Know Your Rights as an Insurance Policyholder

It is impossible to say definitively what an individual’s rights are as a car insurance policyholder because policy language varies so significantly. A policyholder’s rights are also influenced by the insurance laws of the state of residence. Generally speaking, all policyholders have the right to an expeditious and fair settlement of their claims as long as they honor the obligations of their contract, such as paying auto insurance premiums in full and on time. Read on for additional information on your auto insurance rights and how to protect them.

Finding Your Rights

The two most authoritative resources on your rights as an auto insurance policyholder are your policy itself and the insurance department of your state. In your original policy contract, your insurer will explain its rights and responsibilities as well as your own. You will see all of the clauses that apply to your car insurance coverage, such as a dispute clause or arbitration clause, to help you understand your options in various claims situations.

For legal information on what your auto insurer can and cannot do, try visiting the Website of your state’s insurance department. Most agencies have a page dedicated to auto insurance and/or policyholder rights. You will also find information on what you can do if your rights were violated by a car insurance company.

Universal Policyholder Rights

No matter what kind of policy you have or where you live, a few select rights almost always apply to car insurance customers. Here are the rights most commonly afforded to customers by an average auto insurance policy:

• The right to receive benefits. If you pay your premiums as agreed, you have the right to receive benefits from your car insurance policy in the event of a covered loss. Legitimate and truthful claims should be addressed according to the provisions set forth in the contract you signed with your insurer.
• The right to an efficient and cost-effective settlement of claims. Auto insurers are usually prohibited by law from drawing out the claim-settlement process unnecessarily. In fact, most policies stipulate a maximum number of days the insurer can take to come to a resolution regarding your car insurance claim. The insurer is also obligated to take care of your claim in an affordable manner.
• The right to dispute resolution. Almost all policies contain what is called an arbitration clause, which specifies what a policyholder can do if he/she cannot agree with the insurer on a fair settlement. Arbitration is an alternative to a lawsuit and is not heard in a court of law. An impartial party, known as an arbitrator, will hear your side and your insurer’s side and reach a decision.