Policyholder 101: What are your rights & responsibilities?
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As a car insurance policyholder, you need to be aware of both your rights and responsibilities. You are much more than just someone who is responsible for paying the insurance bill each month. And while there can be more than one policyholder for an insurance policy, you both share the responsibilities equally. That’s why it's important to be fully aware of what a policyholder actually is, and what rights you have as one.
What is a car insurance policyholder?
As stated above, the policyholder is responsible for ensuring the insurance bill is paid on time. For the sake of the policy, you will also be considered the named driver, even though others in your family may be driving the automobile (they should be listed on the policy as covered drivers).
As the policyholder, you have the right to change the amount and types of insurance coverage at any time; drivers who are simply covered by the policy do not have this right. If you wish for someone else to be able to make changes to the policy - a spouse, for example - they must also be listed as a policyholder, and not just a covered driver.
As you can see, the policyholder can do much more with the insurance policy than those who are just covered by it. But in addition to your rights, you also have several responsibilities you must be aware of too. Following are the most important rights and responsibilities of a car insurance policyholder.
The Rights of a Policyholder
As mentioned above, you have the right to change, or even cancel, your insurance policy at any time. For example, if you wanted to add more coverage for collision, or remove theft coverage, you simply need to contact your insurance agent. In many cases, you can also adjust the types and levels of coverage online.
You also have the right to add or remove drivers. If a child is moving and is going to purchase their own insurance coverage, for example, you can have them removed as a listed driver from your own policy.
If you have filed a claim with your insurance provider, you have the right to swift management of claims. That means you can inquire at any time as to the status of a claim, as well as the right to know why a claim was denied.
Lastly, if you feel you are being denied coverage because of race, gender, age, or another discriminatory reason, you can report the insurance company to the authorities.
Responsibilities of a Car Insurance Policyholder
Just as you have rights as a car insurance policyholder, you also have several responsibilities. First and foremost, you are responsible for paying the monthly premiums on time. Failure to do so can result in a cancellation of your policy, and you may be required to pay additional fees in order to have your policy reinstated.
Other than that, your legal responsibilities should be clearly defined in the contract you sign and receive from your insurance provider. They normally include the following:
1. Take Good Care of Your Car
You are required to take care of your car to the best of your ability, as well as keep it protected from damage or theft, again to the best of your ability. If you need to file a claim at a later point and it can be proven that you were negligent with your care of the car, ultimately resulting in the reason for the claim, your claim might be denied.
2. Keep Your Policy Details Up to Date
For example, if one of your children reaches driving age and begins to start driving your car, you need to update the policy to reflect this.
3. Report Any Accidents, Damages, or Theft as Quickly as Possible
In the event of an accident, contact the police first so that they can gather all the necessary information they need to make their report. Afterward, so long as no medical care is needed, contact your insurance company. Provide them with the same details that you gave the authorities regarding the accident. The police can also give you the insurance information of any other parties if applicable.
Your Responsibility in the Event of an Accident
If an accident does occur, whether you are driving the vehicle or not, and depending upon the state you reside in, you may be liable for the results. It also depends, of course, on what type of coverage you have, and whether the accident was deemed your fault or the fault of a driver listed on your policy.
If the driver is someone not listed on your policy, such as a family member or friend you loaned the car to, then either they will be responsible under their own insurance policy, or a court will decide liability.
Liability can sometimes be tricky, and insurance companies (and sometimes lawyers) will need to interview witnesses, read police reports, and examine other details regarding the accident before a determination of liability can be made. For that reason, it is recommended that in addition to collision insurance, you also add theft and liability insurance to your policy as well.
You can also opt for umbrella coverage, which helps protect you in many events that you might not normally be able to afford on your own.