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ARE THERE ANY SPECIFIC TIME
LIMITS FOR AN INSURANCE COMPANY TO PAY FOR
COLLISION OR COMPREHENSIVE CLAIMS?
There are no specific time limits for the
settlement of claims. Insurance companies
are required by law to pay all claims in a
prompt and reasonable amount of time. However,
what constitutes "prompt and reasonable"
may vary from claim to claim. Claims that
require special or extended investigation
may take longer to resolve. Inclement weather
conditions often cause an increase in the
number of claims filed and that can slow the
process down as well.
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MY AUTO WAS DECLARED A TOTAL
LOSS BECAUSE OF AN ACCIDENT. IS MY COMPANY
REQUIRED TO GIVE ME THE REPLACEMENT COST?
When your auto is declared a total loss,
unless you made special arrangements and paid
an additional premium, your insurance company
will only pay you the actual cash value of
the auto as of the date of the loss, not the
cost to replace it. Your auto's value is determined
by the following factors: the retail value
for an auto of like kind and quality prior
to the accident; the price paid for the auto
plus the value of prior improvements to the
auto at the time of the accident; the decrease
in value of the auto resulting from prior
unrelated damage which is detected by the
appraiser or for which a claim has been paid;
and the actual purchase cost of an available
auto of like kind and quality.
If your auto has substantial value because
of its exceptional condition such as an antique,
classic, or restored auto, you should have
it appraised and then insure it for the appraised
value.
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DO I HAVE TO PAY AN INSURANCE
PREMIUM AFTER MY AUTO IS DECLARED A TOTAL
LOSS?
Yes, the auto is considered insured until
the policyholder returns the license plates
to the Registry of Motor Vehicles. If you
don't have your license plate because your
auto was stolen or because your auto and plates
were burned in a fire, then you have to go
the nearest Registry of Motor Vehicles office
and obtain a lost or stolen plate(s) receipt
and use that instead. You must give this receipt
to your insurance company in order to cancel
your policy and avoid paying any additional
premium.
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MAY I KEEP MY AUTO IF I HAVE
A COLLISION, LIMITED COLLISION OR COMPREHENSIVE
CLAIM AND MY INSURANCE COMPANY DECLARES IT
A TOTAL LOSS?
No, your insurance company has the option
to take title to your auto because it is entitled
to any salvage value your auto may have. You
can, of course, negotiate with your company
to purchase your auto for the agreed salvage
value.
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THE BODY SHOP IS REPAIRING
MY AUTO AFTER AN INSURED LOSS. WILL MY INSURANCE
COMPANY PAY FOR USED OR NEW PARTS?
If the repair of the damaged part impairs
the operational safety of the auto, then the
insurance company will pay to replace it with
a new part. But, for non-safety parts, unless
your claim occurs during the first year after
your car was manufactured, you are not entitled
to new ones. State regulation allows for the
replacement of damaged parts with used or
reconditioned parts as long as they are of
like kind and quality. This means that a three-year
old door will not get replaced by a brand
new one. You can insist on new parts, but
you will have to pay the difference in cost.
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AN OBJECT DAMAGED MY WINDSHIELD
AND I AM UNABLE TO DETERMINE WHERE IT CAME
FROM. AM I COVERED FOR THIS LOSS?
Yes, if you have comprehensive insurance
you are covered for the full amount of the
loss, unless you opted for a $100 deductible
for glass breakage. The $300, $500, or $1000
deductible, or whatever you may have selected
for comprehensive coverage, does not apply
to a glass loss.
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CAN MY INSURANCE COMPANY DENY
A CLAIM FOR DAMAGES TO MY AUTO IF THE PRINCIPAL
PLACE OF GARAGING LISTED ON MY APPLICATION
IS FALSE?
Yes. If you or someone on your behalf gives
false, deceptive, misleading or incomplete
information in any application and if such
information increases the insurance company's
risk of loss, then your company may refuse
to pay claims under any or all of the Optional
Insurance Parts of the policy. Such information
includes the description and place of garaging
of the vehicles to be insured, the names of
the operators required to be listed and the
answers given for all listed operators.
In the event that you have moved since you
filled out your initial application, promptly
notify your insurance company and the Registry
of Motor Vehicles of your new address.
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IS MY INSURANCE COMPANY REQUIRED
TO NOTIFY ME OF ITS DECISION TO CANCEL MY
POLICY?
Yes. Your company must send you a notice
at least 20 days prior to the effective date
of the cancellation. A notice sent by regular
mail with a certificate of mailing receipt
obtained from the Post Office is considered
sufficient. A certified or registered mail
with a return receipt is no longer required.
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WHAT CAN I DO IF I ACTUALLY
RECEIVE A CANCELLATION NOTICE?
You can pay the exact amount called for
on the notice or, if you feel that the cancellation
is unjust, you may submit a written complaint
to the Board of Appeals at 470 Atlantic Avenue,
Boston 02210-2223. This must be done prior
to the effective date of cancellation.
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WHO IS LIABLE FOR THE STORAGE
CHARGES ON MY DAMAGED AUTO WHEN THERE IS A
DISPUTE AS TO THE AMOUNT OF THE CLAIM PAYMENT?
The insurance company is responsible for
paying storage charges until it makes a reasonable
offer to settle the claim. However, if the
consumer disputes the amount offered and the
company revises its offer, this does not necessarily
mean that the original offer was unreasonable.
Disputes over what is reasonable can be resolved
with your company through the process described
in your insurance policy. You can also submit
a written complaint to the Division of Insurance
if you are unable to settle the dispute.
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MAY AN INSURANCE COMPANY REQUEST
A DOWN PAYMENT IN ADVANCE WHEN I PURCHASE
OR RENEW AN AUTO INSURANCE POLICY? AND IS
IT POSSIBLE TO PAY MY PREMIUM MONTHLY??
Your insurance company may request up to
a 30 percent down payment of the annual premium
prior to the renewal or issuance of your policy.
Most companies do offer a monthly type payment
plan for the balance of the premium or something
similar. You should check with your company
to see what options are available to you.
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IF I OWN AN AUTO WITH COLLISION
AND COMPREHENSIVE COVERAGE, WILL MY INSURANCE
APPLY TO THE RENTAL OF ANOTHER PRIVATE PASSENGER
AUTO?
Yes, however there may be substantial limitations.
Your collision and comprehensive insurance
are transferable to a substitute rented or
borrowed private passenger auto that is damaged
while it is being operated by you and by members
of your household.
Many auto rental companies require that you
reimburse them for the REPLACEMENT COST (RC)
of any damages incurred to their vehicle.
Your auto policy only provides for ACTUAL
CASH VALUE (ACV) coverage, minus the deductible.
ACV is equal to Replacement Cost minus depreciation.
Since your Collision/Comprehensive coverages
are on an ACV basis, you can be held liable
for the Depreciation amount, plus, of course,
the deductible.
Also, the insurance company will calculate
the value of your covered vehicle in the amount
they offer for coverage of a damaged rental
vehicle. If you own a five year old
compact car, you cannot expect the insurance
company to reimburse a rental company for
a brand new top of the line SUV or Sedan you
may be renting. You will be held responsible
for the difference, which could be quite substantial.
Also, the rental company will most likely
expect you to pay their full rental fee for
any period of time their vehicle is undergoing
repairs. Unless you have Substitute
Transportation coverage, you will be held
responsible for these costs. If you
have Substitute Transportation, the insurance
company will pay up to your daily limit for
rental coverage as determined by a company
adjuster. This amount may be less than
the actual rental cost, and the rental company
may decide the car is not driveable for a
longer period than the company adjuster, leaving
you once again responsible for the shortfall.
There is no coverage under your policy for
family friends or significant others. You
should be aware that your coverage is available
only if you rent or borrow a private passenger
auto in the United States or Canada.
You should also be aware that your policy
does not provide coverage for borrowed or
rented trucks. If you are renting a truck,
you should check with the rental company regarding
the purchase of collision and comprehensive
insurance. If you are borrowing a truck, make
sure you determine whether or not the owner
has purchased collision or comprehensive coverage.
If the owner does not have insurance, you
may be personally liable for any damage to
that truck which is the result of your negligent
operation. Last, if the use is for business
rather than pleasure, call your agent first.
Business use is usually not automatically
covered. In any event, remember that the coverage
is for what is basically a substitute vehicle,
not an additional one.
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