North Carolina Auto Insurance Regulations
A Message from the Commissioner
Insurance is a complex issue, and it is the responsibility of the North Carolina Department
of Insurance to keep consumers informed. This booklet will help explain the basic
automobile insurance coverages, discuss factors that influence your rates, describe what is
involved in settling your claim and answer some of the most frequently asked questions
from consumers in North Carolina.
In addition to the information contained in this guide, I encourage you to take the time
to read your personal automobile policy. This will allow you to become familiar with the
specific language of your policy.
The North Carolina Financial Responsibility Laws require that Automobile Liability
coverage be maintained. The minimum coverage requirements are $30,000 Bodily
Injury for each person, $60,000 total Bodily Injury for all persons in an accident and
$25,000 for Property Damage.
Insurance companies and their agents are required to offer Uninsured Motorist and
Combined Uninsured/Underinsured Motorist coverage. If you do not wish to have
this coverage, it must be rejected in writing.
We are very proud of the services our department provides to the citizens of North Carolina. The North Carolina
Department of Insurance makes consumer advocacy its highest priority. The Consumer Services Division will be
happy to answer any questions you may have. Feel free to contact this Division toll-free at 1-800-546-5664.
JimLong
CommissionerofInsurance
Table of Contents
Basic Automobile Insurance Coverages
2
Chart of Primary Coverages
4
Miscellaneous Coverages
5
How Rates are Determined
5
North Carolina Safe Driver Incentive Plan
6
Insurance for High Risk Drivers
8
Insurance Tips
9
Losing Your Insurance
After the Accident
2
Frequently Asked Questions
4
Consumer Services and Complaints
7
Glossary and How to Reach Us
8
Consumer Complaint Form
9
Basic Automobile Insurance Coverages
Automobile insurance is used to protect you against
BodilyInjuryLiability
expenses you may not otherwise be able to afford
This coverage will pay for damages to otherpeople as
if you are involved in an automobile accident.
a result of an accident caused by you or another covered
The automobile policy is a combination of several
driver. Examples of damages include medical and funeral
individual types of coverages. (Reviewyourpolicyor
expenses, lost wages, disability, rehabilitation, pain and
contactyouragenttoidentifythelimitationsandexclusions
suffering, law suit settlements and legal expenses.
forthefollowingcoverages.)
PropertyDamageLiability
Liability Coverage (requiredbyN.C.law)
This coverage will pay for damages to otherpeople's
property as a result of an accident that is caused by you or
Your Liability coverage will pay
another covered driver. Examples of damages include the
for bodily injury and
repair or actual cash value (ACV) of another individual's
property
automobile or other property and legal expenses.
damage for
which any
SupplementaryPayments
This coverage is in addition to your stated limits
of liability. (Reviewyourpolicyorcontactyouragentto
identifythelimitationsandexclusionsforthiscoverage.)
This section provides payment on accident related
expenses involving:
1. Bail bonds;
covered
2. Premiums on appeal bonds and bonds to release
individual
attachments;
becomes
legally
3. Costs taxed against an insured and interest
responsible. The Personal Automobile Policy will
accruing after a judgment is entered;
cover you or any family member while using any
4. Loss of earnings because of attendance at
automobile or trailer, and any person using your
hearings or trials at the insurance company's
covered automobile with permission. The policy will
request;
pay up to the limits listed in your policy.
5. Expenses for emergency first aid to others at
Under this coverage you will have separate limits of
an accident involving a covered auto; and
liability per person injured and limits of liability per
accident. This is called split limits. For example,
6. Other reasonable expenses incurred at the
you may have limits of 100/300/50. This would
insurance company's request.
mean your policy would pay up to a maximum of
$100,000 to any one person injured by a covered
driver or up to $300,000 for all injured parties
combined, as a result of a single accident. Also, this
coverage has a single limit of liability for all property
damage resulting from any one accident. Using the
above example of 100/300/50 limits, you will have a
limit of $50,000 Property Damage Liability for each
accident.
The liability section can be separated into three parts:
Bodily Injury Liability, Property Damage Liability
and Supplementary Payments.
2
Coverage for Damage to Your
vehicle (private passenger automobile or trailer
Automobile
licensed for road use) driven by you or a family
member.
This coverage is for direct and accidental loss to your
The policy will pay up to the limits listed in your policy
covered automobile, or any non-ownedautomobilethat
for each individual injured.
meets the following definition:
The Medical Payments coverage will not provide
1. Any private passenger automobile or trailer not
coverage for any expenses if the injuries occur while
owned by or furnished or available for the
occupying a motorized vehicle with less than four
regular use of you or any family member while
wheels.
in the custody of or being operated by you or
any family member.
Uninsured/Underinsured Motorists
2. Any auto or trailer you do not own while being
(UM/UIM) Coverage
used as a temporary substitute for your covered
auto because of its breakdown, repair, servicing,
UninsuredMotorists(UM) Coverage
loss or destruction.
Your Uninsured Motorist coverage will provide protection
when an uninsured driver, who is at-fault, injures you
Collision
or another covered individual. It also provides property
Collision means physical damage to your covered vehicle
damage coverage.
caused by an impact with another vehicle or object. This
coverage pays the lesser of the cost of repair or ACV of
UnderinsuredMotorists(UIM)Coverage
your automobile.
This coverage will provide protection when an
underinsured driver, who is at-fault, causes injury to a
OtherThanCollision(Comprehensive)
covered individual. An underinsured driver is one whose
This coverage pays the cost of repair or ACV of your
limits of liability are less than your UIM limits, and not
automobile less any deductible. Losses caused by the
enough to cover the losses of the people the underinsured
following are considered comprehensive claims:
driver injures in an at-fault accident.
1. Missiles or falling objects;
UIM coverage does not provide protection against
2. Fire;
property damage. The UIM coverage will pay a
3. Theft or larceny;
maximum of the difference between the other driver's
4. Explosive or earthquake;
Liability limits and your UIM limits.
5. Windstorm;
6. Hail, water or flood;
Caution:Yourinsurancecompanywillnotprovidecoverage
7. Malicious mischief or vandalism;
ifyouoryourlegalrepresentative
8. Riot or civil commotion;
settlesthebodilyinjuryorproperty
9. Contact with a bird or animal; or
damagewithoutthecompany's
10. Breakage of glass.
writtenconsent.
Medical Payments Coverage
This coverage pays for reasonable and necessary
medical and funeral expenses due to an
automobile accident. Individuals covered
under this coverage include:
1. You or any family member while
occupying any automobile, or as a
pedestrian when struck by a motor
vehicle; or
2. Any other person while occupying
your covered automobile or any
Chart of Primary Coverages
Type of coverages
What does it pay for? Who (or what) is covered? Is it required?
Liability
Bodily injury and property
You and your family, or anyone driv-
Yes; state law requires
damage for which a covered
ing your covered automobile with
minimum limits
driver becomes legally liable
permission
Collision
Damage to your covered
Your covered automobile or
No; May be required
automobile
non-owned automobile
by lender
Comprehensive
Damage to your covered
Your covered automobile or
No; May be required
automobile, caused by: missiles non-owned automobile
by lender
or falling objects, fire, theft or
larceny, explosion or earth-
quake, windstorm, hail, water
or flood, malicious mischief or
civil commotion, contact with
a bird or animal or breakage
of glass
Medical Payment
Necessary and reasonable
You and your family, or anyone
No
Coverage
medical and funeral services
occupying your covered automobile
Uninsured/
Bodily injury and property
You and your family, or anyone
No
Underinsured
damage for which another
occupying your covered automobile
Motorist Coverage
driver becomes legally liable
4
Miscellaneous Coverages
These coverages may be purchased in addition to your
CoverageforDamagetoYourAuto
basic automobile coverages. You will be charged an
(CustomizingEquipmentCoverage;Coveragefor
additional premium for electing the following coverages.
Audio,Visual,andDataElectronicEquipment)
(Reviewyourpolicyorcontactyouragenttoidentifyany
Through this endorsement, the limits of liability are
applicablelimitationsandexclusions.)
increased for custom furnishings and custom equipment,
and for additional permanently installed electronic
AutomobileDeathIndemnity,SpecificDisabilityand
accessories.
TotalDisabilityBenefitsCoverage
This endorsement will provide a benefit for death,
dismemberment, specific disability and total disability
TowingandLaborCostsCoverage
resulting from an automobile accident.
This coverage pays for towing and labor costs each time
your covered automobile or any non-owned automobile
MiscellaneousTypeVehicleEndorsement
is disabled or the keys are lost, broken or accidentally
Motorcycles, golf carts, travel trailers and
locked in the car.
other similar type vehicles are afforded
coverage by this endorsement. If your
ExtendedTransportationExpensesCoverage(Rental
covered vehicle is a motorcycle, the
Reimbursement)
endorsement will extend the
This coverage will pay, up to a specified rate and
medical payments coverage
maximum total amount, transportation expenses incurred
to motor vehicles with
by you or loss of use expenses for a non-owned vehicle for
fewer than four wheels.
which you become legally responsible.
CoverageforRentedVehicles
This endorsement provides coverage for you or a family
member who rents a rental vehicle on a daily basis for less
than 22 consecutive days.
How Rates are Determined
Underwriting is the process by which an insurance
WhereYouLive
company considers your application and evaluates your
The area you live in will also affect your rate. Insurers
driving record and other factors to see if you meet its
will consider vehicle and population density, road con-
guidelines. Insurance companies use a variety of factors to
ditions, repair rates, hospital and medical costs, and the
determine the level of risk each applicant presents. Each
number of accidents and other claims in a particular area.
company will use its own underwriting guidelines to decide Normally, urban areas have higher rates than rural areas.
whether or not to insure a driver voluntarily. Some of the
TypeofAutomobile
most common factors are: your driving record, where you
The likelihood of theft, cost of repair and replacement,
live, type of automobile and use of automobile.
and the style of vehicle (sports car, SUV, station wagon,
etc.) will influence your premium. For example, a sports
YourDrivingRecord
car will normally have a higher premium than a family
Your driving record will have the largest impact on your
sedan.
insurance premium. North Carolina insurance points are
charged for at-fault accidents and convictions for moving
UseofAutomobile
violations that occur within the experience period (see
The more you use your vehicle the more you may pay in
chartonpage6). The experience period is the three
premium. A vehicle you drive 20 miles to work everyday
years immediately preceding the date of application or the is considered a greater risk than a vehicle only used
preparation of the policy renewal.
occasionally.
5
North Carolina Safe Driver Incentive Plan
Maintaining a clean driving record can pay off. To
cause accidents will be charged higher premiums in
reward safe drivers with the lowest possible insurance
accordance with their driving records. SDIP points
rates, the General Assembly enacted the North
are charged as follows for convictions and at-fault
Carolina Safe Driver Incentive Plan (SDIP). Drivers
accidents occurring during the Experience Period:
who are convicted of moving traffic violations and/or
SDIP
Convictions and At-Fault Accidents
Points
Manslaughter or negligent homicide
Prearranged highway racing or lending a car for prearranged highway racing
Hit-and-run resulting in bodily injury or death
12
Driving with a blood-alcohol level of .08 or more
Driving commercial vehicle with a blood-alcohol level of .04 or more
Driving while impaired
Transporting illegal intoxicating liquor for sale
10
Highway racing or lending a car for highway racing
Speeding to elude arrest
8
Driving during revocation or suspension of license or registration
Aggressive driving
Reckless driving
Hit-and-run resulting in property damage only
4
Passing a stopped school bus
Speeding in excess of 75 mph when the speed limit is less than 70 mph
Speeding in excess of 80 mph when the speed limit is 70 mph or greater
Driving by a person less than age 21 after consuming alcohol or drugs
At-fault accident that occurs before Jan. 1, 2004, resulting in death, or bodily injury* in excess of $1,500 or
3
property damage of $2,500 or more**
At-fault accident that occurs on or after Jan. 1, 2004, resulting in death, or bodily injury* in excess of $1,800
or property damage of $3,000 or more**
Illegal passing
Following too closely
Driving on wrong side of the road
At-fault accident that occurs before Jan. 1, 2004, resulting in property damage in excess of $1,500, but less
2
than $2,500**
At-fault accident that occurs on or after Jan. 1, 2004, resulting in property damage in excess of $1,800, but
less than $3,000**
Speeding more than 10 mph over the speed limit provided the total speed is in excess of 55 mph, but less
than 76 mph
Speeding 10 mph or less in excess of speed zone of 55 mph or greater
All other moving violations
At-fault accident that occurs before Jan. 1, 2004, resulting in bodily injury* of $1,500** or less, or property
1
damage in of $1,500 or less**
At-fault accident that occurs on or after Jan. 1, 2004, resulting in bodily injury* of $1,800** or less, or prop-
erty damage in of $1,800 or less**
Speeding 10 mph or less in excess of speed limit of less than 55 mph
*NoSDIPpointswillapplyforBodilyInjuryiftheinsuredfurnishesproofthatcostsweresolelyfordiagnosticpurposes.
**Thegreatestnumberofpointswillbeappliedforat-faultaccidentsresultinginPropertyDamageandDeathorBodilyInjury.
6
Special Exemptions
Speeding10mphorlessoverthepostedspeedlimit;
No SDIP points will be charged for:
providedallofthefollowingaretrue:
· The violation did not occur in a school zone; and
Anaccidentprovidedallofthefollowingaretrue:
· There is not another moving traffic violation for
· There is property damage only;
the experience period (an isolated Prayer for
· The amount of damage is $1,500 or less;
Judgement Continued [PJC] will not count as a
· There is no conviction for a moving violation
prior conviction for the purpose of this
in connection with the accident; and
exception).
· No licensed operators in the household have
convictions or at-fault accidents during the
OnePJCforeachhouseholdeverythreeyears;
experience period. (An insurance company
however:
may require that the insured be covered by
· A second PJC may cause points to be charged
that company for six continuous months.)
according to the underlying convictions.
Insurance Points Will Cost You Money
% of Rate
Cost if Basic
% of Rate
Cost if Basic
Points
Increase
Rate is $300
Points
Increase
Rate is $300
1
25%
$375
7
160%
$780
2
45%
$435
8
190%
$870
3
60%
$480
9
225%
$975
4
80%
$540
10
260%
$1,080
5
105%
$615
11
300%
$1,200
6
130%
$690
12
340%
$1,320
7
Insurance for High Risk Drivers
WhatisaHigh-RiskDriver?
The chart includes no insurance points for drivers
When an insurance company considers you a high-risk
in the household. Also, this chart does not take
driver, it will be harder to obtain insurance, especially at
into account discounts and deviations individual
better rates. Usually drivers are considered a high risk
insurance companies may apply to the final rate.
because of tickets or accidents, reckless or drunk driving
history or being an inexperienced operator.
Thecoveragesconsideredinthechartare:
WhatisanInexperiencedOperator?
· Property Damage and Bodily Injury
An inexperienced operator is a licensed driver who has
Liability;
less than three years driving experience. Adding an
· Uninsured and Combined Uninsured /
inexperienced operator will cause a significant increase in
Underinsured Motorist Coverage with
your premium.
the same limits as the Liability Coverage
Limits and;
The following chart gives examples of some basic
· Medical Payments Coverage with limits of
rates for inexperienced operators in the same area.
$1,000.
Inexperienced Drivers Will Influence Your Premium
Type
Experience
30/60/25
100/300/50
250/500/50
of Policy
Limits
Limits
Limits
0 to 1 year
$641
$759
$802
1 to 2 years
$488
$570
$618
Single
Car
Policy
2 to 3 years
$423
$497
$413
more than 3 years
$145
$193
$225
Ratesaredeterminedwithonelicenseddriveronthepolicy.
8
ReinsuranceFacility
4. Underinsured Motorist Coverage to a
Since the financial responsibility laws require
maximum $1,000,000 each person and each
individuals to be covered for Bodily Injury Liability
accident for Bodily Injury Liability; and
and Property Damage Liability up to the minimum
5. Uninsured Motorist Coverage from the
limits, insurance companies cannot refuse to write
minimum limits required of Bodily Injury
those coverages. If they do not want to bear the
Liability and Property Damage Liability to a
risk, insurance companies will place high-risk
maximum of $1,000,000 each person and each
drivers in the reinsurance facility. The purpose
accident for Bodily Injury Liability, and
of the facility is to assure the availability of motor
$50,000 for property damage (with a $100
vehicle liability insurance to all eligible risks. The
deductible).
types of coverage offered are:
OptionsforHigh-RiskDrivers
1. Bodily Injury Liability from the minimum
It may be difficult for a high-risk driver to obtain
limits required to a maximum of $100,000
Collision, Comprehensive and other coverages that are
each person, $300,000 each accident;
not offered through the reinsurance facility. The most
common method is through a company that writes non-
2. Property Damage Liability from the
standard business.
minimum limits required to a maximum of
$50,000 each accident;
Your company may ask you to sign a "consent to rate"
form. This would mean that you agree to pay rates
3. Medical Payments Coverage from $1,000 to
higher than what has been filed with the North Carolina
a maximum of $2,000 each person; (This
Department of Insurance in order for the company to
coverage is not available for motorcycles.)
write the coverage.
Insurance Tips
ExamplesofDiscounts,DeviationsandCredits
IncreaseDeductibles
You may want to ask your agent or company if you are
You can lower your premium by increasing your
eligible for any discounts. Following are some examples of deductibles. You can choose the deductibles on your
discounts being offered:
comprehensive and collision coverages. In doing this you
· Your vehicle has anti-lock brakes.
will want to consider how much of a loss you can afford
to absorb if you have a claim.
· Your vehicle has an anti-theft device.
· Your vehicle has daytime running lights.
ShopAround(ComparisonShopping)
· You agree to a checkless pay plan (electronic
Shop around, you may find substantial differences
funds transfer).
between quotes. Make sure you are comparing
identical coverages when comparing companies. Make
· You are renewing your policy and did not have a
sure you are dealing with licensed agents and
loss or conviction during the last policy period.
companies. You can check this by contacting the
· You are considered a mature driver (normally age
North Carolina Department of Insurance at
55, but ages for eligibility can vary by company).
1-800-546-5664.
· You have more than one automobile on the same
You can also check a company's ratings. Some
policy.
examples of organizations that rate insurance
· You have insurance on your home and
companies are A.M. Best, Moody's Investors Service,
automobile with the same company.
Standard and Poor's Corporation (S&P) and Weiss
· Your vehicle has a passive restraint system (air
Research. You can typically find information offered
bags, automatic seat belts and other safety
by these organizations at your local library or on the
equipment may qualify).
Internet.
9
PayingYourPremium
BeforeYouBuyaCar
Pay your premium in full. Also, pay on or before the
Before you buy your car ask about the cost of
due date to avoid the risk of cancellation. There is NO
insurance. Some makes and models are higher risks
GRACE PERIOD for automobile insurance. Use a
than others and could result in a higher premium.
check or money order. If you use cash, request a receipt,
With a few models, you may have trouble finding
and keep it in a safe place.
companies willing to provide Comprehensive and
Collision coverages.
Pay your premiums even if you disagree with your
insurance company. Failure to make premium payments
DrivingRecord
may cause cancellation of your policy.
Maintain a clean driving record. A key element in
Some consumers choose to finance their premium.
determining your rates is your driving record.
The method most commonly used is by way of a
Remember that insurance points will remain on your
premium finance company. When dealing with
record for three years.
a premium finance company you should note the
following.
ParentsofTeenagers
If your child does not own a car, make sure the insurer
· You are reaching a separate agreement with the
knows which car the teen will be driving and whether it
finance company. Your insurance company is
will be primary or occasional use.
not lending you the
money.
Coverages
If you have an older model vehicle and it is not
· The finance charges
financed, the benefit from the purchase of
and fees associated
Comprehensive and Collision coverages might not be
worth the cost.
with the loan will
ReadYour
increase your total cost of insurance.
Policy
· The finance agreement must be in writing,
Read your policy and
dated and signed by you. Before the first due
make sure that it lists all
date of the first installment, the finance
coverages you have requested.
company must deliver a copy of the agreement
to you or mail to your address as shown on the
InsuranceIdentificationCards
agreement.
Make sure you have an insurance identification
card. This will provide the necessary insurance
· You should ask your agent for an explanation of
information required from you at the time of an
the charges and fees associated with the
accident.
agreement.
0
Losing Your Insurance
Insurance companies have the right to terminate your Collision,Comprehensive,andCoveragesOtherThan
coverage; however, they must follow the guidelines listed
ThosePreviouslyListed
in your policy to do so. The three ways your policy can
Your insurance company may cancel any coverage other
be terminated are cancellation, nonrenewal and automatic than your Liability, Medical Payments and Uninsured
termination.
Motorists or Combined Uninsured/Underinsured
Cancellation
Motorists by mailing to your last known address at least
10 days advance notice.
Cancellation is when your policy is terminated
Insurance companies review many different factors to
during the policy period. You may cancel your policy determine whether the policy continues to meet their
by returning the policy to the company or agent or
underwriting criteria. Some of the factors that may lead
giving the company advanced written notice of the
to cancellation or nonrenewal are:
date you wish to cancel the policy.
· Non-payment of premium. Remember there
Liability,MedicalPaymentsandUninsured
is NO GRACE PERIOD for automobile
MotoristsorCombinedUninsured/Underinsured
insurance;
MotoristsCoverages
· Excessive claims or accidents;
Your company may cancel your Liability, Medical
Payments and Uninsured Motorists or Combined
· Traffic violations;
Uninsured/Underinsured Motorists coverages by
mailing to your last known address:
· And no longer meeting company guidelines
(Examples include adding a sports car or
1. At least 15 days notice, if cancellation is for
adding an inexperienced operator).
non-payment of premium; or
Nonrenewal
2. At least 60 days notice for all other cases.
Nonrenewal denotes your company's refusal to renew
There are certain reasons your company may cancel
your policy. An insurance company can nonrenew
your Liability, Medical Payments, and Uninsured
your Liability, Medical Payments and Uninsured
Motorist or Combined Uninsured/Underinsured
Motorist or Combined Uninsured/Underinsured
Motorist coverages:
Motorist coverages by mailing to your last known
1. Non-payment of premium;
address at least 60 days notice before the end of
the policy period. Any other coverage may be
2. You are no longer a resident of North Carolina
nonrenewed by mailing to you at least 10 days notice
and are not eligible for a policy through the
before the end of the policy period.
reinsurance facility.
3. The insurance company terminates its contract
Automatic Termination
with your insurance agent;
If the insurance company offers to renew or continue
4. Your premium finance company cancels the
your coverage and you do not accept, the policy will
policy according to the finance contract;
automatically terminate at the end of the current
policy period. Failure to pay the required premium
5. If you knowingly make a material
to renew or continue your policy will mean you do
misrepresentation of:
not accept the offer.
a. The years of driving experience; or
If you purchase other insurance on your covered
b. The driving record of you or any other
automobile, any similar insurance provided by the
driver who lives with you and customarily
initial policy will terminate. The termination will
uses your covered automobile.
occur on the effective date of the other insurance.
Refunds
without any penalty, for canceling during the policy
period.
There are two ways of calculating your refund after
cancellation, pro-rata cancellation and short rate
ShortRateCancellation:
cancellation.
This type of cancellation may be used when you cancel
the policy. It will generate your refund including a
Pro-RataCancellation:
penalty for canceling during the policy period. The
This type of calculation is used when the company
penalty amount varies according to the total premium
cancels your policy. It will generate your refund,
and the amount of time left in the policy period.
After the Accident
Accident Checklist
How will a company determine
Stop your car in a safe place.
who is at-fault?
Move your car, if needed, to protect against
The insurance adjuster investigating the accident
further damage and keep from blocking traffic.
will attempt to determine who is negligent or
at-fault. The Automobile Liability coverage will
Call the police, especially when there are
pay for bodily injury and/or property damage for
injuries or hit and run accidents.
which any insured becomes legally responsible due to
Get information:
negligence.
1. The other driver's name, address, phone
North Carolina Contributory Negligence Law bars
number, license plate number, driver's
a driver from collecting damages if determined to be
license number and insurance information.
partially at fault. In essence, if you contribute to an
accident, you may not be able to collect on a liability
2. The witness' name, address and telephone
claim. Any disagreement will ultimately have to be
number.
resolved in a court of law.
3. Insurance information needed: name of
company and policy number exactly as
If Your Car Can Be Repaired
shown on the other driver's proof of
The insurance company is responsible for the cost to
insurance card.
repair your vehicle. This does not necessarily mean
Don't agree to forget about the accident. You
the estimated amount by the repair facility of your
may have hidden damages, unknown injuries
choice. If the company can have the same repairs
or later find that a lawsuit has been filed
completed at a lower cost from another shop, you may
against you.
be required to pay the difference.
Call your agent if you have any questions or
No insurance company can require the use of after
concerns with the claims process. Your agent
market parts in the repair of your vehicle unless the
could be of assistance when filling out forms
part is equal to the original part in terms of fit, quality,
and documents required to proceed with your
performance, and warranty. Any modifications made
claim.
necessary because of the use of after market parts shall
be included in the estimates. You can choose not to
Who do I call to file a claim?
have after market parts placed on your car, but you
· Your agent or insurance company.
may be responsible for any additional cost.
· If another individual is responsible for your
The insurance company may deduct for depreciation
damages, you need to contact their insurance
when they allow for an entire paint job or when such
agent or company.
items as tires and batteries are replaced. Depreciation is
the decrease in value of the vehicle or part because of age
· The adjuster you are assigned will inform you
or wear and tear.
of any additional steps needed.
2
If Your Car Must be Totaled
If You are Injured
If a motor vehicle is damaged, to the extent that the total
Medical Payments coverage, if purchased, can provide
cost of repair is equal to or exceeds 75 percent of the
some assistance for your doctor and hospital bills,
pre-accident actual cash value (ACV), the insurer shall
regardless of fault.
consider the vehicle a total loss.
Bodily injury claims can include doctor and hospital bills,
When your car is totaled, the insurance company is
laboratory fees, lost wages and pain and suffering that are
responsible for its ACV. ACV represents the local
a direct result of the accident.
market value of the totaled vehicle.
The General Statutes of North Carolina establish no
There are two methods to determine local market value:
guidelines pertaining to the determination or calculation
1. By using the local market price of a
of any amount owed to you for pain and suffering.
comparable vehicle; or
Therefore, if you and the insurance company cannot
agree on the value of your claim you may wish to seek
2. If no comparable vehicle can be located, dollar
legal advice.
estimates from at least two qualified dealers
within the local market area are normally
used.
Frequently Asked Questions
Automobile Insurance Basics
If you do not notify the company within 30 days, there
will be no automatic coverage.
WhathappensifIhavealapseofliability
insurance?
WhathappensifIdropcoverageonafinancedvehicle?
Whenever your liability coverage is cancelled or
First, it is a violation of your finance contract and may
nonrenewed, your insurance company is required to
put your loan in jeopardy. Second, the lender could
notify the North Carolina Division of Motor Vehicles
place single interest coverage on the vehicle and add the
(DMV). The DMV is required to notify you when they
premium to the loan. The coverage is expensive and does
receive the notification. If there is a penalty, the DMV
not provide any coverage for you.
will advise you of such and what action, if any, that you
need to take.
Willmypolicyprovidetherequiredliabilitycoverage
whentravelingtootherstates?
Yes, your policy will automatically meet the minimum
requirements of other states in which you are traveling.
WhataboutdrivinginCanadaandMexico?
Your policy will cover you and meet the requirements of
Canada. Your policy WILL NOT cover you in Mexico.
In the border states, you can purchase Mexican liability
policies from agents who specialize in it.
Arefamilymemberscoveredbymypolicy?
Yes, family members are insured under your policy.
Family member is defined in your policy as a person
related to you by blood, marriage or adoption who is
a resident of your household. This includes a ward or
foster child.
DoIneedtopurchasecoveragewhenIrentacar?
Under certain conditions your automobile policy may
WhatifIbuyamotorcycle?
provide coverage while using a rental vehicle. However,
The automobile policy, if not amended, does not provide
contact your agent for specifics.
any coverage. You can endorse your policy so that it will
extend the coverages to your motorcycle.
Isflooddamagecovered?
Yes, if you have purchased the Comprehensive
Insurance for Young Drivers
coverage.
I'mgoingtocollegeinanotherstate,andmycarisstill
Arecellphonesandstereoequipmentcovered?
registeredinNorthCarolina.Willmy(ormyparents')
Stereo equipment, cell phones, televisions, scanners and
NorthCarolinapolicycoverme?
other media may be covered under certain conditions.
Yes, coverage would still apply. Your premium may be
You should check with your agent to make sure you are
adjusted because of where the vehicle is now located.
properly covered.
Mydaughterisgoingawaytocollege.Canmy
WhenIbuyanadditionalcarorreplaceacar,isthe
companyforcemetokeepheronthepolicyifIwantto
newcarcoveredautomatically?
removeher?
Yes, as long as you notify the insurance company
Yes, your company still must cover her as long as her
within 30 days after acquiring a new vehicle.
permanent residence is your home. Even if she doesn't
Additional vehicles will have the broadest coverage
have a vehicle with her, your policy covers her for liability
of any vehicle listed on your policy. Replacement vehicles when she may borrow a vehicle at school and when at
will have the same coverage as the vehicle it replaced.
home on visits.
4
I'menlistinginthemilitary.Doesmypolicystill
Losing Your Insurance
covermeifI'mstationedinanotherstate?
Your policy will automatically meet the other state's
Doesaninsurancecompanyhavetotellmewhyit
liability requirement. When it is time to renew your
cancelledmyinsurancepolicy?
policy you may be required to purchase insurance in the Yes, a company must give the reason(s) why your policy
state where you are stationed.
was cancelled and the date termination is effective.
Canacompanyrefusetorenewmypolicybecauseof
Mysonhasreceivedhisdriver'slicense.DoIhaveto
claimsthatwerenotmyfault?
addhimtomypolicyifhedropshisowninsurance
Your company can nonrenew your Comprehensive and
policy?
Collision coverages if you do not meet its underwriting
Yes, as long as he is a resident of your household.
criteria, as long as the company gives proper notification.
However, you must notify your agent or company.
Many companies will use frequency of claims, taking into
Failure to do so could jeopardize your coverage.
account at-fault as well as fault-free claims, as one of their
criteria.
My19-year-oldsonnolongerliveswithme.What
canIdotoremovehimfrommypolicyifthecompany Mycompanyrenewedmypolicywithanothercompany
wantstokeephimonmypolicy?
inthesamegroup.Cantheydothat?
Showing proof of insurance with another company can
Yes, if it gives you proper notification that your original
help you remove him. Also, show the company any
policy will be nonrenewed.
documents that will help prove that a change of address
has taken place. Examples of these documents can
Whydidn'tIgetanoticethatmyinsurancepolicywas
include lease agreements, utility billings or receipts, and a cancelled?
current driver's license.
If canceling your Liability, Medical Payments and
Uninsured Motorist or Uninsured/Underinsured Motorist
Doesmychildhavetoberatedonthemostexpensive
Coverages for non-payment of premium, your company
vehicle?
must mail a notice to your last known address at least 15
No, the rates should apply to the vehicle your child
days in advance. Sixty days notice is required for all other
principally operates. If the child is an occasional
reasons.
operator, the rates would apply to the vehicle your child
most frequently operates.
The insurance company is responsible for showing proof
that the notice of cancellation was mailed, not proof that
How Rates Are Determined
you did or did not receive it.
Whydoesmyinsurancecostmorethanmyagentsaid If canceling any coverage other than Liability, Medical
itwould?
Payments and Uninsured Motorists or Uninsured/
A quote is an estimate of your premium. It does
Underinsured Motorists, your company must mail a notice
not offer a firm price or contract. If your agent
to your last known address at least 10 days in advance.
misquoted the premium, your company must correct
it by billing you for the correct premium or refunding
After the Accident
the overpaid amount. Being accurate with your driving
information is the best way to assure correct premium
Whatdoesmypolicyrequiremetodoafteran
charges.
accident?
Whyisithardertogetinsuranceifdriversinmy
· Notify the insurance company of how, when
householdhavebaddrivingrecords?
and where the accident or loss happened. This
When the individuals residing in your house have
should include the names and addresses of
bad driving records, the company knows it has an
anyone who is injured and any witnesses.
increased risk. Your company will consider that risk
· Cooperate with the investigation.
when underwriting the policy. According to the Liability
Coverage section of your policy, any family member is
· Obtain or authorize the insurance company
considered an insured. Anyone driving your covered
to obtain appropriate documents, medical
vehicle with permission is also covered by your policy.
information and other pertinent records.
5
WhenshouldInotifymyinsurancecompany?
Guaranteed Automobile Protection (GAP). GAP
As soon as reasonably possible, while the details are still
insurance covers the difference between ACV and your
fresh in your mind.
loan balance. This is typically only available for new
vehicles. Otherwise, you can be held responsible for
Whatiftheotherdriver'sinsuranceisn'tenoughtopay the difference.
mybills?
Medical: Your Underinsured Motorists (UIM) coverage
Cananinsurancecompanytellmewheretogetmy
will provide protection for the difference between the
carfixed?
other driver's Liability Coverage and the limits under
No. An insurance company cannot require you to go
your UIM coverage. You can find additional coverage
to a particular repair shop. An insurer can suggest a
under the Medical Payments coverage portion of your
repair shop. If the company can have the same repairs
policy. Neither of these coverages are required by law.
completed at a lower cost from a different shop, you
Check with your agent and review your policy to make
may be required to pay the difference.
sure you are adequately covered.
Idon'twanttofileaclaimagainstmycompany
Property Damage: The difference can be covered by
your Collision coverage. Again, check with your agent
becauseitmightraisemyratesorrefusetorenew
and review your policy to make sure you are adequately
mypolicy,butI'mgettingnowherewiththeother
covered.
driver'sinsurer.Anyadvice?
Ifmyonlycoverageisliabilityinsurance,doesmy
An insurance company cannot charge insurance
policycovermymedicalandcarrepairbills?
points for an accident that was not your fault. Your
No, liability insurance only pays for other people's
agent can give you advice about your company's
injuries and property damage for which an insured driver
underwriting and how the claim may affect your
becomes legally responsible.
policy.
Theinsurancecompanywantstototalmycar;Iwant
IfIaminanaccidentandsomeoneelseisat-fault,
tofixit.WhatcanIdo?
doIgetarentalcarwhilemineisbeingfixed?
You have the right to keep the salvage vehicle. When you It is common practice for insurance companies to
do, the insurance company will deduct the salvage value
allow a rental vehicle while your car is being repaired.
from the actual cash value. If requested, the insurance
However, there are no statutes or administrative codes
company must furnish you with the name and address
that require an insurance company to offer a rental
of a salvage dealer who will purchase the salvage for the
vehicle.
amount deducted.
Cantheotherdriver'sinsurancecompanydelay
WhatiftheinsurancecompanyandIcannotagreeon
payingformycarrepairstopressuremeintosigning
theamounttobepaidbymycollisioncoverage?
areleaseonmyinjuryclaim?
You can elect to use the appraisal provision of your
No. If this situation were to arise, you can file
policy. According to the provision, you and the insurance a formal complaint with the North Carolina
company will each choose a competent appraiser. The
Department of Insurance.
two appraisers will then select an umpire. The appraisers
Howlongcanacompanytaketopaymyclaim?
will state separately the ACV and the amount of loss. If
After receiving a claim an insurance company has 30
they do not agree, they will submit their differences to the days to pay the claim, make an offer of settlement,
umpire. A decision by any two will be binding.
deny the claim or advise the claimant that the
The insurance company and the insured will pay its
investigation of the claim is ongoing. Loss and claim
chosen appraiser and bear the expenses of the appraisal
payments should be mailed or delivered within 10
and umpire equally.
business days after the claim is settled.
Howcanmyloanbalancebemorethanmyinsurance
Isthecompanyrequiredtogivemeanexplanation
companysaysmycarisworth?
ofwhyitdeniedmyclaim?
This can occur for many reasons including low down
Yes. The insurance company must provide a reasonable
payments, high interest rates and poor maintenance. You explanation of why your claim was denied in relation
may be able to purchase a type of insurance called
to the policy language or applicable law.
6
Consumer Services and Consumer Complaints
The goal of the Consumer Services Division is
5. Explain the provisions of your insurance
to respond promptly, clearly and courteously
policy contract, as appropriate.
to questions and complaints from the public
6. Suggest to you actions or procedures that you
concerning insurance and to acquaint consumers
may take which could aid in resolving your
with alternatives and courses of action which a
insurance problem.
citizen can pursue to solve a particular insurance
problem.
What We Cannot Do
If you have a problem or concern with an
1. Assume the role as your legal representative, in
insurance company or agent, the North Carolina
or out of court.
Department of Insurance stands ready to assist
2. Interfere in a pending lawsuit on your behalf.
you.
3. Consult with you if you are represented by an
attorney, unless it is with written permission of
A consumer complaint form is attached for your
that attorney.
convenience on page 19.
4. Make a decision as to disputes between
What We Can Do To Help
you and your insurance company or their
representatives which involve matters as to;
1. Forward a copy of your complaint to the
a. Who is negligent or at fault:
insurance company, if appropriate.
b. The facts surrounding the claim (that is,
2. Obtain information or explanations on your
who might be telling the truth in the matter
behalf from the insurance company or its
when accounts differ);
representatives. This may involve written and
c. The value of a claim or the amount of
oral contact with such company or
money owed to you; or
representatives.
d. Any other disagreements between you
and another
party
as to what the
facts might be.
5. Deal with
situations or
companies that
are not subject
to the
insurance laws
of North
Carolina (such
as self-funded
health plans)
or with matters
3. Review in detail the information obtained
governed by other
from the company for compliance with statutes,
state agencies (such as Workers'
regulations and policy contracts.
Compensation claims).
4. Serve as your advocate if we determine that
The North Carolina Department of Insurance pledges
the position of the insurance company or its
to seek fair and equitable treatment of all parties in
representatives is unlawful.
insurance transactions. We are here to serve you.
7
Glossary
Adjuster
FamilyMember
A person licensed by the Department of Insurance whose
A person related to you by blood, marriage or adoption
job is to evaluate the amount of loss and to recommend
who is a resident of your household, including a ward or
the amount the insurance company will pay.
foster child.
Agent
Insured
A person licensed by the Department of Insurance to
The person who is covered by the insurance contract.
solicit and service insurance policies.
Insurer
At-Fault
The insurance company that is underwriting the contract
Negligent.
of insurance.
Claim
LiabilityInsurance
A request to an insurance company for payment of a
Provides protection for the insured against loss arising out
loss.
of legal liability to third parties.
Coverage
Limits
The amount of risk covered by an insurer.
The maximum amount the insurance company will pay
Deductible
in the event of a loss.
The portion of each covered claim you are responsible
Negligence
for paying.
The failure to act as a reasonably prudent person would
Endorsement
have acted under similar circumstances.
An amendment to an insurance contract, creating a
Occupying
change in the original terms.
Means in; upon; getting in, on, or off.
Exclusion
Premium
A provision in an insurance contract that removes
The amount paid in consideration for an insurance policy.
coverage for certain losses or property.
PremiumFinanceCompany
ExperiencePeriod
A lending institution approved by the North Carolina
The three years immediately preceding the date of
Department of Insurance, which finances insurance
application or the preparation of renewal.
premiums for a fee.
How to Reach Us
You can reach the North Carolina Department of Insurance Consumer Services Division at:
(800)546-5664 Toll free
(919)733-2032 Outside of North Carolina
(919)715-0319 TDD (Telephone Device for Deaf Caller)
(919)733-0085 Fax
You can find additional information as well as a downloadable
copy of our complaint form on the North Carolina Department
of Insurance web site at www.ncdoi.com.
The address for the North Carolina Department of Insurance
Consumer Services Division is:
Consumer Services Division
North Carolina Department of Insurance
1201 Mail Service Center
Raleigh, NC 27699
8
File Number: (office use only)
PLEASE DO NOT STAPLE
NORTH CAROLINA DEPARTMENT OF INSURANCE
Jim Long, Commissioner
DR.
(Please type or print. Use additional sheets if necessary)
MR.
MRS.
MS.
my name
name of insured
my address
insurance company
second address line (if needed)
agent
city
state
zip
adjuster
county
date of loss
policy or group number
Phone: Work /
/
claim or certificate number
Home /
/
Type of Insurance (please check one): Life Health
Auto
Homeowners
Other
If Life or Health policy, show the state in which your policy/certificate was purchased:
Are you represented by an attorney in this matter? No
Yes
Name
Details of complaint (attach copies of papers relating to this matter)
The Insurance Department is authorized to send a copy of this document(s) to any company or agency involved. I authorize the release of all
relevant information to the North Carolina Department of Insurance for its use in the review of this matter.
SIGNATURE:
DATE:
Mail to: Consumer Services Division, NC Department of Insurance, 1201 Mail Service Center, Raleigh, NC 27699-1201
9
PS-76
Revised 11/99
20
Insurance is a complex issue, and it is the responsibility of the North Carolina Department
of Insurance to keep consumers informed. This booklet will help explain the basic
automobile insurance coverages, discuss factors that influence your rates, describe what is
involved in settling your claim and answer some of the most frequently asked questions
from consumers in North Carolina.
In addition to the information contained in this guide, I encourage you to take the time
to read your personal automobile policy. This will allow you to become familiar with the
specific language of your policy.
The North Carolina Financial Responsibility Laws require that Automobile Liability
coverage be maintained. The minimum coverage requirements are $30,000 Bodily
Injury for each person, $60,000 total Bodily Injury for all persons in an accident and
$25,000 for Property Damage.
Insurance companies and their agents are required to offer Uninsured Motorist and
Combined Uninsured/Underinsured Motorist coverage. If you do not wish to have
this coverage, it must be rejected in writing.
We are very proud of the services our department provides to the citizens of North Carolina. The North Carolina
Department of Insurance makes consumer advocacy its highest priority. The Consumer Services Division will be
happy to answer any questions you may have. Feel free to contact this Division toll-free at 1-800-546-5664.
JimLong
CommissionerofInsurance
Table of Contents
Basic Automobile Insurance Coverages
2
Chart of Primary Coverages
4
Miscellaneous Coverages
5
How Rates are Determined
5
North Carolina Safe Driver Incentive Plan
6
Insurance for High Risk Drivers
8
Insurance Tips
9
Losing Your Insurance
After the Accident
2
Frequently Asked Questions
4
Consumer Services and Complaints
7
Glossary and How to Reach Us
8
Consumer Complaint Form
9
Basic Automobile Insurance Coverages
Automobile insurance is used to protect you against
BodilyInjuryLiability
expenses you may not otherwise be able to afford
This coverage will pay for damages to otherpeople as
if you are involved in an automobile accident.
a result of an accident caused by you or another covered
The automobile policy is a combination of several
driver. Examples of damages include medical and funeral
individual types of coverages. (Reviewyourpolicyor
expenses, lost wages, disability, rehabilitation, pain and
contactyouragenttoidentifythelimitationsandexclusions
suffering, law suit settlements and legal expenses.
forthefollowingcoverages.)
PropertyDamageLiability
Liability Coverage (requiredbyN.C.law)
This coverage will pay for damages to otherpeople's
property as a result of an accident that is caused by you or
Your Liability coverage will pay
another covered driver. Examples of damages include the
for bodily injury and
repair or actual cash value (ACV) of another individual's
property
automobile or other property and legal expenses.
damage for
which any
SupplementaryPayments
This coverage is in addition to your stated limits
of liability. (Reviewyourpolicyorcontactyouragentto
identifythelimitationsandexclusionsforthiscoverage.)
This section provides payment on accident related
expenses involving:
1. Bail bonds;
covered
2. Premiums on appeal bonds and bonds to release
individual
attachments;
becomes
legally
3. Costs taxed against an insured and interest
responsible. The Personal Automobile Policy will
accruing after a judgment is entered;
cover you or any family member while using any
4. Loss of earnings because of attendance at
automobile or trailer, and any person using your
hearings or trials at the insurance company's
covered automobile with permission. The policy will
request;
pay up to the limits listed in your policy.
5. Expenses for emergency first aid to others at
Under this coverage you will have separate limits of
an accident involving a covered auto; and
liability per person injured and limits of liability per
accident. This is called split limits. For example,
6. Other reasonable expenses incurred at the
you may have limits of 100/300/50. This would
insurance company's request.
mean your policy would pay up to a maximum of
$100,000 to any one person injured by a covered
driver or up to $300,000 for all injured parties
combined, as a result of a single accident. Also, this
coverage has a single limit of liability for all property
damage resulting from any one accident. Using the
above example of 100/300/50 limits, you will have a
limit of $50,000 Property Damage Liability for each
accident.
The liability section can be separated into three parts:
Bodily Injury Liability, Property Damage Liability
and Supplementary Payments.
2
Coverage for Damage to Your
vehicle (private passenger automobile or trailer
Automobile
licensed for road use) driven by you or a family
member.
This coverage is for direct and accidental loss to your
The policy will pay up to the limits listed in your policy
covered automobile, or any non-ownedautomobilethat
for each individual injured.
meets the following definition:
The Medical Payments coverage will not provide
1. Any private passenger automobile or trailer not
coverage for any expenses if the injuries occur while
owned by or furnished or available for the
occupying a motorized vehicle with less than four
regular use of you or any family member while
wheels.
in the custody of or being operated by you or
any family member.
Uninsured/Underinsured Motorists
2. Any auto or trailer you do not own while being
(UM/UIM) Coverage
used as a temporary substitute for your covered
auto because of its breakdown, repair, servicing,
UninsuredMotorists(UM) Coverage
loss or destruction.
Your Uninsured Motorist coverage will provide protection
when an uninsured driver, who is at-fault, injures you
Collision
or another covered individual. It also provides property
Collision means physical damage to your covered vehicle
damage coverage.
caused by an impact with another vehicle or object. This
coverage pays the lesser of the cost of repair or ACV of
UnderinsuredMotorists(UIM)Coverage
your automobile.
This coverage will provide protection when an
underinsured driver, who is at-fault, causes injury to a
OtherThanCollision(Comprehensive)
covered individual. An underinsured driver is one whose
This coverage pays the cost of repair or ACV of your
limits of liability are less than your UIM limits, and not
automobile less any deductible. Losses caused by the
enough to cover the losses of the people the underinsured
following are considered comprehensive claims:
driver injures in an at-fault accident.
1. Missiles or falling objects;
UIM coverage does not provide protection against
2. Fire;
property damage. The UIM coverage will pay a
3. Theft or larceny;
maximum of the difference between the other driver's
4. Explosive or earthquake;
Liability limits and your UIM limits.
5. Windstorm;
6. Hail, water or flood;
Caution:Yourinsurancecompanywillnotprovidecoverage
7. Malicious mischief or vandalism;
ifyouoryourlegalrepresentative
8. Riot or civil commotion;
settlesthebodilyinjuryorproperty
9. Contact with a bird or animal; or
damagewithoutthecompany's
10. Breakage of glass.
writtenconsent.
Medical Payments Coverage
This coverage pays for reasonable and necessary
medical and funeral expenses due to an
automobile accident. Individuals covered
under this coverage include:
1. You or any family member while
occupying any automobile, or as a
pedestrian when struck by a motor
vehicle; or
2. Any other person while occupying
your covered automobile or any
Chart of Primary Coverages
Type of coverages
What does it pay for? Who (or what) is covered? Is it required?
Liability
Bodily injury and property
You and your family, or anyone driv-
Yes; state law requires
damage for which a covered
ing your covered automobile with
minimum limits
driver becomes legally liable
permission
Collision
Damage to your covered
Your covered automobile or
No; May be required
automobile
non-owned automobile
by lender
Comprehensive
Damage to your covered
Your covered automobile or
No; May be required
automobile, caused by: missiles non-owned automobile
by lender
or falling objects, fire, theft or
larceny, explosion or earth-
quake, windstorm, hail, water
or flood, malicious mischief or
civil commotion, contact with
a bird or animal or breakage
of glass
Medical Payment
Necessary and reasonable
You and your family, or anyone
No
Coverage
medical and funeral services
occupying your covered automobile
Uninsured/
Bodily injury and property
You and your family, or anyone
No
Underinsured
damage for which another
occupying your covered automobile
Motorist Coverage
driver becomes legally liable
4
Miscellaneous Coverages
These coverages may be purchased in addition to your
CoverageforDamagetoYourAuto
basic automobile coverages. You will be charged an
(CustomizingEquipmentCoverage;Coveragefor
additional premium for electing the following coverages.
Audio,Visual,andDataElectronicEquipment)
(Reviewyourpolicyorcontactyouragenttoidentifyany
Through this endorsement, the limits of liability are
applicablelimitationsandexclusions.)
increased for custom furnishings and custom equipment,
and for additional permanently installed electronic
AutomobileDeathIndemnity,SpecificDisabilityand
accessories.
TotalDisabilityBenefitsCoverage
This endorsement will provide a benefit for death,
dismemberment, specific disability and total disability
TowingandLaborCostsCoverage
resulting from an automobile accident.
This coverage pays for towing and labor costs each time
your covered automobile or any non-owned automobile
MiscellaneousTypeVehicleEndorsement
is disabled or the keys are lost, broken or accidentally
Motorcycles, golf carts, travel trailers and
locked in the car.
other similar type vehicles are afforded
coverage by this endorsement. If your
ExtendedTransportationExpensesCoverage(Rental
covered vehicle is a motorcycle, the
Reimbursement)
endorsement will extend the
This coverage will pay, up to a specified rate and
medical payments coverage
maximum total amount, transportation expenses incurred
to motor vehicles with
by you or loss of use expenses for a non-owned vehicle for
fewer than four wheels.
which you become legally responsible.
CoverageforRentedVehicles
This endorsement provides coverage for you or a family
member who rents a rental vehicle on a daily basis for less
than 22 consecutive days.
How Rates are Determined
Underwriting is the process by which an insurance
WhereYouLive
company considers your application and evaluates your
The area you live in will also affect your rate. Insurers
driving record and other factors to see if you meet its
will consider vehicle and population density, road con-
guidelines. Insurance companies use a variety of factors to
ditions, repair rates, hospital and medical costs, and the
determine the level of risk each applicant presents. Each
number of accidents and other claims in a particular area.
company will use its own underwriting guidelines to decide Normally, urban areas have higher rates than rural areas.
whether or not to insure a driver voluntarily. Some of the
TypeofAutomobile
most common factors are: your driving record, where you
The likelihood of theft, cost of repair and replacement,
live, type of automobile and use of automobile.
and the style of vehicle (sports car, SUV, station wagon,
etc.) will influence your premium. For example, a sports
YourDrivingRecord
car will normally have a higher premium than a family
Your driving record will have the largest impact on your
sedan.
insurance premium. North Carolina insurance points are
charged for at-fault accidents and convictions for moving
UseofAutomobile
violations that occur within the experience period (see
The more you use your vehicle the more you may pay in
chartonpage6). The experience period is the three
premium. A vehicle you drive 20 miles to work everyday
years immediately preceding the date of application or the is considered a greater risk than a vehicle only used
preparation of the policy renewal.
occasionally.
5
North Carolina Safe Driver Incentive Plan
Maintaining a clean driving record can pay off. To
cause accidents will be charged higher premiums in
reward safe drivers with the lowest possible insurance
accordance with their driving records. SDIP points
rates, the General Assembly enacted the North
are charged as follows for convictions and at-fault
Carolina Safe Driver Incentive Plan (SDIP). Drivers
accidents occurring during the Experience Period:
who are convicted of moving traffic violations and/or
SDIP
Convictions and At-Fault Accidents
Points
Manslaughter or negligent homicide
Prearranged highway racing or lending a car for prearranged highway racing
Hit-and-run resulting in bodily injury or death
12
Driving with a blood-alcohol level of .08 or more
Driving commercial vehicle with a blood-alcohol level of .04 or more
Driving while impaired
Transporting illegal intoxicating liquor for sale
10
Highway racing or lending a car for highway racing
Speeding to elude arrest
8
Driving during revocation or suspension of license or registration
Aggressive driving
Reckless driving
Hit-and-run resulting in property damage only
4
Passing a stopped school bus
Speeding in excess of 75 mph when the speed limit is less than 70 mph
Speeding in excess of 80 mph when the speed limit is 70 mph or greater
Driving by a person less than age 21 after consuming alcohol or drugs
At-fault accident that occurs before Jan. 1, 2004, resulting in death, or bodily injury* in excess of $1,500 or
3
property damage of $2,500 or more**
At-fault accident that occurs on or after Jan. 1, 2004, resulting in death, or bodily injury* in excess of $1,800
or property damage of $3,000 or more**
Illegal passing
Following too closely
Driving on wrong side of the road
At-fault accident that occurs before Jan. 1, 2004, resulting in property damage in excess of $1,500, but less
2
than $2,500**
At-fault accident that occurs on or after Jan. 1, 2004, resulting in property damage in excess of $1,800, but
less than $3,000**
Speeding more than 10 mph over the speed limit provided the total speed is in excess of 55 mph, but less
than 76 mph
Speeding 10 mph or less in excess of speed zone of 55 mph or greater
All other moving violations
At-fault accident that occurs before Jan. 1, 2004, resulting in bodily injury* of $1,500** or less, or property
1
damage in of $1,500 or less**
At-fault accident that occurs on or after Jan. 1, 2004, resulting in bodily injury* of $1,800** or less, or prop-
erty damage in of $1,800 or less**
Speeding 10 mph or less in excess of speed limit of less than 55 mph
*NoSDIPpointswillapplyforBodilyInjuryiftheinsuredfurnishesproofthatcostsweresolelyfordiagnosticpurposes.
**Thegreatestnumberofpointswillbeappliedforat-faultaccidentsresultinginPropertyDamageandDeathorBodilyInjury.
6
Special Exemptions
Speeding10mphorlessoverthepostedspeedlimit;
No SDIP points will be charged for:
providedallofthefollowingaretrue:
· The violation did not occur in a school zone; and
Anaccidentprovidedallofthefollowingaretrue:
· There is not another moving traffic violation for
· There is property damage only;
the experience period (an isolated Prayer for
· The amount of damage is $1,500 or less;
Judgement Continued [PJC] will not count as a
· There is no conviction for a moving violation
prior conviction for the purpose of this
in connection with the accident; and
exception).
· No licensed operators in the household have
convictions or at-fault accidents during the
OnePJCforeachhouseholdeverythreeyears;
experience period. (An insurance company
however:
may require that the insured be covered by
· A second PJC may cause points to be charged
that company for six continuous months.)
according to the underlying convictions.
Insurance Points Will Cost You Money
% of Rate
Cost if Basic
% of Rate
Cost if Basic
Points
Increase
Rate is $300
Points
Increase
Rate is $300
1
25%
$375
7
160%
$780
2
45%
$435
8
190%
$870
3
60%
$480
9
225%
$975
4
80%
$540
10
260%
$1,080
5
105%
$615
11
300%
$1,200
6
130%
$690
12
340%
$1,320
7
Insurance for High Risk Drivers
WhatisaHigh-RiskDriver?
The chart includes no insurance points for drivers
When an insurance company considers you a high-risk
in the household. Also, this chart does not take
driver, it will be harder to obtain insurance, especially at
into account discounts and deviations individual
better rates. Usually drivers are considered a high risk
insurance companies may apply to the final rate.
because of tickets or accidents, reckless or drunk driving
history or being an inexperienced operator.
Thecoveragesconsideredinthechartare:
WhatisanInexperiencedOperator?
· Property Damage and Bodily Injury
An inexperienced operator is a licensed driver who has
Liability;
less than three years driving experience. Adding an
· Uninsured and Combined Uninsured /
inexperienced operator will cause a significant increase in
Underinsured Motorist Coverage with
your premium.
the same limits as the Liability Coverage
Limits and;
The following chart gives examples of some basic
· Medical Payments Coverage with limits of
rates for inexperienced operators in the same area.
$1,000.
Inexperienced Drivers Will Influence Your Premium
Type
Experience
30/60/25
100/300/50
250/500/50
of Policy
Limits
Limits
Limits
0 to 1 year
$641
$759
$802
1 to 2 years
$488
$570
$618
Single
Car
Policy
2 to 3 years
$423
$497
$413
more than 3 years
$145
$193
$225
Ratesaredeterminedwithonelicenseddriveronthepolicy.
8
ReinsuranceFacility
4. Underinsured Motorist Coverage to a
Since the financial responsibility laws require
maximum $1,000,000 each person and each
individuals to be covered for Bodily Injury Liability
accident for Bodily Injury Liability; and
and Property Damage Liability up to the minimum
5. Uninsured Motorist Coverage from the
limits, insurance companies cannot refuse to write
minimum limits required of Bodily Injury
those coverages. If they do not want to bear the
Liability and Property Damage Liability to a
risk, insurance companies will place high-risk
maximum of $1,000,000 each person and each
drivers in the reinsurance facility. The purpose
accident for Bodily Injury Liability, and
of the facility is to assure the availability of motor
$50,000 for property damage (with a $100
vehicle liability insurance to all eligible risks. The
deductible).
types of coverage offered are:
OptionsforHigh-RiskDrivers
1. Bodily Injury Liability from the minimum
It may be difficult for a high-risk driver to obtain
limits required to a maximum of $100,000
Collision, Comprehensive and other coverages that are
each person, $300,000 each accident;
not offered through the reinsurance facility. The most
common method is through a company that writes non-
2. Property Damage Liability from the
standard business.
minimum limits required to a maximum of
$50,000 each accident;
Your company may ask you to sign a "consent to rate"
form. This would mean that you agree to pay rates
3. Medical Payments Coverage from $1,000 to
higher than what has been filed with the North Carolina
a maximum of $2,000 each person; (This
Department of Insurance in order for the company to
coverage is not available for motorcycles.)
write the coverage.
Insurance Tips
ExamplesofDiscounts,DeviationsandCredits
IncreaseDeductibles
You may want to ask your agent or company if you are
You can lower your premium by increasing your
eligible for any discounts. Following are some examples of deductibles. You can choose the deductibles on your
discounts being offered:
comprehensive and collision coverages. In doing this you
· Your vehicle has anti-lock brakes.
will want to consider how much of a loss you can afford
to absorb if you have a claim.
· Your vehicle has an anti-theft device.
· Your vehicle has daytime running lights.
ShopAround(ComparisonShopping)
· You agree to a checkless pay plan (electronic
Shop around, you may find substantial differences
funds transfer).
between quotes. Make sure you are comparing
identical coverages when comparing companies. Make
· You are renewing your policy and did not have a
sure you are dealing with licensed agents and
loss or conviction during the last policy period.
companies. You can check this by contacting the
· You are considered a mature driver (normally age
North Carolina Department of Insurance at
55, but ages for eligibility can vary by company).
1-800-546-5664.
· You have more than one automobile on the same
You can also check a company's ratings. Some
policy.
examples of organizations that rate insurance
· You have insurance on your home and
companies are A.M. Best, Moody's Investors Service,
automobile with the same company.
Standard and Poor's Corporation (S&P) and Weiss
· Your vehicle has a passive restraint system (air
Research. You can typically find information offered
bags, automatic seat belts and other safety
by these organizations at your local library or on the
equipment may qualify).
Internet.
9
PayingYourPremium
BeforeYouBuyaCar
Pay your premium in full. Also, pay on or before the
Before you buy your car ask about the cost of
due date to avoid the risk of cancellation. There is NO
insurance. Some makes and models are higher risks
GRACE PERIOD for automobile insurance. Use a
than others and could result in a higher premium.
check or money order. If you use cash, request a receipt,
With a few models, you may have trouble finding
and keep it in a safe place.
companies willing to provide Comprehensive and
Collision coverages.
Pay your premiums even if you disagree with your
insurance company. Failure to make premium payments
DrivingRecord
may cause cancellation of your policy.
Maintain a clean driving record. A key element in
Some consumers choose to finance their premium.
determining your rates is your driving record.
The method most commonly used is by way of a
Remember that insurance points will remain on your
premium finance company. When dealing with
record for three years.
a premium finance company you should note the
following.
ParentsofTeenagers
If your child does not own a car, make sure the insurer
· You are reaching a separate agreement with the
knows which car the teen will be driving and whether it
finance company. Your insurance company is
will be primary or occasional use.
not lending you the
money.
Coverages
If you have an older model vehicle and it is not
· The finance charges
financed, the benefit from the purchase of
and fees associated
Comprehensive and Collision coverages might not be
worth the cost.
with the loan will
ReadYour
increase your total cost of insurance.
Policy
· The finance agreement must be in writing,
Read your policy and
dated and signed by you. Before the first due
make sure that it lists all
date of the first installment, the finance
coverages you have requested.
company must deliver a copy of the agreement
to you or mail to your address as shown on the
InsuranceIdentificationCards
agreement.
Make sure you have an insurance identification
card. This will provide the necessary insurance
· You should ask your agent for an explanation of
information required from you at the time of an
the charges and fees associated with the
accident.
agreement.
0
Losing Your Insurance
Insurance companies have the right to terminate your Collision,Comprehensive,andCoveragesOtherThan
coverage; however, they must follow the guidelines listed
ThosePreviouslyListed
in your policy to do so. The three ways your policy can
Your insurance company may cancel any coverage other
be terminated are cancellation, nonrenewal and automatic than your Liability, Medical Payments and Uninsured
termination.
Motorists or Combined Uninsured/Underinsured
Cancellation
Motorists by mailing to your last known address at least
10 days advance notice.
Cancellation is when your policy is terminated
Insurance companies review many different factors to
during the policy period. You may cancel your policy determine whether the policy continues to meet their
by returning the policy to the company or agent or
underwriting criteria. Some of the factors that may lead
giving the company advanced written notice of the
to cancellation or nonrenewal are:
date you wish to cancel the policy.
· Non-payment of premium. Remember there
Liability,MedicalPaymentsandUninsured
is NO GRACE PERIOD for automobile
MotoristsorCombinedUninsured/Underinsured
insurance;
MotoristsCoverages
· Excessive claims or accidents;
Your company may cancel your Liability, Medical
Payments and Uninsured Motorists or Combined
· Traffic violations;
Uninsured/Underinsured Motorists coverages by
mailing to your last known address:
· And no longer meeting company guidelines
(Examples include adding a sports car or
1. At least 15 days notice, if cancellation is for
adding an inexperienced operator).
non-payment of premium; or
Nonrenewal
2. At least 60 days notice for all other cases.
Nonrenewal denotes your company's refusal to renew
There are certain reasons your company may cancel
your policy. An insurance company can nonrenew
your Liability, Medical Payments, and Uninsured
your Liability, Medical Payments and Uninsured
Motorist or Combined Uninsured/Underinsured
Motorist or Combined Uninsured/Underinsured
Motorist coverages:
Motorist coverages by mailing to your last known
1. Non-payment of premium;
address at least 60 days notice before the end of
the policy period. Any other coverage may be
2. You are no longer a resident of North Carolina
nonrenewed by mailing to you at least 10 days notice
and are not eligible for a policy through the
before the end of the policy period.
reinsurance facility.
3. The insurance company terminates its contract
Automatic Termination
with your insurance agent;
If the insurance company offers to renew or continue
4. Your premium finance company cancels the
your coverage and you do not accept, the policy will
policy according to the finance contract;
automatically terminate at the end of the current
policy period. Failure to pay the required premium
5. If you knowingly make a material
to renew or continue your policy will mean you do
misrepresentation of:
not accept the offer.
a. The years of driving experience; or
If you purchase other insurance on your covered
b. The driving record of you or any other
automobile, any similar insurance provided by the
driver who lives with you and customarily
initial policy will terminate. The termination will
uses your covered automobile.
occur on the effective date of the other insurance.
Refunds
without any penalty, for canceling during the policy
period.
There are two ways of calculating your refund after
cancellation, pro-rata cancellation and short rate
ShortRateCancellation:
cancellation.
This type of cancellation may be used when you cancel
the policy. It will generate your refund including a
Pro-RataCancellation:
penalty for canceling during the policy period. The
This type of calculation is used when the company
penalty amount varies according to the total premium
cancels your policy. It will generate your refund,
and the amount of time left in the policy period.
After the Accident
Accident Checklist
How will a company determine
Stop your car in a safe place.
who is at-fault?
Move your car, if needed, to protect against
The insurance adjuster investigating the accident
further damage and keep from blocking traffic.
will attempt to determine who is negligent or
at-fault. The Automobile Liability coverage will
Call the police, especially when there are
pay for bodily injury and/or property damage for
injuries or hit and run accidents.
which any insured becomes legally responsible due to
Get information:
negligence.
1. The other driver's name, address, phone
North Carolina Contributory Negligence Law bars
number, license plate number, driver's
a driver from collecting damages if determined to be
license number and insurance information.
partially at fault. In essence, if you contribute to an
accident, you may not be able to collect on a liability
2. The witness' name, address and telephone
claim. Any disagreement will ultimately have to be
number.
resolved in a court of law.
3. Insurance information needed: name of
company and policy number exactly as
If Your Car Can Be Repaired
shown on the other driver's proof of
The insurance company is responsible for the cost to
insurance card.
repair your vehicle. This does not necessarily mean
Don't agree to forget about the accident. You
the estimated amount by the repair facility of your
may have hidden damages, unknown injuries
choice. If the company can have the same repairs
or later find that a lawsuit has been filed
completed at a lower cost from another shop, you may
against you.
be required to pay the difference.
Call your agent if you have any questions or
No insurance company can require the use of after
concerns with the claims process. Your agent
market parts in the repair of your vehicle unless the
could be of assistance when filling out forms
part is equal to the original part in terms of fit, quality,
and documents required to proceed with your
performance, and warranty. Any modifications made
claim.
necessary because of the use of after market parts shall
be included in the estimates. You can choose not to
Who do I call to file a claim?
have after market parts placed on your car, but you
· Your agent or insurance company.
may be responsible for any additional cost.
· If another individual is responsible for your
The insurance company may deduct for depreciation
damages, you need to contact their insurance
when they allow for an entire paint job or when such
agent or company.
items as tires and batteries are replaced. Depreciation is
the decrease in value of the vehicle or part because of age
· The adjuster you are assigned will inform you
or wear and tear.
of any additional steps needed.
2
If Your Car Must be Totaled
If You are Injured
If a motor vehicle is damaged, to the extent that the total
Medical Payments coverage, if purchased, can provide
cost of repair is equal to or exceeds 75 percent of the
some assistance for your doctor and hospital bills,
pre-accident actual cash value (ACV), the insurer shall
regardless of fault.
consider the vehicle a total loss.
Bodily injury claims can include doctor and hospital bills,
When your car is totaled, the insurance company is
laboratory fees, lost wages and pain and suffering that are
responsible for its ACV. ACV represents the local
a direct result of the accident.
market value of the totaled vehicle.
The General Statutes of North Carolina establish no
There are two methods to determine local market value:
guidelines pertaining to the determination or calculation
1. By using the local market price of a
of any amount owed to you for pain and suffering.
comparable vehicle; or
Therefore, if you and the insurance company cannot
agree on the value of your claim you may wish to seek
2. If no comparable vehicle can be located, dollar
legal advice.
estimates from at least two qualified dealers
within the local market area are normally
used.
Frequently Asked Questions
Automobile Insurance Basics
If you do not notify the company within 30 days, there
will be no automatic coverage.
WhathappensifIhavealapseofliability
insurance?
WhathappensifIdropcoverageonafinancedvehicle?
Whenever your liability coverage is cancelled or
First, it is a violation of your finance contract and may
nonrenewed, your insurance company is required to
put your loan in jeopardy. Second, the lender could
notify the North Carolina Division of Motor Vehicles
place single interest coverage on the vehicle and add the
(DMV). The DMV is required to notify you when they
premium to the loan. The coverage is expensive and does
receive the notification. If there is a penalty, the DMV
not provide any coverage for you.
will advise you of such and what action, if any, that you
need to take.
Willmypolicyprovidetherequiredliabilitycoverage
whentravelingtootherstates?
Yes, your policy will automatically meet the minimum
requirements of other states in which you are traveling.
WhataboutdrivinginCanadaandMexico?
Your policy will cover you and meet the requirements of
Canada. Your policy WILL NOT cover you in Mexico.
In the border states, you can purchase Mexican liability
policies from agents who specialize in it.
Arefamilymemberscoveredbymypolicy?
Yes, family members are insured under your policy.
Family member is defined in your policy as a person
related to you by blood, marriage or adoption who is
a resident of your household. This includes a ward or
foster child.
DoIneedtopurchasecoveragewhenIrentacar?
Under certain conditions your automobile policy may
WhatifIbuyamotorcycle?
provide coverage while using a rental vehicle. However,
The automobile policy, if not amended, does not provide
contact your agent for specifics.
any coverage. You can endorse your policy so that it will
extend the coverages to your motorcycle.
Isflooddamagecovered?
Yes, if you have purchased the Comprehensive
Insurance for Young Drivers
coverage.
I'mgoingtocollegeinanotherstate,andmycarisstill
Arecellphonesandstereoequipmentcovered?
registeredinNorthCarolina.Willmy(ormyparents')
Stereo equipment, cell phones, televisions, scanners and
NorthCarolinapolicycoverme?
other media may be covered under certain conditions.
Yes, coverage would still apply. Your premium may be
You should check with your agent to make sure you are
adjusted because of where the vehicle is now located.
properly covered.
Mydaughterisgoingawaytocollege.Canmy
WhenIbuyanadditionalcarorreplaceacar,isthe
companyforcemetokeepheronthepolicyifIwantto
newcarcoveredautomatically?
removeher?
Yes, as long as you notify the insurance company
Yes, your company still must cover her as long as her
within 30 days after acquiring a new vehicle.
permanent residence is your home. Even if she doesn't
Additional vehicles will have the broadest coverage
have a vehicle with her, your policy covers her for liability
of any vehicle listed on your policy. Replacement vehicles when she may borrow a vehicle at school and when at
will have the same coverage as the vehicle it replaced.
home on visits.
4
I'menlistinginthemilitary.Doesmypolicystill
Losing Your Insurance
covermeifI'mstationedinanotherstate?
Your policy will automatically meet the other state's
Doesaninsurancecompanyhavetotellmewhyit
liability requirement. When it is time to renew your
cancelledmyinsurancepolicy?
policy you may be required to purchase insurance in the Yes, a company must give the reason(s) why your policy
state where you are stationed.
was cancelled and the date termination is effective.
Canacompanyrefusetorenewmypolicybecauseof
Mysonhasreceivedhisdriver'slicense.DoIhaveto
claimsthatwerenotmyfault?
addhimtomypolicyifhedropshisowninsurance
Your company can nonrenew your Comprehensive and
policy?
Collision coverages if you do not meet its underwriting
Yes, as long as he is a resident of your household.
criteria, as long as the company gives proper notification.
However, you must notify your agent or company.
Many companies will use frequency of claims, taking into
Failure to do so could jeopardize your coverage.
account at-fault as well as fault-free claims, as one of their
criteria.
My19-year-oldsonnolongerliveswithme.What
canIdotoremovehimfrommypolicyifthecompany Mycompanyrenewedmypolicywithanothercompany
wantstokeephimonmypolicy?
inthesamegroup.Cantheydothat?
Showing proof of insurance with another company can
Yes, if it gives you proper notification that your original
help you remove him. Also, show the company any
policy will be nonrenewed.
documents that will help prove that a change of address
has taken place. Examples of these documents can
Whydidn'tIgetanoticethatmyinsurancepolicywas
include lease agreements, utility billings or receipts, and a cancelled?
current driver's license.
If canceling your Liability, Medical Payments and
Uninsured Motorist or Uninsured/Underinsured Motorist
Doesmychildhavetoberatedonthemostexpensive
Coverages for non-payment of premium, your company
vehicle?
must mail a notice to your last known address at least 15
No, the rates should apply to the vehicle your child
days in advance. Sixty days notice is required for all other
principally operates. If the child is an occasional
reasons.
operator, the rates would apply to the vehicle your child
most frequently operates.
The insurance company is responsible for showing proof
that the notice of cancellation was mailed, not proof that
How Rates Are Determined
you did or did not receive it.
Whydoesmyinsurancecostmorethanmyagentsaid If canceling any coverage other than Liability, Medical
itwould?
Payments and Uninsured Motorists or Uninsured/
A quote is an estimate of your premium. It does
Underinsured Motorists, your company must mail a notice
not offer a firm price or contract. If your agent
to your last known address at least 10 days in advance.
misquoted the premium, your company must correct
it by billing you for the correct premium or refunding
After the Accident
the overpaid amount. Being accurate with your driving
information is the best way to assure correct premium
Whatdoesmypolicyrequiremetodoafteran
charges.
accident?
Whyisithardertogetinsuranceifdriversinmy
· Notify the insurance company of how, when
householdhavebaddrivingrecords?
and where the accident or loss happened. This
When the individuals residing in your house have
should include the names and addresses of
bad driving records, the company knows it has an
anyone who is injured and any witnesses.
increased risk. Your company will consider that risk
· Cooperate with the investigation.
when underwriting the policy. According to the Liability
Coverage section of your policy, any family member is
· Obtain or authorize the insurance company
considered an insured. Anyone driving your covered
to obtain appropriate documents, medical
vehicle with permission is also covered by your policy.
information and other pertinent records.
5
WhenshouldInotifymyinsurancecompany?
Guaranteed Automobile Protection (GAP). GAP
As soon as reasonably possible, while the details are still
insurance covers the difference between ACV and your
fresh in your mind.
loan balance. This is typically only available for new
vehicles. Otherwise, you can be held responsible for
Whatiftheotherdriver'sinsuranceisn'tenoughtopay the difference.
mybills?
Medical: Your Underinsured Motorists (UIM) coverage
Cananinsurancecompanytellmewheretogetmy
will provide protection for the difference between the
carfixed?
other driver's Liability Coverage and the limits under
No. An insurance company cannot require you to go
your UIM coverage. You can find additional coverage
to a particular repair shop. An insurer can suggest a
under the Medical Payments coverage portion of your
repair shop. If the company can have the same repairs
policy. Neither of these coverages are required by law.
completed at a lower cost from a different shop, you
Check with your agent and review your policy to make
may be required to pay the difference.
sure you are adequately covered.
Idon'twanttofileaclaimagainstmycompany
Property Damage: The difference can be covered by
your Collision coverage. Again, check with your agent
becauseitmightraisemyratesorrefusetorenew
and review your policy to make sure you are adequately
mypolicy,butI'mgettingnowherewiththeother
covered.
driver'sinsurer.Anyadvice?
Ifmyonlycoverageisliabilityinsurance,doesmy
An insurance company cannot charge insurance
policycovermymedicalandcarrepairbills?
points for an accident that was not your fault. Your
No, liability insurance only pays for other people's
agent can give you advice about your company's
injuries and property damage for which an insured driver
underwriting and how the claim may affect your
becomes legally responsible.
policy.
Theinsurancecompanywantstototalmycar;Iwant
IfIaminanaccidentandsomeoneelseisat-fault,
tofixit.WhatcanIdo?
doIgetarentalcarwhilemineisbeingfixed?
You have the right to keep the salvage vehicle. When you It is common practice for insurance companies to
do, the insurance company will deduct the salvage value
allow a rental vehicle while your car is being repaired.
from the actual cash value. If requested, the insurance
However, there are no statutes or administrative codes
company must furnish you with the name and address
that require an insurance company to offer a rental
of a salvage dealer who will purchase the salvage for the
vehicle.
amount deducted.
Cantheotherdriver'sinsurancecompanydelay
WhatiftheinsurancecompanyandIcannotagreeon
payingformycarrepairstopressuremeintosigning
theamounttobepaidbymycollisioncoverage?
areleaseonmyinjuryclaim?
You can elect to use the appraisal provision of your
No. If this situation were to arise, you can file
policy. According to the provision, you and the insurance a formal complaint with the North Carolina
company will each choose a competent appraiser. The
Department of Insurance.
two appraisers will then select an umpire. The appraisers
Howlongcanacompanytaketopaymyclaim?
will state separately the ACV and the amount of loss. If
After receiving a claim an insurance company has 30
they do not agree, they will submit their differences to the days to pay the claim, make an offer of settlement,
umpire. A decision by any two will be binding.
deny the claim or advise the claimant that the
The insurance company and the insured will pay its
investigation of the claim is ongoing. Loss and claim
chosen appraiser and bear the expenses of the appraisal
payments should be mailed or delivered within 10
and umpire equally.
business days after the claim is settled.
Howcanmyloanbalancebemorethanmyinsurance
Isthecompanyrequiredtogivemeanexplanation
companysaysmycarisworth?
ofwhyitdeniedmyclaim?
This can occur for many reasons including low down
Yes. The insurance company must provide a reasonable
payments, high interest rates and poor maintenance. You explanation of why your claim was denied in relation
may be able to purchase a type of insurance called
to the policy language or applicable law.
6
Consumer Services and Consumer Complaints
The goal of the Consumer Services Division is
5. Explain the provisions of your insurance
to respond promptly, clearly and courteously
policy contract, as appropriate.
to questions and complaints from the public
6. Suggest to you actions or procedures that you
concerning insurance and to acquaint consumers
may take which could aid in resolving your
with alternatives and courses of action which a
insurance problem.
citizen can pursue to solve a particular insurance
problem.
What We Cannot Do
If you have a problem or concern with an
1. Assume the role as your legal representative, in
insurance company or agent, the North Carolina
or out of court.
Department of Insurance stands ready to assist
2. Interfere in a pending lawsuit on your behalf.
you.
3. Consult with you if you are represented by an
attorney, unless it is with written permission of
A consumer complaint form is attached for your
that attorney.
convenience on page 19.
4. Make a decision as to disputes between
What We Can Do To Help
you and your insurance company or their
representatives which involve matters as to;
1. Forward a copy of your complaint to the
a. Who is negligent or at fault:
insurance company, if appropriate.
b. The facts surrounding the claim (that is,
2. Obtain information or explanations on your
who might be telling the truth in the matter
behalf from the insurance company or its
when accounts differ);
representatives. This may involve written and
c. The value of a claim or the amount of
oral contact with such company or
money owed to you; or
representatives.
d. Any other disagreements between you
and another
party
as to what the
facts might be.
5. Deal with
situations or
companies that
are not subject
to the
insurance laws
of North
Carolina (such
as self-funded
health plans)
or with matters
3. Review in detail the information obtained
governed by other
from the company for compliance with statutes,
state agencies (such as Workers'
regulations and policy contracts.
Compensation claims).
4. Serve as your advocate if we determine that
The North Carolina Department of Insurance pledges
the position of the insurance company or its
to seek fair and equitable treatment of all parties in
representatives is unlawful.
insurance transactions. We are here to serve you.
7
Glossary
Adjuster
FamilyMember
A person licensed by the Department of Insurance whose
A person related to you by blood, marriage or adoption
job is to evaluate the amount of loss and to recommend
who is a resident of your household, including a ward or
the amount the insurance company will pay.
foster child.
Agent
Insured
A person licensed by the Department of Insurance to
The person who is covered by the insurance contract.
solicit and service insurance policies.
Insurer
At-Fault
The insurance company that is underwriting the contract
Negligent.
of insurance.
Claim
LiabilityInsurance
A request to an insurance company for payment of a
Provides protection for the insured against loss arising out
loss.
of legal liability to third parties.
Coverage
Limits
The amount of risk covered by an insurer.
The maximum amount the insurance company will pay
Deductible
in the event of a loss.
The portion of each covered claim you are responsible
Negligence
for paying.
The failure to act as a reasonably prudent person would
Endorsement
have acted under similar circumstances.
An amendment to an insurance contract, creating a
Occupying
change in the original terms.
Means in; upon; getting in, on, or off.
Exclusion
Premium
A provision in an insurance contract that removes
The amount paid in consideration for an insurance policy.
coverage for certain losses or property.
PremiumFinanceCompany
ExperiencePeriod
A lending institution approved by the North Carolina
The three years immediately preceding the date of
Department of Insurance, which finances insurance
application or the preparation of renewal.
premiums for a fee.
How to Reach Us
You can reach the North Carolina Department of Insurance Consumer Services Division at:
(800)546-5664 Toll free
(919)733-2032 Outside of North Carolina
(919)715-0319 TDD (Telephone Device for Deaf Caller)
(919)733-0085 Fax
You can find additional information as well as a downloadable
copy of our complaint form on the North Carolina Department
of Insurance web site at www.ncdoi.com.
The address for the North Carolina Department of Insurance
Consumer Services Division is:
Consumer Services Division
North Carolina Department of Insurance
1201 Mail Service Center
Raleigh, NC 27699
8
File Number: (office use only)
PLEASE DO NOT STAPLE
NORTH CAROLINA DEPARTMENT OF INSURANCE
Jim Long, Commissioner
DR.
(Please type or print. Use additional sheets if necessary)
MR.
MRS.
MS.
my name
name of insured
my address
insurance company
second address line (if needed)
agent
city
state
zip
adjuster
county
date of loss
policy or group number
Phone: Work /
/
claim or certificate number
Home /
/
Type of Insurance (please check one): Life Health
Auto
Homeowners
Other
If Life or Health policy, show the state in which your policy/certificate was purchased:
Are you represented by an attorney in this matter? No
Yes
Name
Details of complaint (attach copies of papers relating to this matter)
The Insurance Department is authorized to send a copy of this document(s) to any company or agency involved. I authorize the release of all
relevant information to the North Carolina Department of Insurance for its use in the review of this matter.
SIGNATURE:
DATE:
Mail to: Consumer Services Division, NC Department of Insurance, 1201 Mail Service Center, Raleigh, NC 27699-1201
9
PS-76
Revised 11/99
20