What Happens If Motorists Receive A Surcharge Notice From Vehicle Insurers?
If you get caught for a moving violation or need to file an automobile insurance claim for an accident, your auto insurance firm might increase the premium by putting a surcharge on your policy. Consumers should consider their options to avoid rate hikes.
Surcharges are equivalent to putting your auto insurance rates in a category of high risk drivers and higher premiums. The surcharges could stay on your policy for up to five years. Dependent on the state, insurance corporation and reason for the surcharge, an additional charge can run anywhere from fifteen to twenty percent.
Each automobile insurance corporation employs a different mathematical formula that converts the scale of your accident or traffic ticket into an amount. The next step often is that a driver receives a «surcharge notice» from the carrier explaining that the rates will go up. This doesn’t invariably mean you are going to have higher premiums.
The good news is drivers can appeal surcharges. However most people not realize they are able to appeal a surcharge according to a state study. Not appealing an extra fee can cost drivers a ton of money, however appealing is not cheap, and the incorporated costs frequently turn people off. That is a serious error because it can pay to look into what you might possibly save if your appeal is successful.
Avoiding the surcharge after successful appeal could save thousands of dollars in the next three to five years. You have to compare the premium expense over the life of the policy to the expense of the appeal fees. Most of the time for minor violations it is cost effective to appeal the surcharge.
The first step in fighting an additional charge is contacting your broker to determine if he will plead your case. For example, if the accident was not your fault the broker should be able to explain to the underwriters why you shouldn’t have a surcharge or rate hike.
Policy holders who believe they have been treated inequitably or who have a strong reason to disagree with the outcome should appeal. These could be that they did not merit a speeding ticket or the accident was not their fault. They should try to reason with the underwriters first though.
In the meantime, they should see if there will be another vehicle insurer who will offer an acceptable quote despite the recent changes in particulars. It is possible that current firm is an expensive one and still trying to increase their profits. A more competitive provider may come up with a better deal. Just get a few quotes and see instead of speculating about it.
If your agent cannot successfully remove the surcharge or find a lower quote somewhere else, the following step is an official appeal. Imprinted on the back of an additional fee notice is a form you can fill out and mail to your state insurance office inside thirty days of notification.
Most companies reduce premiums when they find out the customer is appealing. Most states charge around one hundred dollars to appeal. Once your request is received by your State’s insurance appeals board, your case will be planned for a hearing.
You can receive a notice about two to four weeks beforehand to tell you the date, time and place of the hearing. The appeals process could take a very long time and in some cases it could take months before you have a hearing date. After the hearing, the board has thirty days to send you a letter letting you know their decision. If you win your appeal, send a copy of the letter to your agent for removal of the surcharge.
You may need to request for credit from the surcharge you have been paying during the time you have been waiting for your appeal. If the state board rules against you or you do not agree with the ruling, you can continue the appeals process by filing an appeal with a higher court.
Even after going through two appeals processes if you win, you may have spent near fifteen hundred dollars. If the surcharge is on your policy for the next five years additional premiums could add up to over five thousand dollars. It can make sense to fight your surcharge through the appeal process.