Auto insurance quote to the consumer

ADJUSTER
A person licensed by the Department of Insurance
whose job is to evaluate the amount of loss and to
recommend the amount the insurance company will
pay.
AGENT
A person licensed by the Department of Insurance to
solicit and service insurance policies.
AT-FAULT
Negligent.
CLAIM
A request to an insurance company for payment of a
loss.
COVERAGE
The amount of risk covered by an insurer.
DEDUCTIBLE
The portion of each covered claim you are responsible
for paying.
ENDORSEMENT
An amendment to an insurance contract, creating a
change in the original terms.
EXCLUSION
A provision in an insurance contract that removes
coverage for certain losses or property.
EXPERIENCE PERIOD
The three years immediately preceding the date of
application or the preparation of renewal.
FAMILY MEMBER
A person related to you by blood, marriage or adoption
who is a resident of your household, including a ward
or foster child.

INSURED
The person or persons covered by the insurance
contract.
INSURER
The insurance company that is underwriting the
contract of insurance.
LIABILITY INSURANCE
Provides protection for the insured against loss arising
out of legal liability to third parties.
LIMITS
The maximum amount the insurance company will pay
in the event of a loss.
NEGLIGENCE
The failure to act as a reasonably prudent person would
have acted under similar circumstances.
OCCUPYING
Means in; upon; getting in, on, or off.
PREMIUM
The amount paid in consideration for an insurance
policy.
PREMIUM FINANCE COMPANY
A lending institution approved by the North Carolina
Department of Insurance, which finances insurance
premiums for a fee.

INEXPERIENCED OPERATORS
An inexperienced operator is a licensed driver who has less than three years driving experience. Adding
an inexperienced operator will cause a significant increase in your premium.
The following chart gives examples of some basic rates for inexperienced operators in the same area. The
chart includes no insurance points for drivers in the household. Also, this chart does not take into account
discounts and deviations individual insurance companies may apply to the final rate.
The coverages considered in the chart are:
• Property Damage and Bodily Injury Liability;

• Uninsured and Combined Uninsured /Underinsured Motorist Coverage with the same limits as the
Liability Coverage Limits and;
• Medical Payments Coverage with limits of $1,000.

It may be difficult for a high-risk driver to obtain Collision, Comprehensive and other coverages that are
not offered through the reinsurance facility. The most common method is through a company that writes
non-standard business.
Your company may ask you to sign a “consent to rate” form. This would mean that you agree to pay
rates higher than what has been filed with the North Carolina Department of Insurance in order for the
company to write the coverage.

REINSURANCE FACILITY
Since the financial responsibility laws require individuals to be covered for Bodily Injury Liability and
Property Damage Liability up to the minimum limits, insurance companies cannot refuse to write those
coverages. If they do not want to bear the risk, insurance companies will place high-risk drivers in the
reinsurance facility. The purpose of the facility is to assure the availability of motor vehicle liability
insurance to all eligible risks. The types of coverage offered are:
• Bodily Injury Liability from the minimum limits required to a maximum of $100,000 each person,
$300,000 each accident;
• Property Damage Liability from the minimum limits required to a maximum of $50,000 each accident;
• Medical Payments Coverage from $1,000 to a maximum of $2,000 each person; (This coverage is not
available for motorcycles.)
• Underinsured Motorist Coverage to a maximum $1,000,000 each person and each accident for Bodily
Injury Liability; and
• Uninsured Motorist Coverage from the minimum limits required of Bodily Injury Liability and Property
Damage Liability to a maximum of $1,000,000 each person and each accident for Bodily Injury
Liability, and $50,000 for property damage (with a $100 deductible).

EXAMPLES OF DISCOUNTS, DEVIATIONS AND CREDITS
You may want to ask your agent or company if you are eligible for any
discounts. Following are some examples of discounts being offered:
• You agree to an Electronic Funds Transfer.
• You are renewing your policy and did not have a loss or conviction
during the last policy period.
• You are considered a mature driver (normally age 55, but ages for
eligibility can vary by company).
INCREASE DEDUCTIBLES
Another way you can lower your premium is by increasing your
deductibles. You can choose the deductibles on your comprehensive and
collision coverages. In doing this you will want to consider how much of a
loss you can afford to absorb if you have a claim.
SHOP AROUND (COMPARISON SHOPPING)
Shop around, you may find substantial differences between quotes. Make
sure you are comparing identical coverages when comparing companies.
Make sure you are dealing with licensed agents and companies. You can
check this by contacting the North Carolina Department of Insurance at
1-855-408-1212.
CREDIT BASED INSURANCE SCORING
Most insurers use the information in your credit report to calculate
a credit based insurance score. They do this because studies show a
correlation between this score and the likelihood of filing a claim. Creditbased insurance scores are different from other credit scores.
PAYING YOUR PREMIUM
Pay your premium in full. Also, pay on or before the due date to avoid the
risk of cancellation. There is NO GRACE PERIOD for automobile insurance.
Use a check or money order. If you use cash, request a receipt, and keep it
in a safe place.
Pay your premiums even if you disagree with your insurance company.
Failure to make premium payments may cause cancellation of your policy.
Some consumers choose to finance their premium, often by using a
premium finance company. When dealing with a premium finance
company you should note the following.
• You are entering into a separate agreement with the finance company.
Your insurance company is not lending you the money.
• The finance charges and fees associated with the loan will increase
your total cost of insurance.

BEFORE YOU BUY A CAR
Before you buy your car ask about the cost of insurance. Some
makes and models are higher risks than others and could result in a
higher premium. With a few models, you may have trouble finding
companies willing to provide Other Than Collision (Comprehensive)
and Collision coverages.
DRIVING RECORD
Try to maintain a clean driving record. A key element in determining
your rates is your driving record. Remember that insurance points
will remain on your record for three years.
PARENTS OF TEENAGERS
If your child does not own a car, make sure the insurer knows
which car the teen will be driving and whether it will be primary or
occasional use. For additional information on teen drivers, please
refer to our Teen Drivers brochure found on our web site.
COVERAGES
If you have an older model vehicle and it is not financed, the benefit
from the purchase of Comprehensive and Collision coverages might
not be worth the cost.
READ YOUR POLICY
Read your policy and make sure it lists all vehicles owned by you,
along witih the coverages you have requested.
INSURANCE IDENTIFICATION CARDS
Make sure you have an insurance identification card. This will
provide the necessary insurance information required from you at
the time of an accident.

LIABILITY COVERAGE
(Required by N.C. law). Your Liability coverage will pay for bodily injury and property damage for which
any covered individual becomes legally responsible. The Personal Automobile Policy will cover you or
any family member while using any automobile or trailer, and any person using your covered automobile
with permission. The policy will pay up to the limits listed in your policy.
Under this coverage you will have separate limits of liability per person injured and limits of liability per
accident. This is called split limits. For example, you may have limits of 100/300/50. This would mean that
your policy would pay up to a maximum of $100,000 to any one person injured by a covered driver or
up to $300,000 for all injured parties combined, as a result of a single accident. Also, this coverage has a
single limit of liability for all property damage resulting from any one accident. Using the above example
of 100/300/50 limits, you will have a limit of $50,000 Property Damage Liability for each accident.
The liability section can be separated into three parts: Bodily Injury Liability, Property Damage Liability
and Supplementary Payments.

■ Bodily Injury Liability
This coverage will pay for damages to other people as a result of an accident caused by you or
another covered driver. Examples of damages include medical and funeral expenses, lost wages,
disability, rehabilitation, pain and suffering, law suit settlements and legal expenses.

■ Property Damage Liability
This coverage will pay for damages to other people’s property as a result of an accident that is
caused by you or another covered driver. Examples of damages include the repair or actual cash
value (ACV) of another individual’s automobile or other property and legal expenses.

Supplementary Payments

This coverage is in addition to your stated limits of liability. (Review your policy or contact your

agent to identify the limitations and exclusions for this coverage.) This section provides payment on

accident related expenses involving:

• Bail bonds;

• Premiums on appeal bonds and bonds to release attachments;

• Costs taxed against an insured and interest accruing after a judgment is entered;

• Loss of earnings because of attendance at hearings or trials at the insurance company’s request;

• Expenses for emergency first aid to others at an accident involving a covered auto; and

• Other reasonable expenses incurred at the insurance company’s request.

COVERAGE FOR DAMAGE TO YOUR AUTOMOBILE
This coverage is for direct and accidental loss to your covered automobile, or any non-owned
automobile that meets the following definition: any private passenger automobile or trailer not owned
by or furnished or available for the regular use of you or any family member while in the custody of
or being operated by you or any family member; any auto or trailer you do not own while being used
as a temporary substitute for your covered auto because of its breakdown, repair, servicing, loss or
destruction.

■ Collision
Collision means physical damage to your covered vehicle caused by an impact with another vehicle
or object. This coverage pays the lesser of the cost of repair or ACV of your automobile.

■ Other Than Collision (Comprehensive)
This coverage pays the cost of repair or ACV of your automobile less any deductible. Losses caused
by the following are considered comprehensive claims:
• Missiles or falling objects;
• Fire;
• Theft or larceny;
• Explosion or earthquake;
• Windstorm;
• Hail, water or flood;

• Malicious mischief or vandalism;
• Riot or civil commotion;
• Contact with a bird or animal; or
• Breakage of glass

MEDICAL PAYMENTS COVERAGE
This coverage pays for reasonable and necessary medical and funeral expenses due to an automobile
accident. Individuals covered under this coverage include:
• You or any family member while occupying any automobile, or as a pedestrian when struck by a motor
vehicle; or

• Any other person while occupying your covered automobile or any vehicle (private passenger
automobile or trailer licensed for road use) driven by you or a family member.

• The policy will pay up to the limits listed in your policy for each individual injured.

• The Medical Payments coverage will not provide coverage for any expenses if the injuries occur while
occupying a motorized vehicle with less than four wheels

UNINSURED/UNDERINSURED MOTORISTS (UM/UIM) COVERAGE
Uninsured Motorists (UM) Coverage will provide protection when an uninsured driver, who is at-fault,
injures you or another covered individual. It also provides property damage coverage.
Underinsured Motorists (UIM) Coverage will provide protection when an underinsured driver, who is atfault, causes injury to a covered individual. An underinsured driver is one whose limits of liability are less
than your UIM limits, and not enough to cover the losses of the people the underinsured driver injures in
an at-fault accident.
UIM coverage does not provide protection against property damage. The UIM coverage will pay a
maximum of the difference between the other driver’s Liability limits and your UIM limits.
Caution: The insurance company will not provide coverage if you or your legal representative settles the
bodily injury or property damage without the company’s written consent.

These coverages may be purchased in addition to your basic
automobile coverages. You will be charged an additional premium
for electing the following coverages. (Review your policy or contact
your agent to identify any applicable limitations and exclusions.)

■ Automobile Death Indemnity, Specific Disability and
Total Disability Benefits Coverage
This endorsement will provide a benefit for death,
dismemberment, specific disability and total disability
resulting from an automobile accident.

■ Miscellaneous Type Vehicle Endorsement
Motorcycles, golf carts, travel trailers and other similar type
vehicles are afforded coverage by this endorsement. If your
covered vehicle is a motorcycle, the endorsement will extend
the medical payments coverage to motor vehicles with fewer
than four wheels.
■ Coverage for Rented Vehicles
This endorsement provides coverage for you or a family
member who rents a rental vehicle on a daily basis for less than
22 consecutive days.

■ Coverage for Damage to Your Auto (Customizing Equipment
Coverage; Coverage for Audio, Visual, and Data Electronic
Equipment)
Through this endorsement, the limits of liability are increased
for custom furnishings and custom equipment, and for
additional permanently installed electronic accessories.

■ Towing and Labor Costs Coverage
This coverage pays for towing and labor costs each time your
covered automobile or any non-owned automobile is disabled
or the keys are lost, broken or accidentally locked in the car.

■ Extended Transportation Expenses Coverage
(Rental Reimbursement)
This coverage will pay, up to a specified rate and maximum
total amount, transportation expenses incurred by you or
loss of use expenses for a non-owned vehicle for which you
become legally responsible.

Underwriting is the process by which an insurance company considers your application and evaluates your driving
record and other factors to see if you meet its guidelines. Insurance companies use a variety of factors to determine
the level of risk each applicant presents. Each company will use its own underwriting guidelines to decide whether or
not to insure a driver voluntarily. Some of the most common factors are: your driving record, where you live, type of
automobile and use of automobile.
WHERE
YOU LIVE
The area you live in will also affect your rate. Insurers will consider vehicle and
population density, road conditions, repair rates, hospital and medical costs, and
the number of accidents and other claims in a particular area. Normally, urban
areas have higher rates than rural areas.
The likelihood of theft, cost of repair and replacement, and the style of vehicle
(sports car, SUV, station wagon, etc.) will influence your premium. For example, a
sports car will normally have a higher premium than a family sedan.
TYPE OF
AUTOMOBILE
The more you use your vehicle the more you may pay in premium. A vehicle you
drive 20 miles to work everyday is considered a greater risk than a vehicle only
used occasionally

SPECIAL EXEMPTIONS – NO SDIP POINTS WILL BE CHARGED FOR:
An accident provided all of the following are true:
• There is property damage only;
• The amount of damage is $1,850 or less (prior to October 1, 2017) or $2,300 or less (after October 1, 2017)
• There is no conviction for a moving violation in connection with the accident; and
• No licensed operators in the household have convictions or at-fault accidents during the experience period. (An
insurance company may require the insured be covered by that company for six continuous months).
Speeding 10 mph or less over the posted speed limit; provided all of the following are true:

• The violation did not occur in a school zone; and

• There is not another moving traffic violation for the experience period. An isolated Prayer for Judgement Continued
(PJC) will not count as a prior conviction for the purpose of this exception.
One PJC for each household every three years; however:
• A second PJC may cause points to be charged according to the underlying convictions.
You will no longer meet the requirements for a special exemption if you or any member of the household receive a
conviction or a second at-fault accident.

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Auto insurance quote to the consumer

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