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More: Frequently Asked Questions
Why do I need
auto insurance?
Your car has two unique qualities. First, it is
probably one of the most expensive things you own. Insurance
protects your investment and guarantees you a way of coping
with the expense of accidents, vandalism or theft, as well
as securing your financial responsibility to the bank or other
institution lending the money to buy your vehicle.
Second, when you drive, you are operating a powerful machine,
weighing one ton or more and capable of moving at over 100
miles per hour. You are responsible for the safety of your
passengers, your fellow drivers, other people's property,
pedestrians and yourself. Insurance helps you live up to that
responsibility by ensuring your ability to cover the costs
of potential damages or injuries.
You are also required by state laws to be financially responsible.
This requirement is best satisfied through your insurance
coverage. In most states, insurance is a prerequisite to registering
your car. So if you want to drive your own vehicle, you must
be insured.
What does
auto insurance cover?
At the very least, you need the coverages required
by your state to register and operate a vehicle. You should
consider purchasing enough coverage to protect your assets
and ensure that you can be financially responsible if you
injure someone in an accident. You may also want the added
coverage of a Personal Umbrella Policy
(Excess Liability) depending on your assets and need for coverage.
How are rates
set?
All insurance companies use statistical history
to set rates because they reliably predict future claims.
Rates are based on the loss history of all Hartford policyholders,
the amount needed to pay expected claims and our business
expenses. Click here for more information.
Why do
companies charge different rates for different cars, drivers
and situations?
Rates are based on statistics involving a company's
experience with different cars, drivers and situations. For
instance, some vehicles cost more to repair than others, some
are more likely to be stolen and, according to statistics,
some are more likely to be involved in accidents. Some people
drive many more miles than the average, increasing the likelihood
that they'll be involved in an accident. Other drivers have
very little annual mileage, decreasing the likelihood of an
accident.
The more you are on the road, the higher your chances of
being involved in an accident. The same principle applies
to commuting. If the majority of your driving is spent in
commuter conditions (increased congestion, people rushing
to get to work, inattention due to familiarity with roads)
you're more likely to be involved in an accident than someone
who is traveling in off peak traffic hours.
Why do
I need to buy Uninsured Motorist coverage?
Uninsured Motorist coverage protects you and anyone
riding in your vehicle if you are involved in an accident
with someone who has no insurance. Even if your state requires
insurance coverage, there are those who ignore the law. Should
you be injured due to someone else's irresponsibility, Uninsured
Motorist will cover your medical expenses up to the limit
on your policy.
What
is the difference between split-limit and single-limit coverages?
Generally, split-limit and single-limit coverages
apply to Liability and Uninsured Motorist coverages. Liability
consists of Bodily Injury (coverage for the injuries you cause
to another person) and Property Damage (damage you do to another
person's property) in an accident. Uninsured Motorist coverage
pays damages for bodily injury or death caused by an uninsured
driver or hit and run driver who is legally responsible for
the accident.
Split-limit coverage gives you a separated dollar amount
for Bodily Injury and for Property Damage. For example, limits
of 100/300/50 translate to $100,000 per person to a maximum
of $300,000 per accident for Bodily Injury and $50,000 for
Property Damage. A single limit combines the amount of coverage
for Bodily Injury and Property Damage. A typical single limit
would be $300,000; this would be the total amount that could
be paid as the result of an accident. It does not have a per
person or property damage maximum.
Why is the
cost of my auto insurance affected by where I live?
Bear in mind that where you live is only one factor
in determining your insurance rates. For example, statistics
have shown that those who live in more traffic-congested areas
tend to have more frequent but less severe accidents, and
those who live in rural areas tend to have fewer but more
severe accidents.
As I grow older
and drive less, can I save money? Or will my insurance go
up due to age?
In general, lower mileage does mean a lower rate.
But mileage is not the only factor in determining rates. Rates
are also based on age groups and the statistics which show
the likelihood of accidents within these groups. Statistics
show an increase in the number of accidents per miles driven
for those over age 75, which results in a higher rate. However,
some companies do offer a discount to older policyholders
who limit their driving.
What
is a surcharge, how is it calculated and why does it exist?
A surcharge is the amount of money by which your
premium is increased based on Safe Driver Insurance Plan (SDIP)
points assigned to your policy. SDIP points are assigned after
you are involved following in an at-fault accident and/or
one with damage exceeding predetermined amounts, depending
on the state. Most states also allow surcharges for motor
vehicle convictions. A surcharge is usually added to the policy
upon the first renewal following the accident or conviction.
The Safe Driver Insurance Plan (SDIP) was implemented by
the majority of states and insurance companies to fairly distribute
the rising costs of auto insurance among policy-holders. Drivers
with accident-free records pay the lowest possible rates.
Those who have had accidents or convictions pay more through
surcharges added by SDIP points.
Why does my
insurance go up after an accident that's my fault even if
I haven't had one in years? And why would I be surcharged
if I don't have the insurance company pay the claim but choose
to pay it myself?
If you haven't had an accident in years, you have
probably been paying the best rate available from your company.
Once you have an accident, you are no longer eligible for
the best rate due to your accident and because statistics
show that those who have an accident are more likely to have
another. Because insurance rates are based on statistics involving
the company's experience, your rate is likely to be affected
even if you pay the claim yourself - because the statistical
likelihood of your having another accident in which the company
will have to pay has increased.
Why is
it important to report an accident that is not my fault to
my insurance company when the other driver's insurance is
paying for repairs to my vehicle?
Most insurance policies require that you notify
the company when you've been involved in an accident, whether
or not you were at fault. Immediately reporting a claim allows
the insurance company to fulfill its responsibility to the
policyholder by conducting a proper investigation and protecting
the policyholder's interests should there be a need for legal
representation.
Why do companies
give discounts to people who take defensive driving courses?
Defensive driving courses refresh old skills and
teach new ones to help prevent accidents. The driver's initiative
in taking steps to improve driving skills combined with his
or her increased awareness of defensive driving skills leads
many companies to offer a discount.
Why do companies
give discounts when you have both auto and homeowners coverage
with them?
When people have both auto and homeowners with the same
company, both parties win. The company wins because it saves
money. The initial cost of writing a new policy is very high.
Companies don't generally show a profit on a policy for about
three years. (This also explains why many companies give customers
a credit for renewing their policy.) Another factor is that
people who have both policies with the same company are more
likely be long-term policyholders, which is cost-effective
for that company. The policyholder wins because of the discount
(and usually an additional discount upon renewal) and the
convenience of having to deal with only one company.
If a friend
is driving my vehicle and is at fault in an accident , whose
insurance will pay for damages? Will I be surcharged?
If someone uses your vehicle (with your permission) and
has an accident, your company will pay for damages he/she
causes. However, in states with No-fault coverage, the insurance
company of the person using the vehicles (if the person is
insured) would pay for that person's injuries. You would not
be surcharged.
If someone uses your vehicle without your permission (i.e.
it is stolen), you are not legally liable for any damages
they may cause, and there is no liability coverage afforded
by the policy. There is however, coverage for any damage to
your auto provide by your comprehensive and/or collision coverage.
You would not be surcharged due to any damages resulting
from theft of your auto.
Why do
accidents that aren't my fault render me ineligible for insurance?
Statistics show that those who have a number of
not-at-fault accidents are more likely to continue to have
accidents. Also, at some point consideration must be given
to whether the driver involved in the not-at-fault accidents
is contributing to the cause of the accidents.
Why does
my spouse have to be listed on my policy?
A spouse living in the household is automatically
insured because of the way the policy provisions are written.
Also, legally, if your spouse is insured separately with lower
limits than yours and has an at-fault accident, your insurance
company may be held liable for amounts over your spouse's
coverage to the limit of your policy. For example, if your
spouse carries $100,000 liability and you carry $300,000 and
your spouse has an at-fault accident resulting in $150,000
in damage and injuries, your insurance company can be held
liable for the $50,000 your spouse's policy does not cover.
This is a liability for which your insurance company is not
collecting premium because the unlisted spouse is not included
in the rating of the policy.
Why do I have
to list young drivers on my policy, even if I don't allow
them to drive my vehicles?
Automobile policies are written to automatically
cover any licensed relatives living in your household. Therefore,
coverage is afforded to them, via your policy, regardless
of whose vehicle they are operating.
For example, your son is away at college and has an accident
while driving a friend's vehicle. He is covered by your policy
for damages for which he is legally liable. So, unless household
members have vehicles registered and insured in their own
name, they need to be listed on your policy. Many companies
offer credits for young drivers such as good student and driver
training credits.
Does the AARP
Insurance Program have local agents?
No. With the exception of claims offices, all service
is provided either through the mail or by phone on toll-free
numbers.
How are claims
filed and questions answered?
For both automobile and homeowners insurance program
claims, call our toll-free claims hotline 1-800-243-5860.
Claims representatives are available 24 hours a day, seven
days a week. The claims representative provides step-by-step
guidance through a procedure that keeps paperwork to a minimum.
The program features or coverage descriptions
above are general and for information purposes only. Actual
claim coverage in the event of a loss would be determined
by your policy's terms and conditions.
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