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Winter 2017  Volume 13, Number 4        


Five Ways You Could Accidentally Lose Your Car Insurance

Forgetting to pay your premiums isn’t the only way to invalidate your automobile insurance.

Insurers in the U.S. are not as strict with drivers as insurers in the U.K. (for instance, if U.K. drivers decide to start driving to work they may need a special endorsement first or their coverage will be void). But there are certain conditions that could invalidate your car insurance in the U.S.

  1. Don’t misrepresent facts When applying for insurance, answer truthfully the questions your agent asks you, such as who will be driving the car besides yourself, what is a reasonable estimate of the miles you drive per year, and the make and model of your car — though misrepresenting this would be foolish since most insurance companies want to know your car’s VIN. You should also let your agent know if you’ve modified your car with a sports kit or performance features. You also want to be clear about whether you’ll be using your car for business or engaging in any kinds of dangerous activities with it (racing or carrying explosives, for instance).

  2. Don’t drive under the Influence of drugs or alcohol Your insurance will cover you if you do get into an accident while intoxicated. But the fines are high. You may lose your license and face prison time. And chances are good your policy will be cancelled. If you are able to buy insurance again, you’ll pay a lot more for it. And for several years until you again have a clean driving record.

  3. Don’t forget to notify your insurance company of certain changes Remember that your insurance policy is a contract and as the insured you have a duty to keep the insurance company notified of certain changes, usually within 30 days after the change occurs.

    You need to advise your insurer of any changes to:
    1. your mailing address or your residence address;
    2. the principal garaging address of any covered auto;
    3. the residents living in your household;
    4. the persons of legal driving age residing in your household;
    5. the persons who regularly operate a covered auto;
    6. an operator’s marital or registered domestic partnership status changes; or
    7. the driver’s license or operator’s permit status of you, a relative, or a rated resident. Your failure to comply with this duty, where material to the risk of loss, may result in our denial of coverage for a claim.

  4. Don’t forget to pay your premiums It’s easy to forget or overlook those payment reminders or renewal notices. And before you know it, you’re driving around somewhere and suddenly remember you and your family have no insurance. It’s not a good feeling. And there is no way to buy auto insurance after a loss as occurred. If you pay in installments, an automatic payment plan may help. If you’re having trouble making payments, call your agent. Maybe there’s a way to work out a payment arrangement or change your coverage. Your agent can help. But call him or her before it’s too late.

  5. Don’t use your car as a transport service or for a ridesharing service like Uber or Lyft — without notifying your agent The typical personal auto policy language excluding business use says: Coverage will not apply for loss:

    1. to any vehicle while being used:
      1. to carry persons or property for compensation or a fee;
      2. for retail or wholesale delivery, including, but not limited to, the pickup, transport or delivery of magazines, newspapers, mail or food; or
      3. for ride-sharing activity.
    2. This exclusion does not apply to shared-expense car pools;

    If you make a business decision to work for an Uber or Lyft or similar outfit, you will most likely need to get a commercial auto insurance policy. Yes, the premium will be more than for a personal auto policy and you will need to take that into consideration of course. Please contact us and we will be happy to let you know what you need and what the costs will be. By the way, did you notice that the business use exclusion does not apply to car pools?

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In this issue:

This Just In...

Five Lessons from Recent Hurricane Losses

Five Ways You Could Accidentally Lose Your Car Insurance

Do You Need Workers’ Compensation for Household Employees?

Does Homeowners Insurance Cover Domestic Workers?



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