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UPDATED: Mar 13, 2020
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In a perfect world, car insurance would simply be a matter of making a single phone call, signing up for a policy within a matter of minutes, and never having to worry about things again. But this isn’t a perfect world. As such, some consumers run into difficulties with their car insurance companies regarding premiums, accident claims, and so forth.
If you’ve had problems with your car insurance company start looking for a better one right now by entering your ZIP code into our FREE search tool on this page!
Though there are many different types of problems, you can have with your car insurance company. How you handle them is important. Some of the most common problems include:
- Incorrect premium calculations
- Billing issues
- Being denied a policy
- Confusion when modifying a policy
- Resolving accident claims
As a general rule, your best bet is to try your hardest to work out issues directly with your insurance company. If you’ve exhausted all of those channels, and the problem is still not resolved, you can always file a complaint with your state insurance department. These agencies, like the one in New Hampshire, can’t necessarily order insurance companies to settle a dispute in your favor, but the intervention they do provide is sometimes enough to motivate companies to do just that.
Incorrect Premium Calculations
If you believe your premiums have been incorrectly calculated then you can certainly discuss the matter with your insurance company. First, you need to figure out if you really have a legitimate complaint. Why? Because your perception of what is too high may actually be a price right in line with industry averages. It may be that something in your driver history or personal details have influenced your rates in a way you hadn’t expected.
To explain what we mean, the South Carolina Department of Insurance offers some great guidance. Their website clearly explains what factors go into calculating car insurance premiums. Though premium calculations are left up to the discretion of each individual car insurance company, they all look at things like your driving history, your claims history, the type of car you drive, how many miles you put on annually, and the other drivers living in your household.
If you think you premiums are too high, ask yourself how many accidents or tickets you’ve had in the last three years. Also, consider your age.
If you’re under 25 or over 65 your age dictates you’ll be paying higher rates.
The point is, feel free to contact your insurance company to discuss your premiums while at the same time being open-minded to the fact that your provider’s calculation may be accurate for your circumstances.
Sometimes a consumer will get an insurance bill in the mail even though he’s already paid his premiums. Other times a bill will contain incorrect information about the policy or the consumer. In all these cases, you should start by calling your insurance company’s billing department to discuss the matter. When you do, have your policy number handy.
If you’re dealing with a good insurance company, you should be able to resolve these sorts of issues right over the phone. Most of the time billing department representatives are courteous, knowledgeable, and ready to help you in any way they can. If you can’t resolve the issue directly with your insurance company, feel free to file a complaint with your state insurance department.
Being Denied a Policy
Believe it or not, car insurance companies do have the right to deny you coverage under certain circumstances. They can deny coverage based on a long history of accident claims, multiple DUI/DWI convictions, multiple insurance lapses due to lack of payment, fraudulent applications, and so on. If you’re ever denied coverage, most states require insurance companies to provide the reasons for their denial in writing.
Most states have adopted a Bill of Rights for drivers in relation to car insurance.
The New Jersey Automobile Consumer Bill Of Rights is just one example. These documents explain what your rights are as a driver in the state where you live. While they are very similar among all 50 states, individual states may have their own idiosyncrasies.
As an example of commonality, all the states make it illegal for a car insurance company to deny you a policy based solely on your sex, skin color, age, religious affiliation, or credit rating. If you could prove a company denied your application based on one of these factors, you would have a legitimate case for civil court.
Confusion When Modifying a Policy
Problems when modifying policies are more common than many of us realize. It’s not that insurance companies are purposely trying to rip off consumers through improper modifications. It’s just that the combination of state regulations and lack of knowledge among consumers sometimes means insurance companies don’t get modifications right the first time. The key to solving these issues is contact your insurance provider and discuss the issue reasonably and sensibly.
Some common types of policy modifications that can cause confusion include adding a new car, dropping a driver who has purchased his own policy, and address changes after moving. In any case, resolving these issues is important to ensure you always have the proper coverage in force. Not getting them resolved could mean a lot of frustration on your part should you have to file an accident claim in the future.
Resolving Accident Claims
According to a published guide from the Ohio Department of Insurance, nearly 70% of the more than 1,300 car insurance complaints they received in 2009 were directly related to claims service. Complaints included claim denials, unsatisfactory delays in claims settlements, and unacceptable settlement offers. Given national trends, we assume similar statistics apply to the rest of the country.
It’s important to note that you are not required to accept any settlement a car insurance company offers. You may want to accept one if you believe it’s fair, as it will save you the hassle of having to go to court. But you do have civil litigation as recourse if you’re unable to reach an amenable agreement with your car insurance carrier.
If you’re the victim of someone else’s poor driving you may end up in court anyway.
In states where insurance law is based on fault assessment, civil court may be the only way for you to recover money for medical costs, lost wages, and pain and suffering. A trial lawyer experienced in auto accident claims is your best bet for these kinds of cases.
Your State Insurance Department
No matter what type of problem you’re having with your insurance company never forget you have an advocate in your state insurance department. In most cases, they will be more than willing to contact your insurance company on your behalf once you filed an official complaint.
As long as the insurance company has not broken the law, insurance regulators are powerless to force them to settle with you in a specific way. Yet many companies will be easier to negotiate with after being contacted by the insurance department.
After filing a complaint, you may be asked by an insurance department representative to enter into mediation. Mediation is a service provided by a disinterested third party whose job is to work out an acceptable agreement for both sides. Mediation is often used to try to settle disputes before they end up in civil court.
If mediation doesn’t work, you may be asked to try binding arbitration. If all else fails there’s always the court system.
Get to Know the System
In wrapping all of this up, we feel it’s important to remind consumers of their responsibility to know how the car insurance system works. Far too often angry drivers who don’t understand the system lash out at insurance companies without cause. Ignorance of how car insurance works leads many to believe that their insurance companies exist for the sole purpose of distributing money to all of their customers. Yet reality is much different.
Car insurance is a business, a business that requires a certain degree of profit in order to remain in operation.
Without profit there would be no investors; without investors there would be no car insurance. Keep that in mind next time someone complains that car insurance companies are more interested in profits than consumers. That may be true, but it is profits that drive an insurance company to look out for the best interests of drivers.
You also need to remember that how you behave behind the wheel is the single most important factor in determining how high your rates will be and what type of reimbursement you’ll get should you file an accident claim.
Only you can make the choice to be a responsible driver. Only you can make the choice to obey the law and drive safely. If you do your part to keep up your end of the car insurance contract, your insurance provider will be more than happy to keep up its end.
Now that you know how to handle problems with insurance companies, start looking for competitive car insurance quotes online by entering your ZIP code into our FREE search tool!