To be able to drive each state requires that you carry liability insurance on your vehicle, but what if you don’t own a vehicle?

In insurance, each state has their own set of rules and regulations that insurance companies and drivers have to abide by. One rule that is the same in every state is that you have to carry at least liability insurance on your vehicle in order to be able to drive.

Not everyone that has a driver’s license owns a vehicle though and these drivers are handled differently state by state.

Specifically, in the state of Ohio you have to have insurance to drive, whether you own a vehicle or not. In addition, it is illegal to allow anyone that does not have insurance or is not listed on your insurance policy to operate your vehicle (Ohio Financial Responsibility Law).

If you are concerned about insurance coverage for a driver that does not own their own vehicle, contact a local insurance agent in your state.

Premium that you have overpaid to an insurance company is not theirs and should be returned immediately.

When you pay for your insurance, the insurance company generally makes you pay for the coverage in advance. It doesn’t matter what payment plan you are on, they want to make sure that they get their money before they provide you with insurance coverage. This is to make sure that if you have a claim and cancel your policy that you have already paid for your coverage for the day of the accident.

On the consumer side, when you cancel your insurance policy and you have paid premium for coverage that you have not used yet; you are owed a refund immediately. There is no specific timeframe that an insurance premium has to be returned, but insurance companies are expected to process refunds in a “reasonable amount of time”.

If you have not received your refund, contact the insurance company to find out why you don’t have it yet. Second, if they claim that you are not owed a refund demand (nicely) to be sent a billing breakdown showing how much your pro-rated premium was each day and how many days you paid for.

If the breakdown shows that you are owed a refund and the insurance company still won’t pay, file a complaint with your state Insurance Commissioner. In the state of Washington the Insurance Commissioner has fined insurance companies and agents for not refunding unearned insurance premiums to former customers within a reasonable amount of time.

Any damage that an insurance company pays out for you is considered a claim, but each type of claim can affect your policy differently.

Everyone that drives knows that you can lose your insurance coverage with a company if you have too many accidents or driving violations. Insurance companies are in business to turn a profit and if they are paying out one claim after another for you, they are losing money.

But what about claims that aren’t your fault, like broken windshields?

Glass claims are generally not counted by insurance companies as claims that stack up to a policy cancellation or non-renewal. But, like all things in the insurance industry it completely depends on your insurance company. Best thing to do is to contact your agent or insurance company and ask what their policy is in regards to this.

In the state of Massachusetts, an insurance company cannot cancel your policy in the middle of a term for too many claims. If they decide to not renew your policy they have to give you 45 days notice before they stop your coverage. In the case that you feel this is an unjust non-renewal, contact your own state’s Department of Insurance or Insurance Commissioner’s office.

Covered perils (not covered pearls) are what you hope your car accident falls under when you file a claim.

Covered pearls make you pretty; covered perils help you when life isn't pretty.

Covered Perils. Sounds a little like a band name or even a type of jewelry.

If you don’t work in the insurance field, you most likely would be guessing things just like that if you were ever asked what the words “covered perils” meant. Covered perils are actually a much more serious topic than any band name or jewelry. If you are filing a claim with your insurance company it is something that you are hoping that your claim will be qualified as.

What Are Insurance Perils?

To understand the word “covered perils”, it is first important to understand what the word “perils” mean. Per the Merriam-Webster dictionary the definition of perils are “1. Serious and immediate danger” and “2. The dangers or difficulties that arise from a particular situation or activity”.

Your insurance policy is not going to be much help if you are in “serious and immediate danger” so definition number two is what applies in this case.

Perils in the world of insurance are situations or activities that cause difficulties in your life. For example, having your vehicle hit by another car, your car catching on fire or you running into a telephone pole are all perils. All of these situations are going to make your life difficult.

What is A Covered Peril

Now that we know what a peril is, let’s talk about a covered peril. Covered perils are the situations that are going to cause difficulty in your life that are covered by your insurance policy.

These covered perils are listed in the large legal documentation that you first received with your insurance policy. The legal documentation is different from company to company, but the general list of what situations your insurance will cover varies little between companies.

Insurance companies don’t send the legal documentation out at each renewal like they do with the declarations page. This is why it is important to keep the document when you first get it.

If you no longer have the legal documentation, contact your insurance company or your agent to get a copy.

What is Not a Covered Peril

Perils that are not covered by your insurance are the situations where the insurance company will deny your claim if your damages were caused by certain situations. Usually these situations are illegal acts or situations that happen frequently in your area.  The insurance company can decide not to offer coverage for certain situations to protect themselves financially.

A situation such as intentional damage done to your vehicle for financial gain is not a covered peril. Also a situation where you have intentionally damaged another person’s property with your vehicle is also not a covered peril.

A full list of perils that are not covered can be found in the legal documentation for your insurance policy. Having this list around in the case of a claim is very important to protect yourself if the claims adjuster denies your claim for not being a covered peril.

What indemnification is, how it works and how to recognize exclusions and policy language that may lessen its impact.

Indemnification is how this loss can be compensated.

Like any other professional field, insurance is full of terms that may be unfamiliar to the outsider. One of these is “indemnification.”

Aside from being a mouthful, what is indemnification? Well, it’s a very important insurance concept which deserves a closer look.

What is Indemnification?

Indemnification is a central concept of insurance in general, not just auto insurance. It’s a term that comes up in every form of insurance, be it homeowner’s, renter’s, life, commercial liability or what have you. Indemnification is, in the recent words of a major carrier, the means insurance companies use to “get you back to where you belong.”

The concept is simple: by definition insurance should replace or otherwise pay for exactly what you lost. There should neither be profit nor loss in an insurance claim. That’s the theory, anyway.

How Indemnification Works

Say you’re in an auto accident and the other driver is found at fault. For the sake of simplicity (and because we like you) we’ll say that you weren’t injured, but your car was totaled. We’ll also assume the other driver had adequate liability coverage on his vehicle.

Depending on the policy and your preference you may be able to do one of two things: get a new car comparable to the one you had, or take a cash payment equal to the value of your car at the time of loss. Either way, the insurance company indemnifies you for your loss.

In another example, assume you have full coverage on your vehicle and you accidentally hit a tree. The car isn’t totaled, but there is $3,000 worth of body work needed. After your pay your $500 deductible, the insurance company picks up the remaining $2,500. While the deductible isn’t covered per the terms of your insurance contract, the rest is. That $2,500 claim payment is indemnification for your loss. You would profit from any further payment, but lose out from any less.

Indemnification isn’t automatic. Your claim must go through the proper channels and be investigated by a claims adjuster, who determines the amount of loss and what the insurance company is responsible for. If you disagree with the amount, you can hire a third party adjuster to take another look, or in extreme cases take the insurance company to arbitration or court.

Pitfalls of Indemnification

One should bear in mind indemnification does not take into account exclusions such as depreciation. It is very important to know if an item is covered for “replacement cost” or “actual cash value.” If the latter, you’ll only be covered for what the item was worth at the time of loss, which may or may not be enough to replace it.

Aftermarket accessories on separate auto inland marine policies are often covered at actual cash value, for example. Many commercial policies also make wide use of actual cash value clauses in their contracts. Ask your agent to be sure.