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What is my insurance companies “surcharge disclosure”?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 11/17/2015

The surcharge disclosure plan for an insurance company varies by company and even by state.

When you get into an accident or earn a traffic violation, your insurance company will eventually find out about it. Once they do, you will most likely see your insurance premium increase; depending on what your insurance company’s surcharge plan is.

A surcharge plan is:

• The dollar amount that your insurance company will pay up to for an accident, before they apply a surcharge.

• Accidents that they do not apply a surcharge to.

• Traffic violations they apply a surcharge to.

• The amount of time that they will keep the surcharge on your insurance policy for, after a traffic violation or accident.

• The surcharge rate for the initial accident or traffic violation, and each one after that.

Now, the surcharge disclosure is a written statement that specifically states the surcharge plan of your insurance company. In most states the disclosure plan has to be provided to the consumer prior to purchase. For example, in Minnesota the law states:

“Before accepting the initial premium payment, an insurer or its agent shall provide a surcharge disclosure statement to any person who applies for a policy which is effective on or after January 1, 1983. If the insurer provides the surcharge disclosure statement on the insurer’s Web site, the insurer or agent may notify the applicant orally or in writing of its availability for review on the insurer’s Web site prior to accepting the initial payment, in lieu of providing a disclosure statement to the applicant in writing, if the insurer so notifies the applicant of the availability of a written version of this statement upon the applicant’s request. The insurer shall provide the surcharge disclosure statement in writing if requested by the applicant. An oral notice shall be presumed delivered if the agent or insurer makes a contemporaneous notation in the applicant’s record of the notice having been delivered or if the insurer or agent retains an audio recording of the notification provided to the applicant.” (2011 Minnesota Statutes 65B.133 Surcharge Disclosure)

For the specific surcharge disclosure for your insurance company, you will have to contact your insurance agent or insurance company directly.


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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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