Consumer Guide To Auto Insurance
Choosing an insurer
Auto insurance helps protect you and your familyfrom losses resulting from motor vehicle accidents.Oregon law requires every car to be covered by automobile insurance.The cost for coverage varies widely among companies doing business in Oregon. That’s why it’s important to shop around when choosing an insurance company. This booklet can help you make an informed decision. It includes information about what kinds of coverage are required, how to shop for insurance, and tips to hold down your costs. Comparison shopping takes a little more time, but it can save you money! However, cost is just one factor to consider when choosing an insurance company. It’s also important to look at the company’s financial condition and how it treats its policyholders. A company’s financial information is available from the following organizations that rate insurance companies. The organizations may charge a fee for these servicesAuto insurance basics
Underwriting standards
Underwriting standards are rules insurance companies use to decide whether to insure you. A company reject your application for coverage if your circumstances do not meet the company’s underwriting standards or risk factors. Drivers with the lowest risk factors are least likely to have a claim, so they receive the lowestrates for insurance. Insurance companies typically review the following when deciding whether to insure you:• driving record
• car make and model
• prior insurance coverage
• consumer credit history
document that it helps them predict future claim costs and price their products fairly. At the same time, they must demonstrate that credit information is used as part of an evaluation system that also relies on other relevant factors. Oregon insurers and producers (agents) must tell consumers how the company uses credit information before running credit checks. If a company uses credit information to prescreen applicants, the company must notify you of this before running a credit check. If an insurer uses credit information to make an “adverse” decision, such as not to offer the best rate or not to offer a policy, the insurer must give you specific reasons for the adverse action. You have a right to a free copy of your credit report from the credit bureau. If you find an error in your credit report and arrange with the credit bureau to correct it, you can ask the insurer to reconsider.
Credit scoring
Many insurance companies look at a consumer’s credit history to decide whether to issue an auto or insurance policy or how much to charge. This practice is known as credit scoring or insurancescoring. Insurance scoring has been controversial, and a number of states, including Oregon, have placed
limits on its use. In Oregon, insurers can’t use a policyholder’s credit information to raise premiumsat renewal. Also, the law prohibits insurers from canceling or refusing to renew existing policies
because of credit history problems. Insurers can use credit information when deciding
whether to issue a new policy, but only if they can of tickets or accidents, drivers with poor premiumpayment
records, and drivers with convictions for driving recklessly or under the influence of alcohol or other drugs.
About the Auto quotes
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Types of coverage
Trả lờiXóaWhen you purchase an auto insurance policy, you’re
really buying several types of coverage. There are
seven basic types of coverage:
• Bodily injury liability coverage pays for damages
other people incur if you or someone you
allow to drive your car causes an auto accident.
Examples of damages include medical expenses,
rehabilitation, funeral costs, settlement of lawsuits,
and legal expenses.
• Property damage liability coverage pays for
damage to other people’s property if you or
someone you let drive your car causes an auto
accident. It usually pays for repair or actual cash
value (ACV) of others’ property and your legal
expenses.
• Personal injury protection (PIP) coverage pays
for medical, rehabilitation, funeral, and childcare
expenses as well as for loss of earnings and
in-home assistance if you and your passengers
are injured in an accident, regardless of who is at
fault.
• Uninsured and underinsured motorist bodily
injury coverage pays medical, rehabilitation,
and funeral expenses, loss of earnings, and other
damages if you or your family are involved in a
vehicle, bicycle, or pedestrian accident caused by
an uninsured or underinsured motorist or a hitand-
run driver.
• Uninsured motorist property damage coverage
pays for damage to your auto caused by an uninsured
driver. This optional coverage generally duplicates
your collision coverage, but may be a good
buy if you have a high deductible on your collision
coverage or don’t have collision coverage.
• Collision coverage pays for repairing your
vehicle in a collision or rollover.
• Comprehensive coverage pays for damage to
your vehicle resulting from theft, vandalism,
windstorms, fire, hail, etc.
Rating categories
Trả lờiXóaIf you are approved for coverage, the insurance company
will place you in one of three basic categories of
drivers: preferred, standard, or nonstandard.
Preferred: This category is for drivers considered
the best risks, which usually means the safest
drivers. Preferred drivers have maintained clean
driving records for the past three years and pay the
lowest rates.
Standard: This category is for drivers considered
moderate risks. Rates for standard drivers are
higher than those for preferred drivers. People in
this category usually drive “family” cars and have
reasonably clean driving records.
Nonstandard: This category is for drivers considered
high risk. They pay the highest rates for insurance.
This category may include drivers under 25,
drivers with little experience, drivers with histories
Types of coverage
Trả lờiXóaWhen you purchase an auto insurance policy, you’re
really buying several types of coverage. There are
seven basic types of coverage:
• Bodily injury liability coverage pays for dam- ages other people incur if you or someone you allow to drive your car causes an auto accident. Examples of damages include medical expenses, rehabilitation, funeral costs, settlement of law- suits, and legal expenses.
• Property damage liability coverage pays for damage to other people’s property if you or someone you let drive your car causes an auto accident. It usually pays for repair or actual cash value (ACV) of others’ property and your legal expenses.
• Personal injury protection (PIP) coverage pays for medical, rehabilitation, funeral, and child- care expenses as well as for loss of earnings and in-home assistance if you and your passengers are injured in an accident, regardless of who is at fault.
• Uninsured and underinsured motorist bodily injury coverage pays medical, rehabilitation,
and funeral expenses, loss of earnings, and other damages if you or your family are involved in a vehicle, bicycle, or pedestrian accident caused by an uninsured or underinsured motorist or a hit- and-run driver.
• Uninsured motorist property damage coverage pays for damage to your auto caused by an unin- sured driver. This optional coverage generally du- plicates your collision coverage, but may be a good buy if you have a high deductible on your collision coverage or don’t have collision coverage.
• Collision coverage pays for repairing your vehicle in a collision or rollover.
• Comprehensive coverage pays for damage to your vehicle resulting from theft, vandalism, windstorms, fire, hail, etc.
Extra liability coverage
Trả lờiXóaYou can buy a separate personal umbrella policy
to provide extra liability protection if you are sued.
An umbrella policy benefit will start paying when
your other policy’s liability limits are exhausted. For
example, let’s say you lose control of your car and
cause an accident that kills one person, seriously
injures four others, and damages seven vehicles and
one residence. The liability damages sustained in
this accident are likely to exhaust the limits of your
auto policy. A personal umbrella policy provides ad-
ditional liability protection.
Your right to be treated fairly
Trả lờiXóaAn insurance company cannot deny, refuse to renew,
limit, or charge more for coverage because of your
race, color, religion, or national origin.
A company also cannot deny, refuse to renew, limit, or charge more for coverage because of your age, gender, marital status, domestic partnership status, disability, or partial disability unless the refusal, limi- tation, or higher rate is “based on sound underwrit- ing or actuarial principles.”
In addition, a company cannot unfairly discriminate between individuals of the same (rate) class and essentially the same hazard (risk) in its rates, policy terms, benefits, or in any other manner unless the refusal, limitation, or higher rate is “based on sound actuarial principles.”
Step 1: Understand your policy
Trả lờiXóaBefore you have a loss, sit down and carefully read
your insurance policy. If you have any questions
about what is or is not covered, call your producer
(agent) or company.
Step 2: Exchange information
If you are involved in an accident, get the other
driver’s name, address, phone number, insurance
carrier, and insurer’s phone number. Be prepared
to give the same information about yourself to the
other driver. You can find insurers’ telephone num-
bers on proof-of-insurance cards.
Step 3: Identify witnesses
Ask witnesses to the accident for their names and
phone numbers in case their account of the accident
is needed.
Why does my insurance cost more than my producer (agent) said it would?
Trả lờiXóaThis is called a misquote. Determining your
premium depends on many factors, includ-
ing where you live, the kind of car you drive, how
much you drive, how much coverage you want, your
driving record, and your age.
If an error is made in reporting any of these facts, your rates won’t be quoted correctly. Misquotes can also happen if your producer (agent) makes a mistake in applying the company’s rating system. Auto insur- ance misquotes can happen when your application information differs from your actual driving record.
Companies ask states’ motor-vehicle divisions to verify the records of drivers they insure.
If you told your insurance producer (agent) you have a perfect driving record, and you don’t, your insur- ance company will charge higher premiums than your producer (agent) quotes.
To avoid misquotes, provide accurate information about your driving record and any other facts affect- ing the cost of insurance, such as the make of your car or how far you commute to work. Verify all information before signing the application.
What do insurance companies consider when they decide whether to cancel or not renew policies?
Trả lờiXóaInsurance companies evaluate the risks associated with each policyholder to
determine if you are a “good risk” or if your policy should be canceled or not renewed. Some of the areas insurance companies review:
• Claims. Do you file claims frequently or for
large amounts?
• Driving record: Do you have a bad driving record
(speeding, driving under the influence, etc.)?
My car was “totaled.” Why didn’t my policy pay what I think my car was worth?
Trả lờiXóaMost auto insurance policies pay the actual cash value (ACV) of a vehicle totaled in an
accident. The ACV is equal to the market value of an auto immediately before the accident.
Insurers must use a fair and reasonable method to determine the value of your car. They also must
tell you in writing that information about how they determined the value is available if you request it.
Tell the insurance company what you believe makes your car worth more than the insurer is willing to pay you. It may come down to negotiations between you and the insurance company. But remember, an insurance company won’t compensate you for your car’s sentimental value.
What happens if my loan was more than my insurance company says my car was worth?
Trả lờiXóaThe value of a car is sometimes less than the balance on your car loan. There can be
several reasons for this. Interest rate changes may have increased the amount of your loan. Rebates may not have applied to the purchase price or poor
maintenance of the auto may have reduced its value. The insurance company bases its payment on the actual cash value (ACV) of the car at the time of the loss, not on the amount of your loan.
You can purchase a special type of insurance called “Guaranteed Auto Protection,” or GAP, when you buy a car and GAP may help in case of loss if you owe more on your lease or loan balance than the ACV of the vehicle. This coverage is sometimes