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Car Insurance Goes Back to Basics?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 04/17/2014

Q: I have heard that Bear River Mutual coverage limits default to the state minimum when you have an accident? Is there any truth in that claim?

A: That sounds highly illegal to me. An insurance company cannot change your auto insurance coverages without your consent, except in regards to your insurance premium.

In my experience though, an insurance company will jack up your premium or drop you completely before they would decrease your coverage. First of all, they are going to want to recoup the money they just paid out for your claim, so by keeping you at your current coverage level and increasing your premium they will make that money back faster than if they were to decrease your coverages with a lower premium. Second, if you really messed up and they are afraid of you doing it again, they aren’t going to want to keep you around at all and will just give you the boot out the door.

If there are any changes to your insurance premium or policy, most states have strict timelines that the insurance companies have to follow so that you have plenty of notice of any upcoming changes.

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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