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A consumer’s guide to:AutoinsuranceChoosing and using your auto insurance coverage
Dear auto insurance consumer:Auto insurance is one of the most personal kinds of coverage we purchase. Yetmy office receives more complaints about auto insurance than any other type ofcoverage.While we are able to solve many of those problems, complaints too often involvediscrepancies between what consumers thought they were buying and the actualcoverage they receive. This guide will help you understand how auto insuranceworks and what coverage is right for you.The Office of the Insurance Commissioner (OIC) publishes additional insuranceinformation to educate and assist consumers at: www.insurance.wa.gov.Also, if you need help with an insurance problem, or want to file a complaint, callour Insurance Consumer Hotline toll free at 1-800-562-6900.We’re here to help you.Sincerely,Mike KreidlerWashington State Insurance CommissionerWashington State Office of the Insurance Commissioner
1Understanding your autoinsurance policyYour insurance policy is a contract between you and your insurance company. It spells out exactlywhat the company agrees to do in exchange for the premium that you pay. This contract isdivided into two sections: a declarations page and the policy itself.The declarations pageThis section of the policy includes basic details ofthe agreement. It is important that you review thispage to make sure all the information is correct andall the coverages you requested are included. Thedeclarations page includes: Name of the insurance company Name(s) of the policyholder(s) Policy numberThe policyThe second part of your insurance contract is thepolicy itself. This includes: Insuring agreement Definitions When and where coverage applies Conditions if the vehicle is financed General conditions Policy period Description of the vehicle(s) insured Coverages purchased Mutual conditions Exceptions and endorsements of the policy Limits of liability and deductiblespurchased Premium charge for each coverage List of forms that are a part of the policyMake sure you review your declarations page to verify that your policyincludes the types and amounts of coverage you requested.Washington State Office of the Insurance Commissioner
2Types of coverageThere are many different types of coverages available to meet your auto insurance needs. Someare required and some are optional. Here are brief descriptions of the available coverages:LiabilityEmergency road serviceWashington state requires liability coverage. Thiscovers bodily injury and damage to property thatyou cause to others while using your car.This covers towing when your car breaks down.Car rental expenseIf you have a claim that is covered under your autopolicy, this coverage pays to rent a car. Be sure toThis covers a limited amount of medical and hospital check your policy for any limitations.costs, income continuation, funeral expenses, andDeath, dismemberment and lossloss of services. Coverage limits are defined in thepolicy.of sightPersonal injury protectionMedical paymentsThis covers medical and funeral expenses (not allcompanies offer this coverage).This pays for death and certain injuries to peoplenamed in your policy due to an auto accident.GAP coverageUninsured/underinsured motorist bodily In the event your vehicle is a total loss, this pays thedifference between the current market value of yourinjuryauto and the amount you still owe the lender. ThisThis covers injuries an uninsured or underinsureddriver causes to an insured person.coverage is generally only available for new cars.Uninsured/underinsured motoristproperty damageThis covers direct and accidental loss to customfurnishings or equipment.This covers property damage an uninsured orunderinsured driver causes to your insured vehicle.Collision coverageThis covers damage to your car that is caused bya collision.Comprehensive coverage (other thancollision)Custom equipment coverageMany companies also offer other endorsements(additional coverage). Ask your insurance agent orbroker about: Trailer/camper body coverage Snowmobile coverage Limited Mexico coverage Joint ownership coverageThis covers damage to your car -- except by collision. Auto loan/lease coverageFor example, this covers your car if a tree falls on itor someone vandalizes it.Remember to check your declarations page toverify the coverage you purchased.Washington State Office of the Insurance Commissioner
3Shopping for automobile insuranceMany insurers offer auto insurance in Washington state. Under state law, insurers mayconsider your age, driving record, where you live, credit history, and other factors to decideif they will offer you coverage. Not every insurer will offer you coverage or charge you thesame premium for the same coverage.If an agent or broker is unable to find coveragefor you, it doesn’t mean that there isn’t an insurerwilling to cover you. No single agent or broker willhave access to all auto insurers doing business inWashington state.There are three segments of the auto insurancemarket you should know about:Preferred market -- This market features thelowest premiums and it is available to lowrisk drivers with exceptional driving records.Standard market -- This market refersto the average driver who uses family-typecars and has a reasonably gooddriving record.Non-standard market -- This marketincludes young drivers with less experience,drivers with multiple tickets or accidents,and drivers with reckless or drunk drivinghistories.Most insurers offer coverage that falls intothe standard or the preferred markets. A fewcorporations have several companies within theirgroup and establish tiers that range from thepreferred market to the non-standard market.We cannot recommend or suggest specificcompanies, but we can offer tips to help you shopfor auto insurance. Regardless of how you shop orwhose services you choose, it is important to doyour homework in advance. You should: Know what types and limits of coverageyou need. Ensure you’re dealing with an authorizedcompany and a licensed agent or broker. Make sure you have the make, model andother details of the vehicle you wishto insure. Answer any questions about your drivingrecord and accident history fully andaccurately. Shop for customer service and price.Agents and brokers selling insurance in Washingtonmust be licensed with our agency. We regulatenearly 85,000 licensees. Some are employedexclusively by a specific insurer, while others workindependently. You can find agents and brokers: In the Yellow Pages of your local phone book Through referrals from friends and family On the InternetTo find out if an agent, broker or company is licensedin our state, go to: www.insurance.wa.gov.Insurance can be a sophisticated product. Youneed to do your homework and shop the market,regardless of whether you buy in the traditionalmanner or online.Washington State Office of the Insurance Commissioner
4What to do if you can’t find autocoverageSome drivers have a hard time obtaining insurance. This can result from a number of factors,including a poor driving record, type of vehicle, claims history, experience, etc.There are insurance companies that write nonstandard policies in this state.They include: Allstate Dairyland Farmers Financial Indemnity Guaranty National Infinity Leader Nationwide Progressive Safeco Viking Insurance Company of WisconsinIf your driving record prevents you from obtaininga policy in the non-standard market, your agentor broker will contact the Automobile InsurancePlan on your behalf. More than 55 years ago, theWashington State Legislature created this plan toprovide auto insurance coverage to high-risk driverswho are unable to find coverage. To qualify for thisspecial coverage, you must: Be a Washington state resident or a memberof the U.S. military Hold a valid Washington state driver’slicense Not have any debt from previous autoinsurance coverageThe cost of auto insuranceAuto insurance cost is a major concern to Washington’s drivers. Insurance companies must submit theirrate requests to our agency for review. These requests must include enough financial information (actuarialbased) to verify the need for the requested rate. If we are satisfied with the rate information, we mustapprove the request.Insurance companies can rate all licensed driversin the household -- the policyholder and his or herspouse, and other household members, whetheror not they are related by blood. This includesroommates. As a result, insurers generally base theirpremiums on all household members.such as your age, sex, marital status, driving pattern,claims history, location, credit history, and the make,model and year of your vehicle. When you shop forauto insurance, remember that each company usesthese factors differently.Insurance companies base auto rates on a varietyof factors. The premium you pay consists of a “baserate.” The base rate is adjusted based on factorsWashington State Office of the Insurance Commissioner
5AgeStatistics show drivers under the age of 25 havemore accidents than adults between age 25 and65. As a result, insurers charge young drivers andfamilies with young drivers in the household higherrates. Statistics also show that senior citizens aremore likely to be involved in an accident.premiums for comprehensive coverage. The law alsoallows companies to base your rates on your address(where you keep your car), even though you maydrive to a more urban or rural area.Driving patternsThe number of miles you drive per year can increaseyour rates. For example, if you drive a total of 7,000miles in a year, you will normally pay lower ratesGenderthan if you drive 15,000 miles in a year. InsuranceYoung men under the age of 25 are involved in more companies consider the distance you commuteaccidents per miles driven than any other population to work as additional miles you add to your nongroup. Washington state law allows insurancecommuting, “pleasure” miles.companies to charge based on gender and age whenstatistics indicate a greater risk.Driving record and claims historyStatistically, married couples have fewer accidentsthan singles and generally pay lower rates.Most companies apply a surcharge to driversinvolved in an accident or convicted of multipletraffic violations. Likewise, the more claims you file,the more likely your rates will increase.Vehicle typeCredit historyMarital statusGenerally, the more expensive your vehicle, themore you will pay for comprehensive and collisioncoverage. Also, because sports cars and highperformance cars are involved in more accidents,cost more to repair, and are stolen more often, theycost more to insure.LocationA higher number of accidents in a highly populatedarea will raise both liability and collision premiums.Higher crime rates in urban areas can also raiseUnder federal law (Fair Credit Reporting Act),insurance companies can use credit history as onefactor that impacts your auto rate. They may assignyou an insurance score based on your credit history.They use your score as one factor to decide whetherto accept or decline your coverage, or how much tocharge you. A Washington state law limits the useof certain information in credit scoring. For moreinformation, check out our website atwww.insurance.wa.gov.Companies differ in the skill, care and speed with which they settle customers’claims. The OIC cannot recommend one company or policy over another.Washington State Office of the Insurance Commissioner
6How to reduce your ratesHere are several options for saving money on auto insurance while making sure that you have adequatecoverage:Shop aroundEach insurance company has unique financialgoals and costs. As a result, it isn’t uncommonto find rate differences between companiesfor the exact same coverage. The cheapestinsurance may not provide you with thedegree of coverage you need. It is a good ideato discuss your coverage with your agent orinsurance company.Select the right carThe type of auto you own has a direct influenceon your insurance costs. Before you buy anauto, check with your agent or broker to findout how much it will cost to insure.Select higher deductiblesThe amount of the deductible you select willaffect your auto rate. For example, you maysave money by increasing your collision andcomprehensive deductibles from 100 to 500.To help keep your premiums down, you maywant to think about paying for smaller claimsyourself and using your insurance to only payfor larger claims.Special discountsInsurance companies are required by statelaw to give discounts to seniors, age 55 andolder, who complete safe driving courses. Fora list of courses, visit the Washington StateDepartment of Licensing at: www.dol.wa.gov.Eliminate duplicationYour coverage may overlap in some areas, suchas medical, collision, and uninsured motoristproperty damage. Ask your agent or broker toexplain your coverage and advise you if you areduplicating coverage.Buying collision/comprehensivecoverageIf you don’t think you could afford to fixyour car yourself if it was involved in anaccident, you may want to carry collision andcomprehensive coverage. These coveragesprotect owners of expensive and late-modelautos against the cost of repairs. Thoughcoverage may increase your rates, you maywant to think about it if the difference in whatyou pay would exceed your ability to pay therepair bills. Your lender may require thesecoverages until you’ve paid off your car.Ask each agent or company if they offer specialdiscounts. They often offer discounts to youngdrivers who are good students or who havecompleted a driver’s education course. Manycompanies will give you a discount on yourauto premiums if you also insure your housethrough the same company.Washington State Office of the Insurance Commissioner
7Additional informationCoverage for home health care workersIf you are a health care worker and you use yourown auto to occasionally take clients to theirappointments, it may impact your coverage.Insurance policies vary from company to company.Always check the coverage and exclusions in yourinsurance policy. If you still are unsure about whatuses your policy covers, contact your agent orinsurance company. For more information on homehealth care workers, visit our website at:www.insurance.wa.gov.Auto service contractsAuto service contracts extend and expand your car’soriginal warranty. In Washington state, the companyissuing the service contract must be registeredwith the Office of Insurance Commissioner.Service contracts must be backed by an authorizedinsurance company. The warranty contract mustclearly identify the insurance company and thecompany that’s promising to repair your vehicle(vehicle service contract provider) and how tocontact them. You have a right to deal with theinsurance company directly. Use all means possible to warn oncomingtraffic of the danger at the scene. Give reasonable aid to the injured. Do notmove them unless it is absolutely necessary. Notify the Washington State Patrol (WSP),city police or county sheriff, and if needed,request a doctor or aid unit and ambulance. Obtain and give necessary information forthe accident report, including names ofwitnesses and police officers. If there is any injury or death, or if propertydamage exceeds 700 to any one person’sproperty, you must notify the WSP, citypolice or county sheriff. If you fail tocomplete a written report, when required, itmay result in the suspension of your driver’slicense or instruction permit.It is equally important that you promptly report theincident to your insurance company. Also, you maybe subject to other reporting requirements specifiedin your insurance policy. It is vital that you read yourpolicy and know what you must do to file a claim.What you should do after an accidentEvery driver involved in an accident is legallyrequired to remain at the scene. He or she mustalso offer aid and give necessary information toothers involved and to law enforcement officers. Ifyou’re involved in an accident:More information and publicationsFor more information about auto insurance, check out our auto section on the Web at:www.insurance.wa.gov.Washington State Office of the Insurance Commissioner
8Need more help?Call our Insurance Consumer Hotline!1-800-562-6900Our professional consumer advocates enforce insurance law and can investigate complaintsagainst insurance companies and agents on your behalf.We also offer individual counseling and group education on health care issues in yourcommunities. Our highly trained Statewide Health Insurance Benefits Advisors (SHIBA)volunteers can help you understand your rights and options about Medicare, health carecoverage, prescription drugs, government programs, and more.Visit us at:www.insurance.wa.gov2057-OIC-Guide-Auto Insurance-rev. 01/16Washington State Office of the Insurance Commissioner
Auto insurance cost is a major concern to Washington’s drivers. Insurance companies must submit their rate requests to our agency for review. These requests must include enough financial information (actuari
