All vehicle insurance companies who do business in DC are obligated to submit to the DC DMV, within thirty calendar days, any time of canceled, terminated, or lapsed automobile insurance for automobiles registered in DC. If an insurance company fails to submit such information within the required time period, it is required by law to send a letter of notice to the DC DMV. That same notice is also required for any vehicle owner to cancel his or her insurance policy. Failure to do so immediately can result in heavy fines.
There are many auto insurance companies operating in and around Washington, DC. Unfortunately, not all of them are as conscientious as they should be. Many vehicle owners are often confused about which company to choose. Some of them may even have multiple policies with different companies. Some drivers may even be paying too much.
The first thing a new driver should know is that he or she is required by law to have at least uninsured motorist protection (UMIP), but may need to consider getting full coverage as well. Full coverage means that the insured pays the cost of repairs, medical costs, and loss for damage to or theft of the insured’s vehicle in the event that it is damaged or stolen. Some vehicle insurance companies offer “just” or “limited” coverage. Others offer “free” or “dieter” coverage. While “full” coverage is certainly preferable, most consumers still want to get at least some “free” or “dieter” coverage to help lower their premiums.
Not every state has similar definitions of “full” or “limited” coverage. Those requirements vary from state to state, and sometimes among vehicle insurance companies. For example, a Virginia vehicle insurance company may require all insured drivers to have at least PIP. A Maryland vehicle insurance company may not require full coverage but may require drivers to have collision and comprehensive coverage. That’s because they base this requirement on the assumption that all drivers will, over time, be involved in accidents and choose to carry more than one type of coverage.
Some states require uninsured/underinsured motorist coverage, which covers damage or injury resulting from the negligence or fault of the insured’s insured vehicle or driver. These policies cover only damages incurred by others and are often called “Bodily Injury Coverage”. Some states require uninsured/underinsured motorist property damage and bodily property damage liability, which covers damage or injury to an individual’s body or property caused by an insured vehicle or driver, respectively. Under these policies, if an insured vehicle is damaged or destroyed by an insured vehicle or driver and an unrelated third party is damaged or killed, the insurer must compensate for these damages. This type of policy is usually the most expensive of the three bases covered by insurance.
Most states also require that the insured pay to repair a vehicle in the event that it is totaled in an accident. This type of policy, known as an “aggrieved person” insurance policy, is required in most cases. An “otherwise” defined “person”, such as a family member, friend, rent-a-car agency employee, or a non-employee, is not covered. In Maryland, there are some exceptions. If any other person is driving on the same insurance policy as the person filing the claim, coverage may be available for any injuries caused by that other driver.
Liability coverage is a must and usually the most expensive policy you can buy. It covers damage to another person’s car or another vehicle caused by your vehicle in an accident. Usually, the higher the amount of liability coverage, the lower your premiums will be. Liability coverage also includes damage to another person’s personal property resulting from an accident with you and/or your vehicle.
Collision coverage pays for damages to a vehicle or other property suffered by a third party in an accident. It’s important that you keep the right numbers in mind when calculating your premium. Each year, the National Automobile Dealers Association (NADA) recommends that insurance companies calculate the cost of bodily injury liability per person using a standard formula, the discounts that they provide for specific drivers and the minimum limit of coverage that are required for your state. Many states have further restrictions on the minimum coverage levels and the discounts available.