Writing Your Own Auto Insurance Policy

While it is not possible to write your own auto insurance policy, you can choose to add certain coverages to your policy. You can also decide to add or remove drivers from your policy. However, you cannot insure a car that is not in your name, but there are some exceptions. For instance, if you live with the owner of the car, you can be added to their insurance policy.

Policy additions and removals

Adding Drivers to Your Policy

It is crucial to add all licensed household members, such as your spouse and children, to your auto insurance policy. This also includes other licensed household members like nannies or roommates. Anyone who regularly drives your vehicle should be listed as a driver. Additionally, if a person occasionally uses your car, you can add them as a partial or occasional driver to ensure they are covered by your policy. It is important to contact your insurance company to understand their specific guidelines and procedures for adding drivers.

Adding Vehicles to Your Policy

You can easily add vehicles you own to your existing insurance policy. This includes adding a new, used, or second car. Depending on your state and insurer, you may also be able to insure someone else's vehicle if it is kept at your residence and the owner lives with you. When adding a vehicle, you will typically need to provide the Vehicle Identification Number (VIN), license plate number, make, and model. Some insurers may also inquire about the vehicle's mileage and condition. Keep in mind that some insurers may limit the number of vehicles that can be listed on a single policy.

Removing Coverage

If you are looking to save on your insurance premiums, you can consider removing certain optional coverages such as collision and comprehensive insurance. However, it is important to weigh the risks and benefits before making any removals, as this could leave you financially vulnerable in the event of an accident.

Adding Coverage or Endorsements

You have the option to add various types of coverage or endorsements to your policy. For example, if you are concerned about mechanical breakdowns, you can add mechanical breakdown coverage. Additionally, if you have modified your vehicle, you may need to add an endorsement to your policy to ensure it is adequately covered. Endorsements can also provide additional protection, such as coverage for loss of use or replacement costs for brand-new vehicles.

Increasing Coverage Limits

It is recommended to periodically review and adjust your policy coverage limits. Life changes, such as purchasing a new vehicle, inheriting a large sum, or adding teenage drivers, may warrant increasing your coverage limits. This will ensure that you have sufficient protection in the event of a major accident.

Policyholder rights and responsibilities

Rights of the Policyholder:

• The policyholder is the primary party responsible for paying premiums and entitled to the benefits and coverage outlined in the policy.
• Policyholders have the right to not be declined by an insurance company based on discriminatory factors such as gender, age, religion, sexual orientation, or race.
• They have the right to cancel their insurance policy at any time and switch to a different provider if desired.
• Policyholders cannot be denied coverage based on credit history, and insurance providers must explain why they turned down coverage.
• Policyholders have the right to acquire their driving record and review it for accuracy.
• They have the right to receive prior notice if their insurance policy is cancelled or not renewed.
• In the event of an accident or covered incident, policyholders have rights that ensure fair treatment and prompt claims handling by the insurance company.

Responsibilities of the Policyholder:

• The policyholder is responsible for paying premiums on time and ensuring continuous coverage to remain compliant with state laws.
• They must understand their insurance policy, including coverages, exclusions, and other important provisions.
• Policyholders should keep their insurance provider informed about any changes, such as buying or selling a vehicle or adding new drivers to their household.
• It is the policyholder's responsibility to comply with their state's financial responsibility laws and maintain the required level of auto insurance.
• They should drive safely and take necessary precautions to preserve their rights and avoid accidents or incidents that may lead to claims.

Policyholder eligibility

Who Can Be a Policyholder?

The policyholder is the individual or entity that owns the auto insurance policy. Generally, anyone who owns or legally operates a vehicle can be a policyholder. This includes individuals, families, businesses, and organisations. However, specific eligibility requirements may vary depending on the insurance provider and the type of policy being sought. It's worth noting that there can only be one principal policyholder per policy.

Responsibilities of a Policyholder

The policyholder has several important responsibilities. They are responsible for paying premiums, managing the policy, and ensuring that the policy is up to date. This includes informing the insurer about any changes in circumstances, such as moving to a new house or getting a new job, that could impact the insurance premium. Additionally, the policyholder is responsible for initiating the claims process in the event of an accident or vehicle theft. They need to contact the insurance company as soon as possible and provide all the necessary information for processing the claim.

Differences Between Policyholders and Named Drivers

It's important to distinguish between policyholders and named drivers. A named driver is someone who is added to the policyholder's insurance policy as an additional driver. While they enjoy the same level of cover as the policyholder, they do not own the policy and have less control over it. Policyholders, on the other hand, have the authority to make necessary changes, add drivers, and pay premiums.

Adding Drivers to the Policy

Policyholders can add other drivers to their policy. This includes licensed household members, such as a spouse, children, and other relatives. In some cases, roommates or non-family members who reside at the same address may also be added. It's important to note that there should be a valid justification for adding drivers, and insurance companies may have their own guidelines on this matter.

Managing Payments and Coverage

The policyholder is responsible for making timely payments to the insurance company to maintain continuous coverage. They can also make decisions about the types of coverage they want and can request to increase coverage amounts or add additional products, such as underinsured motorist coverage or comprehensive coverage. It's recommended to purchase more than the minimum insurance required by the state for better protection.

Impact on Premium

Adding additional drivers to the policy may impact the premium. The age, driving history, and relationship of the added drivers to the policyholder are factors that insurance companies consider when determining the premium. Therefore, it's essential to understand how adding a driver may affect the rate before making any changes to the policy.

Policy cancellation

Cancelling Auto Insurance

To cancel your auto insurance policy, you can either call your insurance company or agent, mail or fax a signed cancellation request, or ask your new insurance provider to assist with the cancellation. Some insurers may require a signed cancellation form or written notification. It is also important to note that some insurance companies may charge a cancellation fee, so be sure to check with your provider.

Reasons for Cancellation

There are several valid reasons for cancelling your auto insurance policy, including:

• Switching insurance companies
• Moving out of the country
• Selling your car
• Moving to another state
• Getting covered under someone else's policy

Policy renewal

It's important to renew your policy before the existing one expires to avoid a lapse in insurance coverage, which is illegal in most states. If you don't renew your policy, you could face penalties such as fines or license suspension. In addition, if you cause an accident that results in injuries or property damage, you will be personally responsible for covering the expenses.

Most insurers offer automatic renewal, so you won't need to take any action if you want to continue with your current insurer. However, if you want to switch insurers or decline to renew, you must contact your current insurer before the renewal date to let them know. You may need to submit a written letter of cancellation or cancel through email or phone, depending on the insurer's requirements.

If you cancel a policy that you paid for in advance, your insurer will usually send you a refund for the unused portion. However, be aware that some insurers may charge a cancellation fee or additional costs if you cancel your policy mid-term.

Even if your policy has expired, you may still be able to renew it or purchase a new policy. However, there may be a lapse in coverage between the date your previous policy expired and the date the new policy starts.

Frequently asked questions