Auto Insurance Questions & Answers
A: This is called a misquote. Determining your premium depends on many factors, including 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 agent makes a mistake in applying the company's rating system. Auto insurance misquotes can happen when your application information differs from actual driving record.
Companies ask states' motor-vehicle divisions to verify the records of drivers they insure. If you told your insurance agent you have a perfect driving record, and you don't, your insurance company will charge higher premiums than your agent quotes.
To avoid misquotes, provide accurate information about your driving record and any other facts affecting 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.
A: The premium you pay is a direct reflection of your driving record for the past three years. Insurance companies order driving records from the Oregon DMV and from other states where you've been licensed. Statistics show that drivers with tickets and accidents are more likely to have accidents than drivers with clean records.
A: Many companies won't insure you if you live with a relative who has a poor driving record. If your teenager has a poor driving record, you may have trouble getting a preferred rate because he or she is defined as an "insured" under your policy.
Some companies will exclude this person by name from the insurance policy. Many companies won't insure anyone in the family unless every driver in the household meets their requirements.
A: Insurance 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, DUI, etc.)
- Credit history. Do you have bad credit? Have you filed for bankruptcy?
A: Most 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.
A: Sometimes the value of a car is 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.
A special type of insurance called "Guaranteed Auto Protection" or GAP, can be purchased when you buy a car and 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 available as an endorsement to your regular auto insurance. Your agent can advise you as to whether your company offers the coverage. Auto dealers, or your lender, may also offer GAP insurance at the time that you buy the vehicle.
Be aware that GAP coverage might not pay off your entire loan balance, as there are items that GAP insurance will not cover. The way the GAP policy or endorsement arrives at the value of the vehicle and the way the primary insurance arrives at the value of the vehicle are sometimes determined by different methods.
In addition, GAP policies usually do not pay for the deductible from the primary auto insurer, missed payments or late fees. Depending on the percentage of the vehicle value to the loan balance, GAP may only pay a portion of the loan. There could be other limitations, so check your policy carefully .
A: Your company must send you notice at least 10 days in advance of canceling your policy for nonpayment. If your policy has been canceled or "non-renewed" for a reason other than nonpayment, the company must give you at least 30 days' advance notice. An explanation of the reasons for the cancellation or non-renewal must be part of or accompany the notice.
Under Oregon law, insurance companies must be able to prove notice was sent but not that you received it. It's your responsibility to tell your insurance company if your address changes. Keep track of your payments.
A: Comprehensive coverage typically covers damage from fire, theft, explosion, glass breakage, animal collision, and other incidents not covered by collision coverage. Collision is usually defined as colliding with another object or overturning.
Most auto policies have lower deductibles for comprehensive coverage than for collision coverage. If you have an older car that may cost more to repair than it's worth, consider the following to save money:
- Raise your deductibles.
- Drop your collision or comprehensive coverage.
- Drop both your collision and comprehensive coverage.