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Sometimes, consumers can feel at the mercy of insurance providers. However, regardless of the difficulties that occasionally come with car insurance, every policyholder has rights.
Whether it is filing a claim or trying to find affordable coverage and premium rates, consumers can have a difficult time utilizing the auto insurance they purchase.
While an auto insurance customer has rights, they also have responsibilities. Just because your state insurance department has created laws protecting consumers, you still have certain responsibilities you must adhere to for those laws to actually work.
Once you understand your responsibilities with your insurance providers, you can then fully appreciate and use the rights and laws set in place to protect you.
Responsibilities as a Policyholder
Every insurance provider will have a list of responsibilities that policyholders must follow in order to have their rights protected. Before you invoke those rights, make sure you fully understand what your responsibilities are.
If you happen to be unsure about what you have to do to be lawfully protected, contact your insurance provider.
In addition, you can find all of your legal responsibilities in your policy contract you signed with your provider.
The best way to ensure that the laws rightfully protect you is to pay your auto insurance premiums in a timely manner.
Paying your premiums will satisfy for insurance provider’s demands and guarantees you are covered in the case of an accident or another event that causes loss or damages to property.
In addition to paying your monthly premium, every driver in the United States must follow their local state’s financial responsibility laws. Basically, financial responsibility means acquiring the state’s minimum level of liability insurance for vehicles.
Every state requires drivers to have auto insurance on their vehicles.
Meeting your state’s financial responsibility laws is the most important step in making sure your rights are still protected.
If you lapse in coverage, or purposefully fail to acquire the state minimum for auto coverage, the state laws will not protect you.
Auto insurance, although required in every state, is a privilege. Purchasing a vehicle takes effort and hard-earned money, and being financially responsible for your purchase is a responsibility and a privilege.
Being a responsible driver is a guaranteed way to maintain your personal rights as an auto insurance consumer.
Every state will have a Department of Insurance — or something close to it — which will provide citizens with a bevy of information.
For example, the Washington State Office of the Insurance Commissioner provides a bulleted list of rights and responsibilities for people who live in the state.
Check with your local state department for further information.
Rights as a Car Insurance Policyholder
Once you have satisfied your personal responsibilities of owning a vehicle and acquiring auto insurance, you will have a series of rights that every state upholds for its consumers.
For specific information regarding your rights as an insurance consumer, you can check with your local state department of insurance.
For the most part, each state has passed similar laws covering rights of its citizens.
Right to Not Be Declined Insurance Based on Discriminatory Factors
Every state in the United States has created laws prohibiting insurance companies from denying customers coverage based on discrimination.
If for any reason you are denied coverage because of your gender, age, religious affiliation, sexual orientation, race, or age, the insurance provider is breaking the law.
Although some of these factors may raise your insurance premium rates, you cannot be denied coverage because of them.
For example, the Massachusetts Office of Consumer Affairs and Business Regulation provides a detailed list of rights for consumers.
For further information regarding your right to not be denied coverage based on discriminatory factors, contact your local state department.
Right to Cancel Insurance
Regardless of what insurance providers may suggest, you do have the right to cancel your insurance policy at any time. If you wish to shop around for cheaper insurance, go right ahead.
Many states have written a Consumer Bill of Rights that outlines your rights specifically, and many of these bills handle the issue of canceling insurance.
If you find cheaper coverage, you may cancel your policy and even receive a refund for any unused premium payments.
Just remember, if you wish to cancel your current insurance policy, you must have a new policy in place immediately after cancellation. If not, you have fallen into a lapse of coverage and are breaking your state’s financial responsibility laws, which is not a good thing.
If you acquire new insurance, you are perfectly within your legal rights to cancel your current policy no matter what your current provider says.
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Right to Not be Denied Coverage Based on Credit History
Some states have passed laws requiring insurance providers to base their acceptance of new clients not just on credit history, but on other factors as well. Check with your state department of insurance to be sure.
If you happen to live in a state that requires insurance providers to base their acceptances on a variety of factors, make sure they do.
If you are told you have been denied coverage because of credit history, ask the agent if there are any other reasons you were denied coverage.
If the agent says no, then the insurance company is breaking the law and your rights as a consumer.
Some states that force insurance companies to go beyond credit history in determining new clients are Texas and Massachusetts. Both states outline the law in their Consumer Bill of Rights.
The Texas Department of Insurance provides a thorough explanation of the various components found in their Bill of Rights.
Right to Explanation of Denied Coverage
Almost every state has passed laws requiring insurance providers to tell you why you were denied coverage. Sometimes you will need to ask them why, so be diligent and proactive when dealing with agents.
Most of the time, an insurance company will not want to get into the details of why they denied you coverage, but you do have a right to know, and you should want to find out.
If you can fix the reasons why you were denied coverage, you may be able to find auto insurance a lot easier in the future.
When shopping for auto insurance, be sure to check why you might have been denied coverage, because errors can occur.
For example, you may have an inconsistency in your credit history or driving record that causes the insurance company concern, so they deny coverage.
Once you find out, it is within your right to correct errors you think may exist and reapply for coverage. If you can prove the error is indeed an error, the insurance company may provide coverage.
Right to Acquire Driving Record
Based on the right to have denial of coverage explained, you also have a right to acquire your driving record. Every state department of motor vehicles offers citizens the ability to see your driving record.
You may want to pursue this course, especially if you think there is an error on your record.
If you have speeding tickets from a few years back, they may still appear on your record. You may be able to have these removed from your record if enough years have passed.
Most insurance companies use driving records to dictate premium rates, and sometimes to deny coverage, so be sure your driving record is accurate.
Right of Notice of Cancellation or Non-Renewal
Every insurance company holds the right to cancel your policy or deny you a renewal policy. Regardless, you do hold the right to receive a notice of that cancellation before it happens.
If you happen to have your coverage cancelled and were not informed prior to, the insurance company has violated state law and has also placed you into a lapse of coverage.
Not being notified of cancellation is a serious violation of your rights.
Each state has a different time frame in which an insurance provider must give you notification of cancellation, so check with your state department.
Most of the time, the insurance company has anywhere between 10-20 days to provide notice.
Remember, insurance companies can cancel your coverage in the middle of premium payments, but it takes very specific circumstances for that to happen, like a lapse in premium payments or if your license was suspended.
Otherwise, you should never have your policy cancelled early. If that occurs, ask your provider why your policy is being cancelled and be sure they are not violating your rights.
Right to Swift Management of Claims
When you have filed a claim with your insurance company, you should be guaranteed that they will fulfill the claim in a timely manner.
If you file a claim after an accident that was not your fault, your insurance company has a responsibility to follow through with claim procedures quickly.
If they are dragging their feet, you have a right to inquire about the state of the claim. Most states have a deadline for insurance companies to pay claims, so check with the state department.
In addition, if you file a claim and the insurance company denies your claim, you have the right to know why your claim was denied. Most states actually require written explanations for why a claim is denied.
There are more rights for consumers, and many of them vary from state to state.
For further information about your auto insurance rights, the Insurance Information Institute has a variety of resources available for the average consumer.
In addition, always check with your local state department of insurance to be sure what rights you have.