THE INSTANT INSURANCE GUIDE: AUTO

THE INSTANT

INSURANCE GUIDE:

AUTO

TRINIDAD NAVARRO

Insurance Commissioner

DELAWARE DEPARTMENT OF INSURANCE

302-674-7300  insurance.delaware.gov

This guide is intended to help you understand the basics of auto insurance

so that you can make informed decisions when purchasing insurance for

cars, trucks and motorcycles. We’ve covered the essentials but, of course,

there’s more to know than can t in these pages.

Due to Delaware Insurance Commissioner Trinidad Navarro’s efforts,

automobile insurance reform legislation has gone into effect as of May

1, 2018. House Substitute 1 for House Bill 80 restricts the factors automobile

insurance carriers may use in underwriting consumers’ policies. Under

this law, companies may still use credit scores to determine rates for initial

policies, but they may not use credit scores for policy renewals unless the

consumer requests the use of their credit score. Companies may also not use

credit scores that take into consideration a consumer’s age, race, gender,

religion, nationality, marital status, zip code, or lack of credit history to set

premiums. This act further prohibits automobile insurance companies from

increasing rates on current customers solely for having reached the age

of 75 or above or for having a change in marital status due to the death

of a spouse. If you’re looking for more detailed information about auto

insurance please visit our website, insurance.delaware.gov.

There are numerous options when it comes to purchasing auto insurance.

Some policies only cover you for the required state minimum levels

of coverage. Other policies provide everything from comprehensive

coverage to reimbursement for a rental car if your car is being repaired

after an accident—but those extra perks don’t come for free. The goal is

to nd a policy that balances the coverage you desire with a price you

can afford.

Please feel free to call the Delaware Department of Insurance at

302-674-7300 with any questions, issues or problems you have regarding

auto insurance in Delaware.

A Message From

The Delaware Department

of Insurance

insurance.delaware.gov

302-674-7300

Table of Contents

Auto Insurance ...................................................................Page 4

Minimum Required Coverage ..........................................Page 5

Optional Coverage ........................................................Page 6, 7

Rates ....................................................................................Page 8

Ways to Save .......................................................................Page 9

Repairs ...............................................................................Page 10

If You’re In An Accident ................................................... Page 11

Motorcycles ......................................................................Page 12

“Other” Motorized Vehicles ...................................... Page 13, 14

Electronic Proof of Coverage ..........................................Page 15

Dept. of Insurance Contact Information ... (Back cover) Page 16

Disclaimer: The Delaware Department of Insurance makes every

attempt to provide accurate and up-to-date information. If you need

further clarification with any auto insurance questions we suggest you

call your insurance provider or our office. This guide is not a substitute for

legal or professional advice. Information may change without notice..

Auto Insurance

What is auto insurance and why is it necessary?

Automobile insurance is a contract between you and an insurance

company that protects you nancially if you are involved in an accident.

If you cause an accident your insurance will help pay for losses you

caused. Your losses could be substantial if you are required to pay not

only for the damage to property but also for pain and suffering of any

injured person. If you don’t have any, or enough insurance coverage,

anything of value that you own could be taken to help pay those costs,

including: your home, any savings, and even future earnings.

Auto insurance policies are offered with a variety of coverages

available depending upon your needs and wants. You agree to

pay the premium, and in return, the insurance company agrees to

pay for certain expenses as dened in your policy. Having the right

insurance coverage may prevent you from suffering a large nancial

loss in the event of an accident. A minimum level of insurance

coverage is required by the state in order to register your car

in Delaware.

What is the penalty for driving without insurance in Delaware?

When a law enforcement ofcer stops you for any reason, you will

be required to show valid proof of insurance on the vehicle. If you

are driving a vehicle while not having the proper insurance, upon

conviction you will be ned not less than $1500 for the rst offense and

$3000 for each subsequent offense occurring within 3 years of a former

offense. Driving license and/or privileges will also be suspended for 6

months.

What’s a deductible? What’s a premium?

Deductible: A deductible is the amount you have to pay out-of-pocket

on a claim before the policy pays the loss. Higher policy deductibles

mean lower policy premiums. A policy with a $1,000 deductible has a

lower premium than the same policy with a $500 deductible. But be

sure you can afford the deductible in case you have a loss.

Premium: The amount that you must pay for an insurance policy. Your

premium is usually paid monthly, semi-annually or yearly.

Minimum Required Coverage

In Delaware, all drivers are required to carry three types of auto

insurance:

1. Bodily Injury Protection - $25,000/$50,000

If you are responsible for the injury or death of another person and

have minimum coverage, your insurance company will pay:

• Up to $25,000 to one person involved in a single accident

• Up to $50,000 to all people involved in a single accident, with no

more than $25,000 to any one person

2. Property Damage - $10,000

If you are responsible for damages to another person’s property and

have minimum coverage, your insurance company will pay:

• Up to $10,000 due to destruction of property of others as a result

of any one accident

3. Personal Injury Protection (PIP) - $15,000/$30,000

Whether you are responsible for the accident or not, your insurance

company will pay for the medical expenses and loss of wages for you

and your passengers. If you have minimum coverage, your company

will pay:

• Up to $15,000 to any one person involved in a single accident

• Up to $30,000 to all people involved in a single accident, with no

more than $15,000 to any one person

Also included in PIP coverage is up to $5,000 for funeral expenses.

The minimum amounts in these three categories are relatively low and

you may wish to purchase additional coverage to protect yourself from

possible claims in higher amounts. Keep in mind, however, that as you

raise your coverage, your premiums will increase.

Don’t Drive Uninsured: Driving an uninsured vehicle is against the law

and cost other drivers money in higher insurance premiums. Registered

vehicles are randomly checked for coverage and insurance companies

will notify the state if coverage is dropped. Driving without insurance

can cost you a ne, your license plate or your drivers license.

These types of coverage are not required by law in Delaware. However,

if you take out an auto loan, your bank or lender will likely require

collision and comprehensive coverage.

Collision coverage pays for physical damage to your car as the result

of your vehicle colliding with an object, such as a tree or another car.

This coverage is based on the value of your vehicle and can be costly.

Important information about collision coverage: Auto insurance

policies only require the company to cover your nancial losses, not to

replace your vehicle. In the case of an accident involving an older car,

the cost of repairing it can quickly exceed the value of the car and your

insurance carrier will pay you what the car was worth rather than x it.

In severe cases, the value of the car may be less than premiums paid

for the coverage. Therefore, if your vehicle is worth less than $2,000,

there is little reason for you to purchase collision coverage, because

you are likely to pay more money in premiums than you would ever

receive as a result of your claim. This coverage may not pay the full

replacement cost of the vehicle or may not satisfy the balance of your

auto loan.

Comprehensive coverage pays for damage to your car from almost

all other causes besides an accident, including re, severe weather,

vandalism, ood and theft. Comprehensive coverage also will cover

broken glass, such as windshield damage. It will also cover damage to

your vehicle if you strike an animal, like a deer.

Uninsured motorist coverage pays if you incur losses from a driver who

does not have auto insurance or a hit-and-run driver. This coverage,

when in effect, takes the place of the insurance that the other driver

should have had but did not. The coverage comes at an automatic

$250 deductible for property damage, regardless of the deductible

you may have on your other coverage.

Optional Coverage

Uninsured motorist coverage will have policy limits. It does not protect

the other driver. Your insurance company may sue the other driver for

any money the company pays to you because of the other driver’s

negligence. You must have made a police report about the accident

in order to make a claim under an uninsured motorist policy.

Under-insured motorist bodily injury coverage protects you if you are

involved in an accident that is not your fault and the other driver does

not have enough insurance to cover your loss. This coverage does not

pay for damage to your vehicle. This insurance covers you and your

passengers for bodily/personal injuries damages, or death caused by

an at-fault driver with insurance that is not sufcient to cover the cost of

your pain and suffering.

Towing and labor coverage pays the cost of towing your car to the

repair shop subject to the limit of your policy. Premiums for this coverage

are very inexpensive. However, if you are a member of an auto club,

you probably already have this service.

Rental reimbursement coverage usually pays the cost to rent a car

after an accident, subject to the policy’s terms. The premium will vary

from insurer to insurer.

Rates

Some of the factors that affect your rates—some controllable and

some not:

Age: Certain age groups tend to have more accidents, and thus

more claims. Typically, the youngest and oldest drivers have the most

claims.

Type of vehicle: Premiums are based in part on what it would cost to

repair your car if it were involved in an accident. A luxury car like a

Mercedes will likely have more expensive parts than a Ford. Insurers

will also take into account the car model’s claims record.

Driving record: Drivers with previous moving violations or accidents

are considered to be a higher risk.

Discounts: Auto insurers may offer premium discounts for numerous

reasons, including for people who have taken an approved defensive

driving course. Ask your agent what discounts are available to you.

Amount of coverage: If you choose to carry coverage above the

mandatory minimum, your premiums will be higher.

Deductible amount: Choosing a higher deductible will reduce the

premiums of your car insurance. However, your out-of-pocket expense

will be higher if you have an accident.

Usage of vehicle: The more you drive, the higher the risk and so the

higher the premium.

Where you live: Urban areas usually have more claims than rural areas.

Densely populated areas often have higher incidents of crime like

vandalism and theft that drive up claims and the cost of premiums.

Your credit score: Credit-based insurance scores are based

on information like payment history, bankruptcies, collections,

outstanding debt and length of credit history. Companies can only

take your credit score into consideration when you are applying for a

new policy, except upon the request of the insured. In that case the

consumer may be re-rated at renewal based upon a current credit

score, but only to the extent that it benets the consumer.

Ways to Save

Tips on lowering your auto insurance premiums:

Shop around and compare prices. You may want to ask friends,

family or neighbors who live near you about their experiences with

various insurance companies.

Maintain a good driving record.

Take the highest deductible you can afford on collision and

comprehensive coverage. A higher deductible will mean lower

premiums. But remember that you will be responsible for the

deductible amount if you have an accident.

Take a defensive driving course. If all drivers of a vehicle complete

an approved course you can receive 10 percent off a portion of

your auto insurance for three years. If you take a refresher course

just before the end of the three-year period you can receive a 15

percent discount.

Before buying a vehicle, call an agent for a quote on the cost of

insuring it. Sports cars and luxury cars generally cost more to insure.

Remember, a quote is only an estimate of the premium.

Review your policy periodically and update coverage accordingly.

As a car gets older and loses value, you may determine that it is no

longer worth the nancial costs to carry comprehensive and collision

insurance due to the declining value of your vehicle.

Ask whether there are discounts offered for:

• Multiple cars on a policy • Good student drivers

• Mature drivers • Accident-free record

• Airbags, anti-theft devices and other equipment

• Other insurance with same company

Repairs

After an accident, your vehicle may need to be repaired. Here are

some things you need to know:

• Check your deductible. If the damage to your vehicle is minor,

it may be less than your deductible. For example, if your bumper

needs to be repaired and is estimated to cost $199, and you have a

$250 deductible, you will be responsible for the entire amount. The

insurance company will not owe you or the repair shop anything

until the cost goes over $250.

If you have a $250 deductible and the repair estimate is $1250, you

would pay the rst $250 and the insurance company would pay the

remaining $1000.

• The insurance company will assign an adjuster to estimate the

damage to the car and how much the company will pay to have

it xed. Again, if the damage is determined to be less than your

deductible, you will be responsible for all of the repair amount.

• The nal choice of repair shop is yours. You may want to use a

repair shop the company recommends. However, if you choose a

different one, be aware you may have to pay the difference if your

body shop’s estimate is higher than the insurance company’s, unless

the increase can be justied and agreed upon by all parties. One

advantage of using your insurance company’s preferred shop is

that their work is typically guaranteed by your insurance company.

• If you choose to put a brand new part on an older car instead

of a salvaged or remanufactured part, you may have to pay the

difference in cost.

If You’re In An Accident

Stop and keep calm. Do not drive away from an accident. Do not

argue with the other driver over the cause.

Call an ambulance, if needed. Do what you can to provide rst aid, but

do not move an injured person unless you possess medical or lifesaving

expertise, or unless there is a life-threatening event, such as a vehicle

leaking gas.

Move your car. In a fender bender or other minor crash, police advise

that you move your car out of the street or highway, to a clear area

where it will not be a hazard to other trafc. Police will be able to

determine who was at fault from descriptions and evidence.

Call the police. Dial 911 to notify the appropriate law enforcement

authorities. Fully cooperate with the ofcers responding to the

accident. Give the police ofcer the personal information that you

need to exchange with the other driver. If the accident occurs on

private property, such as in a parking lot, you will need to exchange

information with the other driver yourself (see next step).

Gather information. Exchange driver’s license, registration, and

insurance information. Obtain witnesses names, phone numbers, and

addresses. Record a description of the accident event and what led

up to it. Take pictures of the scene and vehicles involved. If the police

are called, ask for the ofcer’s name and report case number.

Call your insurance company or agent. Use the claims contact number

on your insurance card or call your insurance agent. This person will go

over your policy with you and will verify your coverage.

Beware of scams. If anyone calls you and tells you that “you must act

now” to keep your coverage simply hang up the phone. Don’t rely on

caller ID. Some scammers are able to display a company’s name or

phone number on the caller ID screen.

You can always call the Department of Insurance if you are not sure if

an offer or a call to action is fraudulent or legitimate.

Motorcycles

A motorcycle owner and driver is required to carry the same minimum

amounts of bodily injury protection, property damage and personal

injury protection as any other vehicle (see pages 5, 6 and 7 of this

guide). Many motorcycle owners choose to purchase additional types

of non-required coverage, just as they do for their automobile. Your

best bet is to have a thorough discussion with your insurance agent to

discuss your needs, your wants and what’s possible with your budget.

• When inquiring about a policy, an agent may give you a quote

based on the minimum personal injury protection (PIP) limit of

$15,000, but with a $15,000 deductible. That means, unless you

deliberately choose otherwise and pay an additional premium, you

will essentially have no PIP coverage, as the coverage limit of $15,000

will be reduced to zero by the deductible. Consider other options

which come at a higher premium but with lower deductibles. Ask

your agent about the difference between “restricted” PIP coverage

and “unrestricted” PIP coverage.

• A motorcycle insurance policy may provide only limited benets.

For example, a lower premium policy may provide medical and lost

wage benets for only those accidents which occur (a) on a highway

and (b) when there is actual physical contact with another vehicle.

To receive coverage for a greater range of potential accidents, you

will likely have to pay higher premiums.

Possible Discounts: Just as with traditional auto insurance, ask your

insurance company about any possible discounts they offer for

motorcycle insurance. Discounts are sometimes provided for the

following situations:

• Complete an approved motorcycle safety training course

• Multi-line discount for auto or home insurance with the same

company

• Motorcycle rider organization member (like Harley Owners Group)

• Good driver or mature driver

• Theft recovery discount for bikes with a GPS theft-recovery system

“Other” Motorized Vehicles

Many people own motorized vehicles, aside from their everyday car or

truck, that are used on or off-road. While some of these vehicles require

registration with the Department of Motor Vehicle (DMV) others do

not. If the vehicle requires registration you will be required to purchase

insurance. However, if the vehicle does not require registration you may

still want to purchase insurance to protect your investment and yourself

from any possible lawsuits.

How to Determine if Insurance is Needed

Under Delaware law a 4-wheeled motor vehicle (other than a car or

truck) that attains a speed of at least 20 mile per hour, but less than 25

miles per hour in 1 mile and will be driven on a paved road (other than

a highway) is classied as a low speed vehicle (LSV) and it would need

to be registered and insured. The one exception to this law would be

a farm vehicle. This type of vehicle is designated with a license plate

starting with “FT” and is used solely for the purpose of operating a farm.

This vehicle may be exempt from registration if certain rules are met. You

may want to contact your local DMV to determine the requirements for

registration. Some examples of LSV vehicles would be:

• Mopeds

• Tri-peds

• Motor scooters

Examples of other vehicles that would not require DMV registration or

insurance coverage would be:

• Golf carts

• Boat, Watercraft

• ATVs

• Dirt Bikes

• Snowmobile

*Please note, while these vehicles do not require registration, trailers

that carry the vehicle still require DMV registration and insurance

coverage.

“Other” Motorized Vehicles

What Coverage Should I Buy?

Many owners will purchase insurance coverage similar to automobile

insurance to insure the same protections. The coverage will depend

upon the type of vehicle you wish to cover. Examples of some of the

standard coverages would be:

• Collision coverage

• Liability coverage

• Comprehensive coverage

• Medical payments

• Guest Passenger Liability coverage

Depending on what type of vehicle you have, there are more optional

coverages available:

• Total Loss Replacement

• Accessory coverage

• Uninsured/Underinsured Motorist

• Towing and Road side assistance

• Bodily Injury

• Optional Equipment

Where Can I Buy This Insurance?

Depending on the vehicle type you have, some homeowner’s

insurance policies will cover the vehicle automatically. However, the

coverage may be limited and payable only under certain situations.

Therefore, you may want to talk to your agent about the scope limits

of your current policy. If the vehicle is not covered under your existing

policy you should review the more specic policies available through

your automobile or homeowner’s agent. If you are not able to locate

a policy to t your needs or vehicle type you may need to consider a

surplus line product or personal umbrella policy.

Information continues on next page...

Motorized Vehicles (Cont.)

• Surplus Lines insurance allows people to buy property and casualty

insurance where policyholders, agents, brokers and insurance

companies all have the ability to design specic insurance coverages

and negotiate pricing based on the risks to be secured.

• Personal Umbrella Policy (PUP) is a type of insurance that provides

liability coverage over and above your automobile or homeowner’s

policy. If your liability coverage isn’t enough to cover the accident you

cause or an incident on your property, a personal umbrella insurance

policy picks up when your other insurance limits have been reached.

Information continued from previous page...

Need Help?

The Delaware Insurance Commissioner’s Ofce is here to help if you

have questions about, or problems with, your insurance coverage or

insurance company.

Filing a complaint: Questions about insurance or complaints about

an insurance company or agent/adjuster can be made to the

Consumer Services division by phone, fax, letter, email or with an

online complaint form. Visit our website:

http://insurance.delaware.gov/services/lecomplaint/

If your auto insurance is being cancelled or non-renewed, you may

have a right to le an appeal with the department as stated in 18

Del. C. 3906 (a). Visit our website:

http://insurance.delaware.gov/services/lecomplaint/

Arbitration: If complaints to the Insurance Commissioner’s Ofce

do not provide a suitable solution, you may take part in a formal

process called arbitration. In arbitration, you le a formal complaint

against a company, somewhat like a lawsuit, but instead of a judge

and jury, the case is decided by a three-person panel made up on

an attorney and two insurance adjusters who have no interest or

stake in the case.

Arbitration is available only after several attempts to resolve the

matter informally have failed. To start the process you will be

required to pay a $50 ling fee, for matters involving auto insurance.

Notes

Use this space for notes or questions for your agent or Consumer

Services staff:

____________________________________________________________________

THE INSTANT

INSURANCE GUIDE:

AUTO

NEW

INFORMATION

FOR 2018

TRINIDAD NAVARRO

Insurance Commissioner

DELAWARE DEPARTMENT OF INSURANCE

302-674-7300  insurance.delaware.gov

Delaware Department of Insurance

insurance.delaware.gov

302-674-7300

Insurance Commissioner’s Ofce

“Protecting Delawareans through regulation and

education while providing oversight of the insurance

industry to best serve the public.”

The Delaware Insurance Commissioner’s Ofce is here to

help if you have questions about or problems with your

insurance coverage or insurance company.

Questions about insurance or complaints about an

insurance company or insurance agent can be made

to the Consumer Services division by phone, by fax, by

letter, by email or with an online complaint form:

Phone: 1-800-282-8611 (Toll-free in Delaware)

or 302-674-7300

Fax: 302-739-6278

Email: consumer@delaware.gov

1351 W North St STE 101.

Dover, DE 19904

Visit the Delaware Department of Insurance website to

nd more information and tips about auto insurance

and the services we provide at insurance.delaware.gov