Frequently Asked Questions
1. When can an insurance company consider my car a"total loss?
- When the repair cost approaches or exceeds the actual cash value of the car.
2. I recently had an accident in my five year old car and the company wants to repair it by using used parts. Can they do this?
- Yes. The company may have your car repaired with parts of like kind and quality, which would include used parts.
3. Under the terms of the physical damage coverage in my automobile policy, do I have the right to make the decision as to whether to repair, replace, or to receive cash for my wrecked auto?
- No. That is one of the rights given to the company by your policy.
4. Will an insurance company pay to replace items such as tires or batteries that are damaged in an accident?
- Yes. However, an insurance company will not necessarily pay for 100% of the replacement cost of such items as tires, batteries, or entire paint jobs. These items may be subject to a deduction for depreciation for the amount of time the item had been in use prior to the accident.
5. Will my comprehensive coverage provide payment to me if my belongings are stolen from my car?
- Generally, only if the belongings are considered "automobile equipment" will the loss be covered. If the property is not automobile equipment, the loss may be covered under your homeowners policy.
6. If I am involved in an accident where the other party was at fault, am I entitled to compensation for renting a substitute vehicle while my vehicle is being repaired?
- If the other party's insurer assumes liability for the accident, you would be entitled to recover reasonable costs which were incurred in hiring a comparable substitute vehicle for the period during which you are deprived of the use of your vehicle. The rental may not exceed a reasonable period of time for repairs to be made. You have an obligation to keep these costs to a minimum. You should provide the insurance company with a receipt for the rental cost. If the company does not accept liability, you would have to carry "Rental Reimbursement Coverage" which is an optional coverage available to you under your own policy.
7. If my friend asks to use my car for his own errands, will my automobile insurance provide coverage to him while he is driving?
- Yes. All automobile liability policies in Virginia provide coverage to a "non-owner" operator if they are driving the vehicle with the permission of the "named insured."
8. If I choose to cancel my policy before its expiration, can the company charge me a fee?
Yes. Policyholders who cancel before the expiration date may be charged an administrative "short-rate" fee by the company to cover their costs for processing the cancellation. The short-rate fee is usually a substantial amount.
9. Why am I considered an "Assigned Risk"?
You become an assigned risk when no insurance company will voluntarily insure you. You may apply through any licensed insurance agent for your coverage to be assigned to an insurance company. Your application will then be processed and assigned to a company by the Virginia Automobile Insurance Plan.
10. If because of my driving record, I must purchase insurance through the Virginia Automobile Insurance Plan, how long must I remain in the Plan?
You only have to remain in the Plan until you can purchase coverage in the regular (voluntary) market. Before each renewal, you should attempt to purchase insurance in the regular market by contacting companies or agents representing companies to see if they will accept you. The fact that one company will not accept you does not mean that other companies will not be able to accept you. If you have had no new accidents or violations you may be able to find a company that will accept you.
11. What happens if the Department of Motor Vehicles (DMV) determines that I have not met the financial responsibility requirement?
If DMV determines that you have not met the financial responsibility requirement, DMV may suspend your license and require an SR-22 form to be filed by your insurance company and require you to pay the $500 Uninsured Motor Vehicle fee.
12. Does the Uninsured Motor Vehicle fee provide insurance?
No, this fee allows you to register and operate an uninsured vehicle without purchasing insurance. This fee does not provide any insurance protection. If you elect to pay this fee and not purchase insurance, you will be personally responsible for any injuries or damages for which you are legally liable as a result of an automobile accident.
13. DMV has required me to have an insurance company file an SR-22 on my behalf. What does this mean?
The SR-22 is a form that confirms that you are complying with the financial responsibility laws of Virginia. It is usually required in instances where you have had an accident with no liability coverage or as a result of a serious violation. The form must be filed with DMV by your present insurance company. If the policy is ever cancelled or nonrenewed, the company must notify DMV.
14. What is the difference between points assigned to my driving record by DMV and an insurance "point" on my policy?
An insurance company may assign "points" for a conviction or for an accident where you were either partially or wholly at fault. It is a surcharge to the policy's premium and has nothing to do with the points on your motor vehicle record. DMV assigns points to your driving record for violating motor vehicle laws.
15. Can a family member's poor driving record affect my premiums or insurability if my driving record is clear?
Yes. Virginia private passenger automobile policies automatically provide certain coverage to all members of the household. Because of this, companies may consider the driving records of all residents of your household when deciding whether to insure you or what your premium will be.
16. Is there a grace period for late payment?
No. The company may cancel your policy for non-payment if the payment is even one day late.
17. May an insurance company use non-original manufactured parts or "after market" parts in preparing an estimate for my vehicle that was involved in an accident?
Yes. The company may have your car repaired with after market parts. However, they must disclose on the estimate or on a separate document that the estimate is based on the use of after market parts.
18. How long does a company have to settle my claim?
The company should acknowledge receipt of your claim report within ten working days. There is no specific time limit in which the company must settle your claim. Since each claim is different, the length of time to settle may vary.
19. If my car is determined to be a total loss, can I keep the vehicle?
Yes. However, the company's settlement offer will be reduced by the salvage value of your vehicle. Salvage value is the value of the vehicle after the loss.
20. Is there any one method a company must use to determine the value of my vehicle when settling a total loss claim?
There are many different methods a company may use to determine the value of your vehicle. There is no method prescribed by law.
21. Do I have the right to select the repair facility to conduct the repairs to my vehicle after it has been involved in an accident?
Yes. Although many companies will suggest body shops or repair facilities, the final decision is yours.
22. I am dissatisfied with the repair work done to my vehicle by a repair facility I chose. What obligation does the insurance company have to correct this?
The insurance company is responsible for paying for repairs to your vehicle. Since you chose the repair facility, you are responsible for making sure the job is done satisfactorily.
23. I was involved in an accident. The other person's insurance company has denied my claim based upon contributory negligence. What is contributory negligence?
Virginia is a contributory negligence state. Contributory negligence is a principle of law that recognizes that injured persons may have contributed to his/her own injury. For example, by not observing the "Don't Walk" sign at a crosswalk, pedestrians may cause accidents in which they are injured. This means if you are responsible for the accident in any way, you could be prevented from recovering from the other party.
24. Does my agent have to inform me if he sells me an automobile club service agreement or an accidental death and dismemberment policy together with an insurance policy?
Yes, a written disclosure must be given to you which includes the name or type of each insurance policy and automobile club service agreement that you have agreed to purchase, the premium quotation for each policy, and a statement that you have elected to purchase these products. If your application for insurance was made by telephone or electronically, this disclosure must be mailed to you within 10 days of the date of application.
25. Does my automobile insurance policy cover me if I have an accident in another country, such as Canada or Mexico?
Your automobile insurance policy covers you for accidents that occur within the United States, its territories or possessions, and Canada. It does not cover you for accidents which occur in Mexico or other countries. Before driving in another country, you should find out how much insurance is required to be carried in that country and how to purchase it. Before you drive in Canada, you should ask your insurance company to provide you with the appropriate certificate or verification of insurance.
26. Can an insurance company refuse to issue me a policy or increase my premium if I have bad credit or if someone in my household has bad credit?
Yes, but your insurance company cannot nonrenew your policy solely on the basis of your credit report. If an insurance company takes an adverse action based in whole or in part on your credit report, the insurance company must tell you the primary characteristics that were used as the basis for the adverse action or tell you that you have the right to request this information. Also, if your insurance company uses your credit report to rate or underwrite your policy, it must tell you at the time of application that you have the right to request that your credit report be updated (no more than once during any policy term) and that you have the right to question the accuracy of the credit information. Certain factors may not be used when evaluating your credit information, such as your income, gender, address, zip code, ethnic group, race, color, religion, marital status, and nationality. Other factors are prohibited, too, such as information shown your credit report as being in dispute, insurance inquiries, non-consumer initiated inquiries, and those indicated as being medical industry accounts.
27. Will my automobile insurance policy cover physical damage resulting from acts of terrorism?
If you have purchased comprehensive coverage and the damage is the result of a covered peril, coverage cannot be excluded if it was the result of an act of terrorism.
