Auto Insurance Questions Archive for 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

• What steps could be taken to get lower premiums for car policies of teenagers and college students?

  Teenagers should not be allowed to use expensive or luxurious cars like sports cars. When the insurance company sees such a car being used by a teenager, the premium would be immediately hiked significantly. Hence, the parents should offer only small, cheap, and safe cars to teenagers. These cars have not only lower accident records but also lesser theft rates. … (more) July 31, 2009

• What are the main issues in car insurance for teens and college students?

  In general, car insurance for teens and college students is expensive. Moreover, college students and teens would not have a big budget. Since statistics reveal that students and teens had been involved in more accidents than other persons had, the insurance companies demand a steep premium for car insurance policies for young persons up to the age of 25. After … (more) July 31, 2009

• What are the general duties in making a claim?

  Normally, insurance policies require that the insured person should promptly notify the insurer of a loss, including all the information about the time and place of the accident, the extent of injury, and any property damage. In the case of property damaged, the insured person should take reasonable steps for protecting the property from additional damage. The insured person should … (more) July 31, 2009

• Would the insurance company settle the accident claim if the car carried insurance but the driver did not have a proper driving license?

  If the car had car insurance policy but the driver did not have any valid driving license, still the insurance company would pay for the damages and injuries of both parties. However, they would invariably make it up when the car policy comes up for renewal. They would definitely cite this incidence and demand a higher premium. Hence, it should … (more) July 30, 2009

• What is the role of an attorney in a car accident claim?

  Engaging an attorney in a car accident claim could be a tricky issue. In several cases, it could even prove to be counter-productive. Some of the problems in engaging a lawyer are presented below. If the claim amount is small, no lawyer would be willing to take up that case. The court process is lengthy and cumbersome to all … (more) July 30, 2009

• What should a person do when facing a claim?

  The insured person should perform certain duties to comply with the regulations of the insurance policy when a loss occurs. These duties would vary from policy to policy. One would be able to find these duties in the ‘Conditions’ section of the policy. Reading these duties carefully and performing them meticulously is very important for meeting the claim. Failure to … (more) July 30, 2009

• If a person had a policy with a liability limit of $100,000 and the medical bills, legal fees, and other damage expenses exceeded that limit, what should be done?

  When there is a policy limit of $100,000 and the awarded or settled amount by way of medical bills, legal fees, and other damage expenses exceed this limit, the insurance company would be obligated for paying only up to the policy limit. One could go on trial and obtain a verdict from the jury for sanction of amount exceeding the … (more) July 29, 2009

• What would happen if one person did not have car insurance but the other person was at fault?

  Even though the insurance laws vary from state to state, the common rule is that the fault is never determined by whether one or both persons have insurance or not. Still, the penalties for driving without valid car insurance are very severe in most states. These penalties would include suspension of driving license, hefty fines, and road crew assignments, etc. … (more) July 28, 2009

• What is the amount a person would get for pain and suffering in a car accident?

  The amount that a person receives for pain and suffering would depend on the type of treatment and its duration. Normally, the settlement for personal injury is a lump sum amount. This is intended to compensate the injured person for all the medical expenses, wage losses, and other damages, including property damage. However, the actual extent of pain and suffering … (more) July 28, 2009

• What is meant by the law of ‘financial responsibility’?

  What is meant by the law of ‘financial responsibility’? The law in all the states stipulates that a person who had been convicted on a specific traffic violation or who had been involved in any accident should have proved his/her financially ability to meet the damage awards that could arise from such incidents. In theory, when a car is purchased … (more) July 28, 2009

• What would be the rights of a person who had not reported the accident immediately to the insurance company?

  Handling auto claims and arriving at spot settlements is a huge mistake when insurance is available to the car insurance policyholder. Insurance companies visit the car repair shops and insist that the repairs are properly carried out and they relate to the actual damages. Further, apart from the initial assessment made mutually at the spot of the accident and settlement … (more) July 27, 2009

• Should a person carry uninsured car coverage even in a no-fault state like Florida?

  If a person possesses a normal health insurance that covers the injuries occurring in an accident, it might lead to the thinking that uninsured car coverage would not be necessary, because it would cover only bodily injury and not the damage to the vehicle. However, in Florida, a PIP is required, which would be usually a minimum of $10,000. Hence, … (more) July 27, 2009

• How exactly does an umbrella insurance policy works?

  In the case of an accident, the car insurance policy would pay for the medical bills, lost wages, and any rehabilitative therapy expenses of the injured person or persons if the owner of the policy had been at fault. If the person at fault had been found to be negligent in driving, the cost of the defense lawyer would also … (more) July 27, 2009

• Should a person report all car accidents to the insurance company?

  Yes, according to car insurance policy, all accidents should be immediately reported to the insurance company for the following reasons. The insurer would like to inspect the accident site and take photos for estimating the damage. Even if it is a single vehicle accident, the value of the vehicle would be altered after the accident and the insurer should … (more) July 26, 2009