Alaska Auto Insurance Regulations
Coverages in an Auto Policy
Liability Coverage
Liability coverage, the only coverage most people are required to carry under Alaska law, provides protection from claims by others for damages that might arise out of an accident for which you are found to be legally responsible. The owner or operator of a vehicle registered for use on the road must have liability coverage with minimum limits of $50,000 per person for Bodily Injury, $100,000 per accident for Bodily Injury, and $25,000 per accident for Property Damage. Bodily Injury is the portion of your Liability coverage that pays for expenses such as medical costs, loss of income, and funeral costs of others who are injured or killed as the result of your negligence. Property Damage is the portion of your Liability coverage that pays for expenses to repair or replace the property of others which is damaged as the result of your negligence.
Alaska Statute 28.22.019 requires that you must have a copy of your policy, certificate of self-insurance, or identification card in your immediate possession when you are driving a motor vehicle. Additionally, if you are involved in an accident that results in bodily injury, death, or property damage exceeding $501, you will be required to show proof of insurance. Failure to have insurance can result in the suspension of your driver’s license. Before your license can be reinstated, proof of financial responsibility must be supplied and reinstatement fees must be paid. An SR-22 filing, which provides proof of financial responsibility, may be obtained from your insurance company and must be filed with the Division of Motor Vehicles for three years following an accident in which the driver was uninsured.
Physical Damage Coverage
Physical Damage coverage is not required by Alaska law, but may be required by your lender if your vehicle is financed. Physical Damage coverage provides a method of taking care of damage to your vehicle and is commonly divided into Collision and Comprehensive coverages. Collision coverage pays for the replacement of your vehicle or the repair of damage to your vehicle that is caused by colliding with an object or by overturning. Comprehensive coverage, sometimes called “other than collision” coverage, pays for theft of your vehicle and types of physical damage not included in your collision coverage, such as broken glass, fire, collision with a bird or an animal, or vandalism.
You will be required to pay a deductible when you file a claim for physical damage coverage. A deductible is the portion of a loss that you agree to retain in the event that you have a covered loss. In the event of a covered loss, the insurance company will pay for any covered loss less the deductible. If you have a $250 deductible and suffer a $1,000 covered loss, the company will pay $750 and you will be responsible for the remaining $250.
Uninsured/Underinsured Motorists Coverage (UM/ UIM)
Uninsured/Underinsured Motorists Coverage, like Liability coverage, is divided into Bodily Injury and Property Damage sections. This coverage is designed to take care of your injuries and damage to your property. If you are in an accident and the other party is found to be responsible, but does not have insurance or does not have enough insurance to meet your expenses, this coverage is available to meet your needs. This coverage also applies to hit-and-run situations or when your vehicle is hit while parked and you are unable to determine the identity of the other party.
When you complete an application for auto insurance, you must be presented with a written offer for this coverage. Insurers must offer you a variety of coverage choices, including limits equal to the Liability coverage which you selected, as well as several optional limits up to $1 million per person/$2 million per accident for Bodily Injury. You must be offered Bodily Injury and Property Damage as separate coverages. You have the option of selecting both Bodily Injury and Property Damage at any of the available limits, rejecting both Bodily Injury and Property Damage, or selecting one coverage and rejecting the other. If your selection or rejection is not verified by your signature, Alaska law requires that the company issue your policy with coverage at limits matching your Liability coverage. If you reject this coverage, the company is not required to make another offer at renewal, but you may request that the coverage be added at any time.
Medical Payments
Medical Payments is an optional coverage that pays hospital, medical, and funeral expenses for you or others who are injured or killed while in your vehicle. Coverage also applies to you, your family members, or others insured on your policy when they are in another vehicle or when they are injured by a vehicle as a pedestrian. Unlike Bodily Injury Liability coverage, payment under this coverage can be made without a determination of negligence.
Rental Reimbursement Coverage
Rental Reimbursement coverage repays you for the cost of a rental car only when your vehicle is disabled after a covered loss. Reimbursement may be limited to a specific amount per day and for a limited number of days.
Towing and Labor Coverages
Towing and Labor Coverage, sometimes called Roadside Assistance or Emergency Services, pay for the cost of towing your vehicle to a repair shop. One way that towing costs are often covered is by providing up to a specific amount per use, but there may not be a limit indicated on the number of times this coverage may be used. This coverage may also provide payment or reimbursement for other types of assistance provided by a mobile service unit. Examples of the types of services that may be covered are locksmith, delivery of a part such as a fan belt, the cost to change a tire or jump start your vehicle.
Stereo Coverages
If you have added audio equipment to your vehicle, you may want to check with your agent or insurance company to see if you need this additional coverage. Most policies will only cover the theft of an audio system that was installed in your vehicle by the factory or that is permanently installed in the dashboard. Theft of CDs or cassettes may be included in this coverage or added as a separate coverage.
Things to be Aware of Regarding Auto Insurance
Deductibles
A deductible is the amount of money you pay as part of any loss you suffer. When shopping for collision and comprehensive coverage, you should consider your deductible. For example, if you carry collision coverage with a $200 deductible and you suffer a $500 covered loss, you would receive $300 from your insurance company and you would be responsible for the remaining $200 of the claim.
If you choose a higher deductible on your comprehensive or collision coverage, your premium will be lower. However, you will need to pay more in the event of a claim.
The Alaska Automobile Insurance Plan
If you are unable to obtain automobile insurance from a private insurer, you may be eligible for coverage under the Alaska Automobile Insurance Plan. The plan assigns applicants to private insurance companies doing business in Alaska. For more information, call AIPSO at 1-800-227-4659.
Motor Vehicle Reports
For automobile and boat insurance, most insurance companies order a Motor Vehicle Report ( MVR) from the Division of Motor Vehicles for all drivers listed on your insurance application. The MVR will be used to verify any traffic violations, license suspensions, or revocations. Many auto insurers require you to name all licensed drivers in your household even if you do not intend to allow them to drive your vehicle. Your company may contact your previous insurance carrier and/or commercial reporting agencies. These organizations might contact you, your family members, neighbors, or employer.
Insurance for Rental Vehicles
Alaska Statute 21.89.020(f )(2)-(3) requires that your policy provide liability coverage at the minimum required liability limits when you rent a vehicle. Your policy must also extend your collision and comprehensive coverage to a rental vehicle. If you do not carry collision and comprehensive coverage, the company must provide the option for you to purchase coverage for physical damage to a rental vehicle.
Named Driver Exclusions
Before a company decides to insure you, it must consider the driving records of all members of your household. If one family member has a poor driving record, it could affect the auto insurance premiums for the whole family. Alaska law gives the named insured the right to specifically exclude a family member from coverage under the insurance policy. This is referred to as a named driver exclusion.
While it may be tempting to exclude a driver with a poor driving record from your insurance policy in order to reduce the premium (for example, if the driver is a student away at college for a large portion of the year), it is important that you be aware of the risks associated with the exclusion. Once a driver is specifically excluded from the insurance policy, any damages caused by that driver will not be covered by the insurance company. In the example above where a young driver is away at college, excluding the student from the parents’ insurance policy means that the student could not drive the parents’ car while home on vacation without becoming an uninsured driver. Similarly, the student would run the risk of being uninsured while driving any other car, such as one belonging to a friend. If an excluded driver drives without insurance, they would not only be in violation of the law, they would be exposing themselves and the named insured to a large, uninsured, liability.
What Affects the Price of Auto Insurance?
Classification
When determining the rate for an auto insurance policy, insurers separate drivers into categories called classifications. Drivers are classified based on a number of different characteristics, including but not limited to age, sex, driving record, type of vehicle, gaps or lapses in insurance coverage, amount of coverage purchased, and annual miles driven. History has shown that drivers with certain characteristics, such as a poor driving record, have a greater chance of being involved in an accident, and the drivers in those classifications must pay higher rates. While some of the classification criteria (such as age and sex) are out of your control, others, such as driving record and type of vehicle driven, are within your control.
Insurers have the right to decide what types of drivers they wish to insure, as long as they apply their criteria consistently and fairly. The eligibility criteria an insurer uses to select the drivers it is willing to insure are referred to as underwriting criteria. Some insurers specialize in adult drivers with clean driving records, and will turn down an application from a teen-aged driver, or an adult who has had several serious violations. Other insurance companies specialize in high-risk drivers and may accept individuals who have had several accidents or violations. The rates offered by the different insurance companies will vary, based at least partially on their choice of drivers to insure. If you are turned down by one insurance company, you should apply with another, since the two insurers may have different underwriting criteria. If you had a poor driving record in the past but it has improved over the last few years, it may be worth shopping around for another insurance company that has lower rates.
If you have trouble finding any insurer willing to sell you a policy, you should contact the assigned risk plan at the number given previously.
Discounts
Discounts are awarded because the insurance company sees certain types of drivers as “better risks.” Before purchasing auto insurance, be aware of discounts you may qualify for that are offered by your company. Here are some discounts to look for:
* Multiple Vehicles—Most insurance companies offer a discount to customers who insure more than one vehicle with their company. Industry statistics show that individuals and families insuring more than one vehicle have better than average claims experience.
* Driver Education Courses—Discounts for driver education courses are targeted primarily at younger and older drivers. Individuals may be able to lower their auto insurance rates by voluntarily participating in a state-approved course.
Alaska law requires companies to give a discount to any primary driver who is over age 55 and who voluntarily completes a motor vehicle accident prevention course approved by the Division of Motor Vehicles. The discount must be applied for the three years following the successful completion of the course.
For further information on driver education programs, contact the Division of Motor Vehicles Driver Improvement Bureau at (907) 273-2223.
* Good Student—Many insurance companies have found that students who earn a B average or better tend to have fewer accidents. For this reason, many companies offer a good student discount.
* Anti-Theft Devices—Devices or systems that deter theft or vandalism may also lower claim costs. Many companies offer discounts for anti-theft devices such as security alarms, combination door locks, etc.
* Auto/Home Package—Insurance companies may offer a discount if they insure both your vehicle and home.
Auto Insurance Claims
Be familiar with your automobile insurance policy before you need it. Read the policy thoroughly so you know what is covered, how much is covered, and what is excluded. Knowing in advance what to do in the event of an accident can help you avoid expensive mistakes.
Before You Have a Claim
* Carefully review your policy so you know how much liability coverage you have. This is the coverage that pays for damage you cause to other vehicles or injuries to other people.
* Know if you have collision and/or comprehensive coverage. Know what your deductible is.
There are several steps you should take after an accident to help you avoid expensive, time-consuming mistakes. Be aware that Alaska law requires you to report to the police any accident that results in death, injury, or damages of $2,000 or more.
Filing a Claim
There are several steps to follow when filing a claim if your car is involved in an accident, damaged by fire, flood, vandalism, or stolen:
* Telephone your producer or company as soon as possible, even if you are away from home or if someone else caused the accident. Ask your producer what forms or documents will be needed to support your claim. Your company may require a proof of loss form, as well as documents relating to your claim, such as medical receipts, auto repair bills, and a copy of the police report.
* Supply any information your producer or company needs promptly. Cooperate with your insurance company in its investigation, settlement, or defense of any claim.
* Keep records of all your expenses. Emergency expenses you incur as the result of an automobile accident may be covered under your policy.
* Keep copies of all your paperwork. Store copies of all your accident-related paperwork with your other important papers.
DCED Logo
Quick Links
General Division of Insurance Information
Who to Contact Regarding...
Consumer Information
Frequently Asked Questions
Agent (Producer) Licensing
Company, Surplus Lines Forms and Information
Statutes, Regulations, Bulletins, Orders
Purchasing Groups and Risk Rention Groups
Rates and Forms
Related Links
Juneau Office
9th Floor State Office Bldg., 333 Willoughby Avenue 99801
PO Box 110805, Juneau, Alaska 99811-0805
(907) 465-2515 Fax (907) 465-3422 TDD (907) 465-5437
Anchorage Office
Robert B. Atwood Building
550 W. 7th Avenue, Suite 1560, Anchorage, Alaska 99501-3567
(907) 269-7900 Fax (907) 269-7910 TDD (907) 465-5437
Liability Coverage
Liability coverage, the only coverage most people are required to carry under Alaska law, provides protection from claims by others for damages that might arise out of an accident for which you are found to be legally responsible. The owner or operator of a vehicle registered for use on the road must have liability coverage with minimum limits of $50,000 per person for Bodily Injury, $100,000 per accident for Bodily Injury, and $25,000 per accident for Property Damage. Bodily Injury is the portion of your Liability coverage that pays for expenses such as medical costs, loss of income, and funeral costs of others who are injured or killed as the result of your negligence. Property Damage is the portion of your Liability coverage that pays for expenses to repair or replace the property of others which is damaged as the result of your negligence.
Alaska Statute 28.22.019 requires that you must have a copy of your policy, certificate of self-insurance, or identification card in your immediate possession when you are driving a motor vehicle. Additionally, if you are involved in an accident that results in bodily injury, death, or property damage exceeding $501, you will be required to show proof of insurance. Failure to have insurance can result in the suspension of your driver’s license. Before your license can be reinstated, proof of financial responsibility must be supplied and reinstatement fees must be paid. An SR-22 filing, which provides proof of financial responsibility, may be obtained from your insurance company and must be filed with the Division of Motor Vehicles for three years following an accident in which the driver was uninsured.
Physical Damage Coverage
Physical Damage coverage is not required by Alaska law, but may be required by your lender if your vehicle is financed. Physical Damage coverage provides a method of taking care of damage to your vehicle and is commonly divided into Collision and Comprehensive coverages. Collision coverage pays for the replacement of your vehicle or the repair of damage to your vehicle that is caused by colliding with an object or by overturning. Comprehensive coverage, sometimes called “other than collision” coverage, pays for theft of your vehicle and types of physical damage not included in your collision coverage, such as broken glass, fire, collision with a bird or an animal, or vandalism.
You will be required to pay a deductible when you file a claim for physical damage coverage. A deductible is the portion of a loss that you agree to retain in the event that you have a covered loss. In the event of a covered loss, the insurance company will pay for any covered loss less the deductible. If you have a $250 deductible and suffer a $1,000 covered loss, the company will pay $750 and you will be responsible for the remaining $250.
Uninsured/Underinsured Motorists Coverage (UM/ UIM)
Uninsured/Underinsured Motorists Coverage, like Liability coverage, is divided into Bodily Injury and Property Damage sections. This coverage is designed to take care of your injuries and damage to your property. If you are in an accident and the other party is found to be responsible, but does not have insurance or does not have enough insurance to meet your expenses, this coverage is available to meet your needs. This coverage also applies to hit-and-run situations or when your vehicle is hit while parked and you are unable to determine the identity of the other party.
When you complete an application for auto insurance, you must be presented with a written offer for this coverage. Insurers must offer you a variety of coverage choices, including limits equal to the Liability coverage which you selected, as well as several optional limits up to $1 million per person/$2 million per accident for Bodily Injury. You must be offered Bodily Injury and Property Damage as separate coverages. You have the option of selecting both Bodily Injury and Property Damage at any of the available limits, rejecting both Bodily Injury and Property Damage, or selecting one coverage and rejecting the other. If your selection or rejection is not verified by your signature, Alaska law requires that the company issue your policy with coverage at limits matching your Liability coverage. If you reject this coverage, the company is not required to make another offer at renewal, but you may request that the coverage be added at any time.
Medical Payments
Medical Payments is an optional coverage that pays hospital, medical, and funeral expenses for you or others who are injured or killed while in your vehicle. Coverage also applies to you, your family members, or others insured on your policy when they are in another vehicle or when they are injured by a vehicle as a pedestrian. Unlike Bodily Injury Liability coverage, payment under this coverage can be made without a determination of negligence.
Rental Reimbursement Coverage
Rental Reimbursement coverage repays you for the cost of a rental car only when your vehicle is disabled after a covered loss. Reimbursement may be limited to a specific amount per day and for a limited number of days.
Towing and Labor Coverages
Towing and Labor Coverage, sometimes called Roadside Assistance or Emergency Services, pay for the cost of towing your vehicle to a repair shop. One way that towing costs are often covered is by providing up to a specific amount per use, but there may not be a limit indicated on the number of times this coverage may be used. This coverage may also provide payment or reimbursement for other types of assistance provided by a mobile service unit. Examples of the types of services that may be covered are locksmith, delivery of a part such as a fan belt, the cost to change a tire or jump start your vehicle.
Stereo Coverages
If you have added audio equipment to your vehicle, you may want to check with your agent or insurance company to see if you need this additional coverage. Most policies will only cover the theft of an audio system that was installed in your vehicle by the factory or that is permanently installed in the dashboard. Theft of CDs or cassettes may be included in this coverage or added as a separate coverage.
Things to be Aware of Regarding Auto Insurance
Deductibles
A deductible is the amount of money you pay as part of any loss you suffer. When shopping for collision and comprehensive coverage, you should consider your deductible. For example, if you carry collision coverage with a $200 deductible and you suffer a $500 covered loss, you would receive $300 from your insurance company and you would be responsible for the remaining $200 of the claim.
If you choose a higher deductible on your comprehensive or collision coverage, your premium will be lower. However, you will need to pay more in the event of a claim.
The Alaska Automobile Insurance Plan
If you are unable to obtain automobile insurance from a private insurer, you may be eligible for coverage under the Alaska Automobile Insurance Plan. The plan assigns applicants to private insurance companies doing business in Alaska. For more information, call AIPSO at 1-800-227-4659.
Motor Vehicle Reports
For automobile and boat insurance, most insurance companies order a Motor Vehicle Report ( MVR) from the Division of Motor Vehicles for all drivers listed on your insurance application. The MVR will be used to verify any traffic violations, license suspensions, or revocations. Many auto insurers require you to name all licensed drivers in your household even if you do not intend to allow them to drive your vehicle. Your company may contact your previous insurance carrier and/or commercial reporting agencies. These organizations might contact you, your family members, neighbors, or employer.
Insurance for Rental Vehicles
Alaska Statute 21.89.020(f )(2)-(3) requires that your policy provide liability coverage at the minimum required liability limits when you rent a vehicle. Your policy must also extend your collision and comprehensive coverage to a rental vehicle. If you do not carry collision and comprehensive coverage, the company must provide the option for you to purchase coverage for physical damage to a rental vehicle.
Named Driver Exclusions
Before a company decides to insure you, it must consider the driving records of all members of your household. If one family member has a poor driving record, it could affect the auto insurance premiums for the whole family. Alaska law gives the named insured the right to specifically exclude a family member from coverage under the insurance policy. This is referred to as a named driver exclusion.
While it may be tempting to exclude a driver with a poor driving record from your insurance policy in order to reduce the premium (for example, if the driver is a student away at college for a large portion of the year), it is important that you be aware of the risks associated with the exclusion. Once a driver is specifically excluded from the insurance policy, any damages caused by that driver will not be covered by the insurance company. In the example above where a young driver is away at college, excluding the student from the parents’ insurance policy means that the student could not drive the parents’ car while home on vacation without becoming an uninsured driver. Similarly, the student would run the risk of being uninsured while driving any other car, such as one belonging to a friend. If an excluded driver drives without insurance, they would not only be in violation of the law, they would be exposing themselves and the named insured to a large, uninsured, liability.
What Affects the Price of Auto Insurance?
Classification
When determining the rate for an auto insurance policy, insurers separate drivers into categories called classifications. Drivers are classified based on a number of different characteristics, including but not limited to age, sex, driving record, type of vehicle, gaps or lapses in insurance coverage, amount of coverage purchased, and annual miles driven. History has shown that drivers with certain characteristics, such as a poor driving record, have a greater chance of being involved in an accident, and the drivers in those classifications must pay higher rates. While some of the classification criteria (such as age and sex) are out of your control, others, such as driving record and type of vehicle driven, are within your control.
Insurers have the right to decide what types of drivers they wish to insure, as long as they apply their criteria consistently and fairly. The eligibility criteria an insurer uses to select the drivers it is willing to insure are referred to as underwriting criteria. Some insurers specialize in adult drivers with clean driving records, and will turn down an application from a teen-aged driver, or an adult who has had several serious violations. Other insurance companies specialize in high-risk drivers and may accept individuals who have had several accidents or violations. The rates offered by the different insurance companies will vary, based at least partially on their choice of drivers to insure. If you are turned down by one insurance company, you should apply with another, since the two insurers may have different underwriting criteria. If you had a poor driving record in the past but it has improved over the last few years, it may be worth shopping around for another insurance company that has lower rates.
If you have trouble finding any insurer willing to sell you a policy, you should contact the assigned risk plan at the number given previously.
Discounts
Discounts are awarded because the insurance company sees certain types of drivers as “better risks.” Before purchasing auto insurance, be aware of discounts you may qualify for that are offered by your company. Here are some discounts to look for:
* Multiple Vehicles—Most insurance companies offer a discount to customers who insure more than one vehicle with their company. Industry statistics show that individuals and families insuring more than one vehicle have better than average claims experience.
* Driver Education Courses—Discounts for driver education courses are targeted primarily at younger and older drivers. Individuals may be able to lower their auto insurance rates by voluntarily participating in a state-approved course.
Alaska law requires companies to give a discount to any primary driver who is over age 55 and who voluntarily completes a motor vehicle accident prevention course approved by the Division of Motor Vehicles. The discount must be applied for the three years following the successful completion of the course.
For further information on driver education programs, contact the Division of Motor Vehicles Driver Improvement Bureau at (907) 273-2223.
* Good Student—Many insurance companies have found that students who earn a B average or better tend to have fewer accidents. For this reason, many companies offer a good student discount.
* Anti-Theft Devices—Devices or systems that deter theft or vandalism may also lower claim costs. Many companies offer discounts for anti-theft devices such as security alarms, combination door locks, etc.
* Auto/Home Package—Insurance companies may offer a discount if they insure both your vehicle and home.
Auto Insurance Claims
Be familiar with your automobile insurance policy before you need it. Read the policy thoroughly so you know what is covered, how much is covered, and what is excluded. Knowing in advance what to do in the event of an accident can help you avoid expensive mistakes.
Before You Have a Claim
* Carefully review your policy so you know how much liability coverage you have. This is the coverage that pays for damage you cause to other vehicles or injuries to other people.
* Know if you have collision and/or comprehensive coverage. Know what your deductible is.
There are several steps you should take after an accident to help you avoid expensive, time-consuming mistakes. Be aware that Alaska law requires you to report to the police any accident that results in death, injury, or damages of $2,000 or more.
Filing a Claim
There are several steps to follow when filing a claim if your car is involved in an accident, damaged by fire, flood, vandalism, or stolen:
* Telephone your producer or company as soon as possible, even if you are away from home or if someone else caused the accident. Ask your producer what forms or documents will be needed to support your claim. Your company may require a proof of loss form, as well as documents relating to your claim, such as medical receipts, auto repair bills, and a copy of the police report.
* Supply any information your producer or company needs promptly. Cooperate with your insurance company in its investigation, settlement, or defense of any claim.
* Keep records of all your expenses. Emergency expenses you incur as the result of an automobile accident may be covered under your policy.
* Keep copies of all your paperwork. Store copies of all your accident-related paperwork with your other important papers.
DCED Logo
Quick Links
General Division of Insurance Information
Who to Contact Regarding...
Consumer Information
Frequently Asked Questions
Agent (Producer) Licensing
Company, Surplus Lines Forms and Information
Statutes, Regulations, Bulletins, Orders
Purchasing Groups and Risk Rention Groups
Rates and Forms
Related Links
Juneau Office
9th Floor State Office Bldg., 333 Willoughby Avenue 99801
PO Box 110805, Juneau, Alaska 99811-0805
(907) 465-2515 Fax (907) 465-3422 TDD (907) 465-5437
Anchorage Office
Robert B. Atwood Building
550 W. 7th Avenue, Suite 1560, Anchorage, Alaska 99501-3567
(907) 269-7900 Fax (907) 269-7910 TDD (907) 465-5437