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carmen78sc carmen78sc is offline
Registered User
Join Date: Jul 2004
Location: Seattle
Posts: 181
Coming from the insurance business, some of what you have been told may not be 100% correct. I will throw a few things out, and I hope I don't confuse matters further.

First, a clarification of underwriting versus the insuring agreement (policy contract). Underwriting is the process of evaluating you as a risk and applying the correct rates if the insurer decides to insure you. Insurers do this based on information you provide as well as information they collect from 3rd party sources (your credit record, motor vehicle reports, etc.). In most states, when an insurer agrees to insure you, they have a short period of time (usually 60 days into the policy) where they can cancel you for any non-prohibited reason (think race, color, creed, etc. as prohibited reasons). After that, they can only cancel your coverage (during your policy period) because of a material change in your risk profile, not because their EVALUATION of your risk profile has changed (an important distinction). Of course, insurers are free to nonrenew your policy when it expires for a whole host of reasons. The bottom line is that once an insurer agrees to insure you, it's very, very difficult for them to deny a claim based on underwriting reasons.

The second component is the insuring agreement (policy contract). Any limitations on coverage MUST be written into the contract. If an insurer wishes to exclude coverage for driving to/from work, it must say so in the contract. The fact that they use that characteristic in developing rates and as an underwriting screen will not make it a basis for denial of a claim. What happens when this type of situation arises is the claim is paid and the policy is nonrenewed by the insurer at the date of expiration.

Finally, a comment about claims handling. Claims is always a negotiation process. Again, unless it's written into your insurance policy/contract, a company cannot stipulate that they keep your car in the event of a total loss. In fact, insurers would rather not take your car as they are not in the salvage business. You'd be surprised at how much they have to pay for towing, storage, and salvage fees. So, when faced with the total loss situation, negotiating to keep your car won't be difficult, and you can contest any settlement offers you don't like. It's even easier with an "agreed value" policy because you're not negotiating at the time of loss what your car's worth. You'll only have to negotiate a far salvage value (what a wrecking yard will pay the insurer for your totalled car). And, you're freeing the insurer of extra towing & storage fees.

Sorry for the long post, but I wanted to offer an "insiders" perspective. As to what I have? I have an antique car endorsement with agreed value on my standard auto policy with Safeco. The statement of coverage for my 911sc reads:

"Coverage applies provided such auto is maintained solely for use in exhibitions, club activities, parades or other functions of public interest, and is only used infrequently for other purposes."

"Infrequently" is highly subjective, but it just means that you won't have TWO claims driving to/from work because after the first, you'll be re-rated as a regular use car or nonrenewed at your next renewal.

1978 911sc Targa (Sold )
2005 BMW X5 3.0i
2000 BMW 528iT (5 spd, sport)
2000 BMW 323Ci conv. (4 sale)
1987 Corvette Callaway Twin-Turbo Conv
Old 10-13-2005, 03:23 PM
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