The Ultimate Guide to Auto Insurance in Delaware

In 2008, the Office of the Insurance Commissioner issued a comprehensive guide for motorists in Delaware. The publication simplified the process of obtaining effective coverage and left local road users in no doubt as to their responsibilities and duties. In the longer term, it is hoped that the guide will help vehicle owners find effective auto insurance quotes that provide the correct levels of protection.

The Basics of Auto Insurance in Delaware

Most American states have a series of mandatory requirements that must be met by all motorists. Without the correct insurance measures in place, drivers may find themselves operating a vehicle illegally and this can lead to a series of stiff penalties that will have a detrimental effect on driving records. When obtaining car insurance quotes, motorists in Delaware must carry the following levels of coverage as an absolute minimum:

  • $15,000 worth of bodily injury liability per person
  • $30,000 worth of bodily injury liability per accident
  • $10,000 worth of property damage liability
  • $15,000 of personal injury protection per person
  • $30,000 of personal injury protection per accident

It is important to remember that the minimum mandatory levels of auto insurance in Delaware are actually quite low in terms of coverage and motorists are advised to purchase additional insurance to cover themselves against all eventualities. This should be remembered whenever road users are comparing auto insurance quotes although increased coverage will inevitably lead to higher premiums.

Failure to carry the minimum levels of mandatory insurance coverage requested by the state of Delaware can have serious consequences and road users are advised to seek alternative methods of transport if a suitable policy cannot be found. Motorists who drive without insurance are one of the major causes of expensive car insurance quotes. If they are stopped by a law enforcement officer and found to be driving without effective coverage, they can be fined and also have their driving privileges and registration revoked.

Optional Levels of Insurance Coverage in Delaware

There are a number of other insurance options available which may be of use to motorists in Delaware. All of these can be factored into any basic policy and if a vehicle has an outstanding loan secured against it from a bank or lender, the motorist will usually be obliged to carry collision and comprehensive coverage.

Collision coverage is a common feature on many car insurance quotes. If the policyholder is involved in a road traffic accident where they are made accountable, the insurance carrier will still pay for repair costs to the vehicle as long as collision coverage is in place. This type of coverage is usually more beneficial for motorists who own new or nearly new vehicles. If a motorist has an older vehicle which becomes the subject of a serious road traffic accident, the insurance company will only pay for repairs up to the estimated market value. Because parts and labor are notoriously expensive, policyholders often believe that collision coverage can be a false economy on older models.

Comprehensive coverage is another great addition to auto insurance quotes although, once again, it tends to benefit drivers with newer vehicles. Comprehensive coverage offers protection from theft, weather damage, fire, vandalism and flooding. Broken glass is also covered to include windshield replacement or damage caused if a vehicle is broken into.

Protection against uninsured or underinsured motorists is an increasing concern in Delaware and many road users add this particular option into their car insurance quotes. This level of coverage will pay for the cost of repairs to a vehicle if it becomes part of an accident where an uninsured or underinsured driver is at fault.  Hit-and-run accidents will also be covered by this type of auto insurance although motorists should be aware that they will be responsible for the first £250 of costs toward vehicle repairs. A police report will also be needed before any claims can be made.

Other inclusions that remain popular with motorists in Delaware are GAP insurance, Towing or labor coverage and rental reimbursement coverage. Once more, any of these additions can be factored into most basic auto insurance quotes.

How Rates are Determined

There are a number of factors and circumstances that can affect auto insurance rates and these will have a direct effect on policy prices. It is important to note that motorists actually have direct control over a number of the items and if a responsible attitude to driving is displayed in key areas, car insurance quotes can fall dramatically.

Gender and age are two of the most significant factors in auto insurance prices. Although men and women tend to be involved in a comparatively equal number of accidents, the cost of repairs when a female motorist is at fault tend to be much lower because of reduced impact caused by driving at lower speeds. Additionally, younger drivers are penalized because they are involved in more road traffic accidents than any other group. Because of this, an older female driver will inevitably find cheaper car insurance quotes than a young male driver.

The type of vehicle being driven also has a marked effect on car insurance quotes. Luxury cars and sports models are involved in a higher number of claims and repair costs are usually more expensive because of the price of components. Also, vehicles with a higher market value will inevitably cost more to insure.

The type of usage a vehicle undergoes, and the number of projected miles covered within a calendar year, will directly influence auto insurance quotes. Location is also a consideration as there are more accidents in densely populated urban areas than there are in rural areas. Even marital status has a sway on the cost of insurance. A married woman with children is likely to be more responsible than a single male without any children at all and this will be reflected in most car insurance quotes.

Discounts will be offered to young drivers who maintain good grades at school and motorists who have taken and passed a state-approved defensive driving course will also enjoy financial reductions. Premiums can be lowered further be increasing the deductible figure on a policy but motorists should note that their out-of-pocket expenses will be significantly higher if an accident actually occurs.

Saving Money on Car Insurance Quotes

There are a number of useful tips which can be implemented by road users in Delaware and all of them can help in securing cheaper auto insurance quotes. The following list highlights just a few simple ways in which savings can be enjoyed:

  • Comparing prices is the key to cheaper car insurance quotes. This can be done by gathering prices from a series of different insurers or through use of price comparison websites
  • Avoiding accidents, ticket and other violations will help in building a good driving record which will be looked upon favorably by car insurance companies
  • Choosing a high deductible figure will slash premiums but motorists should only carry out this action to an affordable level
  • Defensive driving courses show increased levels of responsibility and will secure discounts from most major insurance carriers
  • Always try to obtain car insurance quotes before purchasing a vehicle. Some models will be more expensive to insure than others and affordability should be established by combining the figures of effective coverage, operating costs and the price of the vehicle itself
  • Policies should always be reviewed and updated on a regular basis. As the value of a vehicle depreciates over time, insurance requirements may not be as extensive and cheaper auto insurance quotes will lead to larger savings
  • Never be afraid to ask for discounts if you feel they are not being applied. Some carriers only offer discounts upon request as a means of maximizing their profits. There are a number of considerations where reductions may be applicable and these include safety or security features, safe overnight parking, multiple drivers on a single policy and grouping all insurance requirements with a single company

Understanding Repair Costs

If the inevitable happens and a motorist is involved in a road traffic accident, there are a number of things to consider. One of the most important of these is the effect that deductible costs can have. As an example, a road user may have agreed to a deductible figure of $250. If a bumper is damaged and repair costs are estimated at $200, the policyholder will be responsible for the entire amount. If the damage is more extensive and repair costs are estimated at $400, the policyholder will still be responsible for the first $250 of repair costs but the insurance company will pay the outstanding balance of $150.

After an accident, an adjuster will be assigned and they will provide an estimate for the cost of repairs to the damage vehicle. As before, any costs under the deductible figure will have to be met by the policyholder. Although most insurance carriers have a series of approved body shops that they work with, the final choice of where a car is repaired comes down to the vehicle owner. If there is a large difference in the estimated cost of repairs, the vehicle owner must be able to justify their reasons for wanting to use a particular body shop. If they fail to do so, the insurance company may require them to pay the surplus figure personally.

After an Accident

There are a number of considerations that need to be made immediately after a road traffic accident. Handling a claim incorrectly may lead to an insurance carrier refusing to carry out work on behalf of the policyholder. Additionally, any future car insurance quotes may be excessively expensive. Motorists are advised to carry a checklist in their vehicle at all times:

  • Always remain calm and never leave the scene of an accident. Do not get involved in arguments with other drivers as to the cause of the accident and never admit responsibility
  • Administer first aid wherever possible but leave any serious injuries to trained paramedics unless the situation is potentially life-threatening
  • Wherever possible, move vehicles from the highway to a safe area to reduce the risk of further vehicles becoming involved in the accident. Other motorists can be easily distracted by accidents and this will only complicate matters further. In most cases, the police will be able to decide on accountability for an accident using eyewitness descriptions and other evidence
  • Call 911to notify law enforcement officers of the accident and try to be polite and helpful when they arrive on the scene
  • Information will be vital in establishing a successful claim. Be sure to take notes from the other driver including insurance and registration details. Always take contact details from eyewitnesses and write down a brief description of how the accident happened if it is possible to do so. If a cell phone is fitted with a camera, take photographs of the scene of the accident to help investigators at a later stage
  • Contact your insurance carrier at the earliest available opportunity. Good communication and a timely presentation of the facts surrounding an accident can see claims settled in a shorter period of time

Adding Teenage Drivers to a Policy

In many cases, a parent or guardian will cover the cost of insuring a young driver. Car insurance quotes can be particularly expensive for these high-risk individuals but there a number of options available to help keep costs down. It is often advisable to purchase a cheaper, older vehicle for young drivers, especially if the main family car is a luxury or sports model.

Check with insurance companies to see when a teenager needs to be added to a policy. This can vary between carriers and some will require them to be added to insurance documentation as soon as they receive a restricted license or learning permit. Other companies will not require young drivers to be added until a full or unrestricted license is in place. Good student grades and passing a defensive driving course will help bring down the cost of auto insurance quotes.

Insuring a Leased Car or Rental Car

If a vehicle is leased, the driver must still have auto insurance coverage in place. Most auto dealers and banks will need to see collision and comprehensive coverage purchased before a vehicle will be released. GAP insurance is also vital when purchasing coverage on a leased vehicle. If the vehicle is involved in a road traffic accident where it is declared a total loss, GAP insurance will cover the differences between the amount owed on the lease and the settlement provided by the insurance company.

There will usually be no need to take out insurance on a rental car. If a motorist already owns collision and comprehensive coverage, they will remain insured in a rental vehicle so long as it isn’t being used for business purposes. Short-term auto insurance coverage is available through most carriers for those without an existing policy.

Defensive Driving Courses

A defensive driving course can an excellent way of securing low-cost auto insurance quotes and can see up to 10% reduced of certain areas of a premium for the first three years. If a refresher course is taken at the end of this three year period, the discount will rise to approximately 15%. In Delaware, defensive driving courses take place in a classroom environment where multiple drivers sit examinations at the same time. However, the Office of the Insurance Commissioner is trying to facilitate an online defensive driving course and these should be available in the near future.

If a Policy is Cancelled

Unless there are exceptional circumstances, an insurance company can only cancel a policy if premiums remain unpaid. A policy can also be cancelled if something significant happens that might have an effect on the policy itself, such as numerous traffic violations or a change of vehicle. The insurance company retains the right to withdraw or refuse a policy on any reasonable grounds so effective communication between carrier and road user is essential.

If a policy is cancelled, motorists may find it difficult to purchase a policy elsewhere. If this situation occurs, vehicle owners can join the Delaware Auto Plan which is sponsored by the state as a means of providing coverage for those who cannot obtain car insurance quotes in the traditional manner. The rates applied within the Delaware Auto Plan are higher than those applied by traditional carriers and this option should only be considered as a last resort.

Preventing Insurance Fraud

Insurance fraud remains a burden on the entire industry and results in additional costs for carriers and road users alike. Effectively, there are two different types of insurance fraud. These are classified as application fraud and filing false claims.

Application fraud will include, but is not limited to, the following situations:

  • Application fraud is committed when falsely declaring where a vehicle is kept. If a vehicle is kept in another state during the week and is only brought back to Delaware at weekends, insurance companies should be aware of this. Falsely claiming that a vehicle is kept under locked conditions overnight is also an offence
  • If a motorist fails to declare any previous claims or accident during the process of application, fraud will be deemed to have been committed
  • If any eligible drivers within a household are not declared on a policy, this is also treated as application fraud
  • Application fraud has been committed if coverage is taken out where the policyholder will not be the principal driver. This particular form of fraud is normally used when the principal driver cannot obtain a policy elsewhere themselves

Filing a false claim usually relates to any of the categories below:

  • Overstating the cost of repairs after a road traffic accident or an act of vandalism or theft
  • The adjustment of estimates and receipts to illegally exhort money from an insurance carrier
  • The creation of false receipts or other documentation pertaining to an accident
  • Claiming false or exaggerated sums for loss of earnings or medical expenses as a result of a road traffic accident

Insurance fraud is a criminal offence and can result in imprisonment for up to two years and fines not exceeding $10,000.

Preferred Insurance Companies

Somewhat surprisingly, 86% of all insurance policies in Delaware are issued by just ten different companies. Nationwide Insurance and State Farm Insurance cater for a massive 45% of the current market share between them while other leading insurers such as Progressive and USAA also enjoy significant success in the area.