Automobile Insurance

6 Know Your Rights Good Driver Provision. Every automobile insurance company must offer coverage for Good Drivers. A Good Driver is a person who has been licensed for at least three consecutive years and has no more than one- point on his or her driving record. It is important to note that your rates as a Good Driver must be at least 20% lower than a non-Good Driver’s rates would be at the same insurance company. Cancellation/Nonrenewal Provisions There are only three reasons an automobile policy can be canceled/non-renewed once it is issued: 1. Fraud/material misrepresentation; 2. Non-payment of premium; or 3. Substantial increase in the hazard insured against. In relation to a cancellation for nonpayment of premium, the insurance company must provide you with 10-day written notice after the payment due date before the insurer can effectively cancel the policy. Auto Insurance Costs Premium A premium is the amount you pay to the insurance company to buy your auto policy. The premium covers the term or length of the policy. The term can vary from one month to one year. Most insurance companies allow you to pay the premium in installments. Ask if there is an extra fee for doing this. Deductible Some kinds of coverage have deductibles. A deductible is the amount of loss which the insured is responsible to pay.

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