Most policies do not cover loss or damage resulting from:

• mechanical, structural or electrical failure
• depreciation, wear and tear, and rust
• lost wages or income because you cannot use your car
  unauthorised modifications to the car from the maker's specifications
• Also, most policies will not cover loss or damage if you drove your car when it was in an unroadworthy or unsafe condition, and this contributed to the accident.

My car insurance policy was canceled because I did not pay my premium on time. Is this legal?

In general 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 (DUI)?

Yes that is possible. If you are convicted of driving under the influence (DUI), your driver's license will be likely to be suspended. A license suspension maybe a valid reason for a cancellation or nonrenewal.

If you have a DUI offence, or more than 1 driving offence per year of driving history to a maximum of four offences, then you will have difficulty getting car insurance. If you have had an 'at fault' accident within the last 12 months, chances are you will have difficulty also.

Can my insurance company refuse a claim?

Your insurance will not cover damage if you let someone drive the car who:

•  
  • was over the limit or under the influence of drugs
  • did not have a driving licence
  • was not authorised under the policy to drive the car.

What should I do if I receive a cancellation or nonrenewal notice from my insurance company?

First, contact your agent, broker or your insurance company for specific details regarding the action. The law allows companies to cancel or nonrenew policies for certain reasons. If you still are not satisfied with your company's explanation, submit a statement detailing the reasons you disagree with the State Government appropriate consumers services department.

Can I exclude my spouse or teenager from my insurance policy to lower my premium or avoid being canceled?

Yes, you should be able to. The FIRST NAMED insured may exclude any family member from the policy provided that the person does not drive the vehicle.  If they drive the car and have an accident, you risk not being covered.

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?

Yes.

I don't understand all the terms in my policy. What should I do?

First, contact your agent or broker. 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 Consumer Services in your state.

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.

Direct questions on increases to your agent or company.

Why does my premium go up when I have a excellent driving record - is it fair?

Even if your premium is lower because of your good driving record, the costs of car repairs, medical care, and other services associated with accident claims inexorably increase as the years go by, and everyone gets billed for this when their policy comes up for renewal. After all, the theory of insurance is that the cost of claims is spread among all policyholders. While you may not have had any accidents over a long period, you still have the protection, and if you have a claim this year, your insurer will pay the cost at today's values. And as long as you stay claims-free, you have the satisfaction of knowing that you are getting the benefit of your excellent driving record.

How can I lower my auto insurance premium?

You may save money on your auto insurance premium by choosing to limit your coverage.  Make sure you understand the consequences of not purchasing the optional coverages, increasing your deductible or eliminating coverages prior to making your decision.     Some of the factors that will affect the rate you pay include:

• your age and gender,
• your driving history,
• the type and age of your car,
• the existence of a car alarm or other anti-theft device,
• the distance you live from work or home,
• the number of years that you have had your driver license, and the existence of safety devices (such as air bags or anti-lock brakes).

These are just some of the factors that can affect your insurance premium.  You'll find a more complete list and explanations of car insurance premium factors and possible premium discounts here. You should also check with your agent or broker about any additional discounts offered by your insurance company to be sure you are not paying more than you have to.
 

 

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 if I Finance My Vehicle?

If you finance your car, you are likely to be required to have comprehensive car insurance.   However, the  lending institution cannot require you to buy insurance from a particular insurer.

What is Agreed Value?

You can remove the uncertainty of how much you will be paid if the car is destroyed. By agreeing to the value of your car up-front you will know what you will be paid if the worst happens. The alternative is to the negotiate at the time of the accident. Rest assured this is a role an insurance agent or broker helps you with.

How can I Protect my Rating?

Some insurers will protect your no claims bonus. This means that the premiums you pay remain stable - even if you make a claim on your policy.

What happens when you make a claim?

The best insurers have kits which you can keep in your glove box ready for any unforseen circumstance. You should always resolve this issue before you finalise your policy.