My automobile policy was canceled because I did not pay my premium on time. Is this legal?
Pennsylvania insurance law does not require companies to extend a grace period for premium payments. If payment is not received by your due date, the company is permitted to cancel for nonpayment of the premium.
Can my insurance company cancel my auto insurance policy if I am found guilty of drunk driving?
Yes. In Pennsylvania, if you are convicted of driving under the influence, whether or not you take the Accelerated Rehabilitation Disposition Program (ARD), your driver’s license will be suspended. A license suspension is a valid reason for a cancellation or nonrenewal.
What should I do if I receive a cancellation or nonrenewal notice from my insurance company?
First, contact your agent or your insurance company for specific details regarding the action. Pennsylvania law allows companies to cancel or nonrenew policies for certain reasons. If you still are not satisfied with your company’s explanation, submit the cancellation notice or nonrenewal notice and a complaint form detailing the reasons you disagree with the action to the Pennsylvania Insurance Department. The statement must be received by the Insurance Department within 30 days of your receipt of the notice.
What is a surcharge?
A surcharge is an additional premium charge, for a limited number of years, as a result of violations, suspensions or accidents on the driving record of any driver covered under your policy.
What protection do I have against unreasonable surcharges or policy terminations?
Motorists in Pennsylvania may no longer be surcharged or have their policy nonrenewed if the claim(s) resulting from the accident(s) in the preceding three years do not add to more than $1050 after payment of any deductible, or if the insurance company is reimbursed for at least 60 percent of the total amount of the paid claim.
Can I exclude my spouse or teenager from my insurance policy to lower my premium or avoid being canceled?
Yes. The FIRST NAMED insured may exclude any family member from the policy provided that the person being excluded can prove he or she has auto insurance with another company or the Assigned Risk Plan.
How much is my insurance company required to pay me if my car is damaged?
Your insurance company is required to pay the amount necessary to return the motor vehicle to its same condition just prior to the damage in question. At your request, you may obtain information from the insurance company regarding repair facilities within a reasonable distance of where the motor vehicle is located and where work will be performed in accordance with the written appraisal. You are not required to use any specific repair shop.
Is it legal for my insurance company to nonrenew my auto insurance because I have too many claims?
A company may nonrenew a policy for two or more accidents of certain types within 36 months, when the amount paid in claims for both accidents exceeds $1050 after the insured pays any applicable deductible.
I don’t understand all the terms in my policy. What should I do?
First, contact your agent. Your agent is responsible for servicing your policy, including responding to any questions you may have regarding the terms in your policy. If you purchased your policy directly from the insurance company, a company representative should be able to respond to your questions. After contacting your agent or company, you may choose to write or call one of four offices of the Bureau of Consumer Services of the Pennsylvania Insurance Department. We will be pleased to answer your questions.
What could cause my premiums to increase?
Various factors can change the cost of your auto premium such as: adding or increasing coverages, adding another vehicle to the policy, replacing an older vehicle with a newer one, adding a new driver, changing the usage of the vehicle (driving to work, using for business purposes), increasing the number of miles per year and moving to another area. In addition, your company may have been granted a rate increase since your renewal. Some rate increases are not due to a specific incident or condition of your policy, but rather, it is applied to all policyholders with the company. As a rule of thumb, you should always shop and compare prices. Pennsylvania has a very competitive marketplace for auto insurance.
How can I lower my auto insurance premium?
You may save money on your auto insurance premium by: choosing the limited tort option; increasing your collision and comprehensive deductible or dropping collision and comprehensive coverage on an older car; lowering or eliminating your uninsured (UM) and underinsured motorist (UIM) coverage; rejecting the stacking option of UM or UIM coverage; eliminating income loss or funeral benefits, lowering the medical benefits to the minimum limit requirement and inquiring about special discounts offered by your individual company. Make sure you understand the consequences of not purchasing the optional coverages, increasing your deductible or eliminating coverages prior to making your decision.
What are the risks of changing insurance companies?
You should be aware that an insurance company has 60 days to underwrite and investigate your application. The company has the right to refuse to write or cancel your coverage within the first 60 days. However, the company may not refuse someone because of age, marital status, occupation or any other unfair discriminatory reason.
Why do companies charge different rates for different geographical areas?
One factor used in determining insurance rates is the geographical area in which an individual resides. Based on the company’s losses for that defined area, a company will determine premiums based on accident rates and repair costs for that area.
What is the Pennsylvania Assigned Risk Plan?
Pennsylvania’s Assigned Risk Plan is a program that offers automobile insurance to those who are unable to obtain coverage. All insurance companies writing automobile insurance in the Commonwealth are required to participate in the assigned risk plan. Applicants are assigned to insurance companies in proportion to the amount of business each company writes in the Commonwealth.
Your agent may have recommended coverage through the assigned risk plan because of your driving record, type of vehicle or unobtainable motor vehicle record. You may contact the plan’s customer service office at (401) 946-2800 or toll free (800) 477-6146.
What is the difference between limited and full tort coverage?
Full and Limited Tort are options that you can choose under your auto insurance policy as a result of the Pennsylvania Motor Vehicle Financial Responsibility Law. Limited Tort allows you to save on your premiums by waiving your right to recover certain damages such as payments for pain and suffering unless the injuries you sustain in an automobile accident are defined as serious. Full Tort allows you to retain unrestricted rights to bring suit against the negligent party in an automobile accident.
What is the minimum required insurance coverage needed to own and operate a vehicle in Pennsylvania?
The minimum required coverages in Pennsylvania are:
- Medical Benefits — This pays medical bills for you and others covered on your policy regardless of fault. The minimum limit is $5,000 of coverage. Higher limits are available.
- Bodily Injury Liability — If you injure someone in a car accident, this coverage pays their medical and rehabilitation expenses and any damages for which you are found liable. You must buy coverage of at least $15,000/$30,000. The $15,000 pays for injuries to one person while the $30,000 represents the total available for one accident.
- Property Damage Liability — If you damage someone’s property in an accident and you are at fault, this coverage pays for it. You must buy at least $5,000 of coverage.
- Some companies offer a single limit of $35,000 which meets the bodily injury liability and property damage liability minimum requirements.
Can PennDOT suspend my vehicle registration if I don’t have automobile insurance?
The Department of Transportation can suspend your vehicle’s registration if you do not maintain the required insurance. Additionally, your driver’s vehicle license may be suspended if you operate the vehicle without the required insurance.