- Q: What is Auto Insurance?
A: Auto insurance is an agreement between you and your insurance company where the latter provides for the financial loss in case of an accident. In return, you have to pay premium for it. The agreement is time-bound, maybe six months or one year and you have to renew the contract once the asserted period is over. It gives medical, property and liability coverage.
- Q: Can the insurance company cancel your insurance if you file only one claim?
A: There is no provision of cancellation against just one claim of policy in either home or auto insurance. Only if gross negligence is proved on your part while driving it will surely cost you high rate of premium. The percentage raised is very ambiguous because no company has clear rule for it and they consider many things in deciding the rate. Your auto insurance is at risk only when you register many at-fault accidents within a short span of time.
- Q: Why an insurance company asks for your credit card related information or any previous bankruptcy claim?
A: There is no concrete logic behind your financial status. Your driving ability is a criterion on which most auto insurance companies will dwell before finalizing a contract. The head of most companies argue that a driver with bad crediting habits very often is not a good policyholder. Further, they opine that careless people are more accident-prone and accident begets claim. So they follow the policy of 'Once careful always beneficial'.
- Q: In case you forget to pay your premium on time, will your policy be canceled?
A: Individual companies have set their own rules to deal with the problem of delay in payment. It is also governed by the state policy of a particular region. Usually, part 'F' of any policy deals with the subject of cancellation and termination. Cancellation requires primary intimation to the policyholder. Often it has been seen that the policy is reinstated by paying the due premium along with some penalty.
- Q: Does your life partner's poor driving record increase the premium amount?
A: Insurance of automobile takes under consideration every member of your house who has a driving license and who is named under the policy. This covers even your spouse. If your life partner is not a good driver, it will surely affect your policy coverage. In a case where your spouse needs a separate policy, he or she will not be benefited with your insurance claim. Schemes such as multiple policy discounts may help you in keeping the premium rate down.
- Q: If you do not have auto insurance and you meet an accident where you were not at fault, will the insurance company of the party at fault pay the repair expenses?
A: Yes, provided the party at fault at least have basic liability insurance. The compensation involving an accident without auto insurance varies from state to state. In some places, it is partially compensated by the defaulter policy, but not all states follow it. The driving person is advised to insure his or her vehicle at the earliest. It is a cognizable offense to drive without auto insurance. In case of a shared fault you would get compensation, only if the other driver's insurance policy also carries the uninsured motorist insurance feature.
- Q: How do I proceed for filing a claim?
A: You must keep some important points in your mind while filing a claim. Inform your policy agent at the earliest; the exact nature of the accident, minor or major and whether you were at fault or not. Take his help in arranging the documents the company may demand. Be precise and discreet while filling the form of claim and take-in every detail. Make sure, if your policy is time bound. Sometimes you might require giving repair estimate of your car also.
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