurance regulatory agency in the states might have various names, like ‘Department of Insurance’, ‘Insurance Bureau’, ‘Division of Insurance’, etc. Normally, these agencies would be headed by a person appointed by the state government. That official would have … (more) August 7, 2009

• Would the insurance company be able to refuse to sell a policy to a person? What reasons could be stated for this refusal?

  The insurance company could not refuse to sell insurance to a person based on race, sex, religion, color, nationality, or ancestry. If it does so, it is illegal. Certain states might include other ‘prohibited classifications’ like age, marital status, language, occupation, physical or mental impairment, sexual orientation, geographic location, etc. to the list. Apart from the prohibited classifications, the insurance … (more) August 6, 2009

• What does the term, ‘reservation of rights letter’ mean?

  If a person is sued, the legal complaint that is filed against that person would contain various different claims. Some of the claims might be covered by the liability insurance and some of them might not be covered. The insurance company is legally bound to provide a defense to the policyholder if the claims are covered by the policy. However, … (more) August 5, 2009

• What is the legal significance of a car insurance policy?

  A car insurance policy is a contract between the person purchasing the policy and the insurance company. This contract is legally binding on both parties. The person buying the car insurance policy is known as the ‘policyholder’ or the ‘insured’. The insurance company could be termed as the ‘insurer’. The insurance company would agree to pay the policyholder or other … (more) August 4, 2009

• Can a car insurance policy be cancelled at any time? If it is cancelled, would there be any penalty?

  A policyholder could opt to cancel the car insurance policy whenever it is so desired. A proper notice to this effect should be sent to the insurance company. In certain cases, the insurance company might state that the original insurance policy should be returned or the company might ask the insured person to sign a paper termed as ‘policy release’. … (more) August 3, 2009

• If a person is injured in car accident while using a rental car and the driver is not on contract, could the rental agency be made to pay?

  If the car rental agency had knowingly rented an driver without entering into a contract, the rental agency would be liable for the injuries of the person who had used the rental car. However, this would be a rare case, because most car rental agencies would be very vigilant about getting all their drivers into proper contract. If the driver … (more) August 2, 2009

• If the car is stolen and a claim is made, how would the actual cash value or ACV be determined by the insurer? Would it be done by the insurer or an independent agency? Would it be possible to dispute the price offered by the insurer? Would the insured person be able to get an independent value assessment?

  At the outset, the insured person should check whether the car insurance policy had specified and defined the actual cash value. Normally, this value would be the market value of the car and the insured person is free to support the claim with independent value assessment from private professional appraisers. The private agency employed by the insurance company would expect … (more) August 1, 2009