Auto Insurance FAQs

Are there any specific time limits for an insurance company to pay for collision or comprehensive claims?

Some states have specific time limits for the settlement of claims. In general, insurance companies should pay all claims in a prompt and reasonable amount of time. However, what constitutes “prompt and reasonable” may vary from claim to claim. Claims that require special or extended investigation may take longer to resolve. Inclement weather conditions often cause an increase in the number of claims filed and that can slow the process down as well.

May I keep my auto if I have a collision, limited collision or comprehensive claim and my insurance company declares it a total loss?

Your insurance company has the option to take title to your auto when it issues payment on your claim. The insurer is entitled to any salvage value your auto may have. You can, of course, negotiate with your company to purchase your auto for the agreed salvaged value.

Can the insurance company pay me less than Blue Book for my totaled vehicle?

Yes.The Blue Book is only a guide. The company is required to pay you what your vehicle was actually worth (as a used car) the moment before the crash . The adjuster will find out how much used cars like yours (same make, model, and year) are going for in your area . It’s a good idea for you to independently research the value of your car too.

What should be included in the amount the company pays me for my totaled car?

The value of your vehicle. You should also verify how your state addresses sales tax, title & license fees for when you replace a totaled vehicle.

The adjuster recommended a specific body shop. Can I use a different shop?

You can have it repaired wherever you choose. But no matter what shop you choose, the adjuster will base your claim payment on market price for the repairs and pay the local average rates for parts & labor.

Who pays for the rental car while my car is in the body shop?

Liability Claim

When the claim is against the other driver’s company , the other driver’s company should pay your rental car cost for a reasonable length of repair time.

If the car is totaled, many companies pay for your rental as a courtesy, but they are not required to do so — your right to a rental ends once a settlement has been offered.

Comprehensive/Collision Claim

When it’s a claim against your own policy , your company will pay if you paid a premium to include rental reimbursement coverage in your policy. Most policies have a dollar limit for rental payments; your rental car rights are spelled out in your policy.

I got $500 to replace my stereo. Can I use the money for something else?

Liability Claim

If you are collecting from another driver’s company, you’re entitled to the cash. Do what you want with it.

Comprehensive/Collision Claim

Your own company may not pay the full replacement cost until you actually buy the new stereo. And if the stereo did not come with the car, you may need to show the company receipts to prove you had it in the first place.

The company wants to charge more than the agent quoted. Is that legal?

Probably. The company makes the final decision about your rating classification after it reviews your background information.

It is not legal for the agent intentionally to quote you an unrealistically low price to get your business. The practice described above is called low-balling and it can be very hard to prove that’s what happened.

Misquotes usually turn out to be the result of a mistake by the agent or incorrect information on your application. You can protect yourself by completing the application accurately and keeping a copy.

My son has left home for college. Do I still have to include him on my policy?

Yes.Insurance companies recognize that when college students come home they have access to the family car. But the company might reduce the premiums if the college is more than a specific distance (100 miles, for example) from your home.

I’ve had 2 accidents that were not my fault. Can the company raise my premium?

Probably.Premium increases are always more likely when an accident is your fault. But it’s a good chance the company has the right to raise your premiums if you have a second, not-at-fault accident within a policy period.

Sometimes I let a friend drive my car. Is she covered by my policy?

Probably. Almost all liability policies cover a licensed driver who drives your car with your permission. In general, your liability insurance also covers you if you drive a friend’s car and the friend is not insured .

But beware: Some policies state specifically that no other person is covered when driving your car.

The insurance company put the bank’s name on the check for fixing my car. Why?

Because your car is collateral for your loan, the bank (or whoever is financing the car) has an interest in making sure the money is used to repair the car and not for something else.

An uninsured driver demolished my car! Who pays?

Your collision coverage or your uninsured motorist property damage coverage, if you bought it. Either way, you’ll have to pay a deductible.

I’ve been sued by the other driver. Will my policy cover that?

Yes.Your liability insurance covers lawsuits. Your company has a duty to provide a lawyer to represent you in lawsuits accusing you of negligence in driving your car . If you receive a summons or notice of a lawsuit, notify your company right away. Although the company pays for the lawyer, the lawyer’s ethical duty is to represent your best interests. There is no policy limit on how much the company must pay the lawyer to represent you.

If the case is settled or there is a judgment against you, the company will pay up to the policy limit . But if the court judgment or settlement is more than your policy limits, you will have to pay the difference. The company may refuse to defend you if you are accused of intentionally injuring someone or intentionally damaging property.