We should always ask question relating to the insurance policy and clear all doubts, relating to the policies, even if it means a higher rate of premium. It is always good to ask and question the insurer about the different guidelines and policies, including the policies on renewals and other comprehensive claims. When we are purchasing different insurance policies, we should keep in mind that we choose a higher rate of deductible, we will be required to pay less number of claims. We should always take initiative to report the different auto accidents, to the insurers without taking into advantage the degree or the extent of damage. There are many insurers who take certain factors in consideration, before accepting and rejecting an application. Insurers also consider the credit history before making any consideration of the policy. There was a new legislature passed by the State, that came into effect from April 2005.This new law prohibited the insurance companies to make rejections, just on the basis of credit information.
B. Termination Period
Any insurance policy of an individual may be cancelled, within 60 days, keeping in account the New York Insurance Law. The time period is offered so that the insurer is able to verify a kind of new brand risk, so that it is able to inform us. If our policy covers the physical damage caused to our vehicles, then we are required to provide a proof of the damages caused to the vehicles. This proof can be in the form of a photograph of the damaged vehicle. However if the vehicle is new, all types of inspections are waived. In cases, where the required inspection is not covered, it results in the suspension of coverage, for that specific time period in which the insurance would have been covered. It is to be noted here, that the insurance company does not charge any amount for the inspection that it carries on.
The policy can also be cancelled in the middle of the term of the policy, if any kind of fraud and misstatement is presented in the policy. Such a fraud and misstatement can also result in criminal prosecution and penalty that may be $ 5000 or more. There is also computerized informational system that works by gathering data from the insurers that deals with information about the past and present policyholders. Once such information system is Comprehensive Loss Underwriting Exchange (CLUE) that can be compared to the credit report agency. When the insurance company, undertakes a policy of rating an agency, it can request a CLUE from us. In case the CLUE is against us, then we can demand a copy of the CLUE, for which there maybe no specific charge.
As per the insurance Law, no application for insurance can be rejected, just on the basis of a geographical location, but an application may be rejected, on the basis of discrepancies on the basis of actual and anticipated loss experience. There are many insurers, who prefer to write policies only in specific regions and avoid certain areas. This is not considered to be illegal, but if this excludes large areas, then certain amount of investigation is required to determine the reason.
The Insurance Law clearly states that there should be no discrimination based on race, creed, color, marital status and even sex. No policy can be refused on the basis of these factors, and any rejection on such a basis shall be considered to be illegal. Application can also not be rejected, just on the basis that we are not the owner of the vehicle, prior to 39 months. There is a certain exception to the rule, which states that, an active service man of the US Armed Forces, who has maintained a valid out of state license, shall be treated as the holder of license in the United States.
E. Factors Impacting Your Auto Insurance Premium
The auto Insurance premium that is paid by us is dependant on many factors that includes statistical analysis, and also historical experiences. Risks are usually grouped, in order to satisfy certain rating purposes, that ensures that the risks are categorized similarly, such as on the basis of age, sex, marital status, and also territories. If any changes occur in the rules of the policy, the changes should soon be notified, as long as the policy is in force. It is the duty of the insurers, to make discoveries relating to the policies that should be reflecting the different rating procedures.
Age is the most important classification, as it is closely related to the losses that are incurred. Young drivers make more policies, as they are known to be driving more than the others. In case the driver, who is the principal operator of the vehicle, had the license for not more than three years, before he made the policy, he will be levied a surcharge that is related to an inexperienced operator. Those who are 25 and above years, pay less policy amounts, than the other younger drivers. Statistics also state that after a certain stage, driving skills also reduce, but it is also seen that the senior citizens benefit a lot from the insurers, as the total miles driven by the senior people is much less than the others.
2. Driving Record
Driving Record also forms a crucial factor, as drivers take into account the driving history, and if the applicant has any history of traffic violation, or conviction or any kind of chargeable offences. Insurers are reluctant to provide insurance, even if the drivers record is clean in the past years. The premiums are also calculated as per the basis of loss experience, and also on the basis of the classifications of the policy. There are also merit-rating plans on the basis of which the policies are classified. These merit-rating plans also modify the premium that is charged. There are many rating plans, in which there is a surcharge of 40 % of the premium amount. Point system is also used in which the surcharges are assigned, that act as violations to the policy.
Insurance Law and Regulations, govern the different premiums that allow surcharges for some specific periods. It can be in the following cases:
— Driving at a speed more than 15 MPH.
— Filing a claim for insurance, that is false.
— Accidents that involve death and injury or loss to any kind of property.
— If the scene of accident is left without filing any report of accident.
— Driving without a license or if any person drives a vehicle, without any proper license.
In the following cases the surcharges are not applicable:
— The driver of the vehicle is not at fault.
— The vehicle got stuck, where it was not legally parked.
— The vehicle was stuck in the rear, and there was no moving violation against me.
— Claims have been made under towing coverages.
— There was a damage caused to the vehicle, but the amount is less than $1000, with no injuries reported.
— We have been able to recover nearly one third of the amount that has been lost due to damage.
We can say, that there can be no surcharge charged, where the premium is said to exceed three times the amount of the highest rated vehicle, that is covered by the policy. Surcharges are usually applicable to the premiums. It is the duty of our insurer to notify us about the exact amount of surcharges that shall be delivered to us. All such information is usually attached in the policy declaration page. Information should also be provided relating to the facts on the refund of the policy, and also the circumstances on the basis of which the refund shall be made. Following are some circumstances, when we can claim a refund of the policy.
— It was established that the surcharge was a mistake, a misinformation and an error.
— The accident, on which the surcharge is levied, is categorized under one of the exceptions of the merit plan of the insurer.
— If there has been a reversal of conviction, in case of a violation that is chargeable.
— A claim file exists, but there is no submission of a claim, for three years or more, after the date of the incident.
3. Credit Information
Credit Information is an important tool for the insurers, who make use of this information, to decide whether to issue a private policy and how to price that policy. All the insurers who make the use of credit policy are required to keep in mind certain points that are considered to be as safeguards:
— If an insurer makes use of any credit information, or any underrating commission, we must be sent a notice that shall disclose the fact, that includes the disclosure of the name of the policy.
— If the amount of premium that is required to be paid is higher, we will be able to receive a notice, that shall advice us on credit related and other factors.
— In case of any error in the credit report, it should be reported to the credit report agency so that corrections can be made to it.