FAQs About Auto Insurance

Whenever your liability coverage is cancelled or nonrenewed, your insurance company is required to notify the North Carolina Division of Motor Vehicles (DMV). The DMV is required to notify you when they receive the notification. If there is a penalty, the DMV will advise you of such and what action, if any, that you need to take.

Are family members covered by my policy?

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. Please note these family members should be listed as drivers under your policy.

Do I need to purchase coverage when I rent a car?

Under certain conditions your automobile policy may provide coverage while using a rental vehicle. However, contact your agent for specifics.

When I buy an additional car or replace a car, is the new car covered automatically by my auto insurance policy?

Yes, as long as you already have an existing automobile insurance policy and you notify your insurance company within 30 days after acquiring a new vehicle. Additional vehicles will have the broadest coverage of any vehicle listed on your policy. Replacement vehicles will have the same coverage as the vehicle it replaced. If you do not notify your automobile insurance company within 30 days, there will be no automatic coverage.

Does my liability insurance cover me for liability while I am using my vehicle in service of a Transportation Network Company (TNC) such as Uber and Lyft?

No, the automobile policy contract does not cover for liability arising out of the ownership or operation of a vehicle while it is being used as a public livery or conveyance. This includes but is not limited to any period of time that insured is logged into a TNC as a driver, whether or not a passenger is occupying the vehicle.

My daughter is going away to college. Can my company force me to keep her on the policy if I want to remove her?

Yes, your company still must cover her as long as her permanent residence is your home. Even if she doesn’t have a vehicle with her, your policy covers her for liability when she may borrow a vehicle at school and when at home on visits.

I’m going to college in another state, and my car is still registered in North Carolina. Will my (or my parents’) North Carolina policy cover me?

Yes, coverage would still apply. Your premium may be adjusted because of where the vehicle is now located.

I’m enlisting in the military. Does my policy still cover me if I’m stationed in another state?

Your policy will automatically meet the other state’s liability requirement. When it is time to renew your policy you may be required to purchase insurance in the state where you are stationed.

My son has received his driver’s license. Do I have to add him to my policy, if he drops his own insurance?

Yes, as long as he is a resident of your household. However, you must notify your agent or company. Failure to do so could jeopardize your coverage.

My 19-year-old son no longer lives with me. What can I do to remove him from my policy if the company wants to keep him on my policy?

Showing proof of insurance with another company can help you remove him. Also, show the company any documents that will help prove that a change of address has taken place. Examples of these documents can include lease agreements, utility billings or receipts, and a current driver’s license.

The insurance company is charging me a fee because I cancelled my policy with them. Is this legal?

The company may be assessing you whats called a short rate cancellation. If you canceled your auto policy prior to the policys expiration date, your contract allows them to cancel on a short rate basis. The company will calculate how many days the policy was in force and using percentages in the personal auto manual, calculation will be done to determine how much is owed or if a refund is due. Short rate cancellation is not a NC law, but it is apart of the policy contract.

The insurance company wants to total my car; I want to fix it. What can I do?

You have the right to keep the salvage vehicle. When you do, the insurance company will deduct the salvage value from the actual cash value. If requested, the insurance company must furnish you with the name and address of a salvage dealer who will purchase the salvage for the amount deducted.

What if the insurance company and I cannot agree on the amount to be paid by my collision or other than collision (Comprehensive) coverage?

You can elect to use the appraisal provision of your policy. According to the provision, you and the insurance company will each choose a competent appraiser. The two appraisers will then select an umpire. The appraisers will state separately the ACV and the amount of loss. If they do not agree, they will submit their differences to the umpire. A decision by any two will be binding.

The insurance company and the insured will pay its chosen appraiser and bear the expenses of the appraisal and umpire equally.

I don’t want to file a claim against my company because it might raise my rates or refuse to renew my policy, but I’m getting nowhere with the other driver’s insurer. Any advice?

An insurance company cannot charge insurance points for an accident that was not your fault. Your agent can give you advice about your company’s underwriting and how the claim may affect your policy.

If I am in an accident and someone else is at-fault, do I get a rental car while mine is being fixed?

It is common practice for insurance companies to allow a rental vehicle while your car is being repaired. However, there are no statutes or administrative codes that require an insurance company to offer a rental vehicle.

How long can a company take to pay my claim?

After receiving a claim an insurance company has 30 days to acknowledge the claim. The acknowledgment shall be one of the following, make an offer of settlement, deny the claim, make payment of the claim, or advise the claimant that the investigation of the claim is ongoing. Loss and claim payments should be mailed or delivered within 10 business days after the claim is settled.

Is the company required to give me an explanation of why it denied my claim?

Yes. The insurance company must provide a reasonable explanation of why your claim was denied in relation to the policy language or applicable law.

If my only coverage is liability insurance, does my policy cover my medical and car repair bills?

No, liability insurance only pays for other people’s injuries and property damage for which an insured driver becomes legally responsible.

What if the other driver’s insurance isn’t enough to pay my bills?

Medical – Your Underinsured Motorists (UIM) coverage can provide protection for the difference between the other driver’s Liability Coverage and the limits under your UIM coverage. You may find additional coverage under the Medical Payments coverage portion of your policy. Check with your agent and review your policy to make sure you are adequately covered.

Property Damage – The difference could be covered by your Collision coverage. Again, check with your agent and review your policy to make sure you are adequately covered.

Can a company refuse to renew my policy because of claims that were not my fault?

Your company can nonrenew your Other Than Collision (Comprehensive) and Collision coverages if you do not meet its underwriting criteria, as long as the company gives proper notification. Many companies will use frequency of claims, taking into account at-fault as well as fault-free claims, as one of their criteria.

Does an insurance company have to tell me why it cancelled my insurance policy?

Yes, a company must give the reason(s) why your policy was cancelled and the date termination is effective.

Why does my insurance cost more than my agent said it would?

A quote is an estimate of your premium. It does not offer a firm price or contract. If your agent misquoted the premium, your company must correct it by billing you for the correct premium or refunding the overpaid amount. Being accurate with your driving information is the best way to assure correct premium charges.

Why is it harder to get insurance if drivers in my household have bad driving records?

When the individuals residing in your house have bad driving records, the company knows it has an increased risk. Your company will consider that risk when underwriting the policy. According to the Liability Coverage section of your policy, any family member is considered an insured. Anyone driving your covered vehicle with permission is also covered by your policy.

Does my child have to be rated on the most expensive vehicle?

No, the rates should apply to the vehicle your child principally operates. If the child is an occasional operator, the rates would apply to the vehicle your child most frequently operates.

Will my policy provide the required liability coverage when traveling to other states?

Yes, your policy will automatically meet the minimum requirements of other states in which you are traveling.

How can my loan balance be more than my insurance company says my car is worth?

This can occur for many reasons including low down payments, high interest rates and poor maintenance. You may be able to purchase a type of coverage called Guaranteed Automobile Protection (GAP). GAP coverage covers the difference between the actual cash value of your car and your loan balance. This is typically only available for new vehicles. Otherwise, you can be held responsible for the difference.

Can an insurance company tell me where to get my car fixed?

No. An insurance company cannot require you to go to a particular repair shop.

What does my policy require me to do after an accident?

Notify the insurance company of how, when and where the accident or loss happened. Include the names and addresses of anyone who is injured and any witnesses. Cooperate with the investigation. Obtain or authorize the insurance company to obtain appropriate documents, medical information and other pertinent records.

Why didn’t I get a notice that my insurance policy was cancelled?

When canceling your Liability, Medical Payments and Uninsured Motorist or Uninsured/Underinsured Motorist Coverages for non-payment of premium, your company must mail a notice to your last known address at least 15 days in advance. Sixty days notice is required for all other reasons.

The insurance company is responsible for showing proof that the notice of cancellation was mailed, not proof that you did or did not receive it.

If canceling any coverage other than Liability, Medical Payments and Uninsured Motorists or Uninsured/ Underinsured Motorists, your company must mail a notice to your last known address at least 10 days in advance.

My company renewed my policy with another company in the same group. Can they do that?

Yes, if it gives you proper notification that your original policy will be nonrenewed.

Is flood damage covered?

Yes, if you have purchased Other Than Collision (Comprehensive) coverage.