We are not familiar with the term "honor state" in reference to auto insurance. Many states though have statutes that safeguard the public from illegal actions of an agent or insurance company. This means most states have laws in place that an insurance company cannot unfairly give you one quote amount for car insurance and then change it, without reason, when you go to buy the policy.
It is allowed normally though that if the agent or applicant puts incorrect information in the quote, the insurance company may correct it and inform the customer of the difference in premium giving the client the option to pay the difference if there is one, or to cancel the policy. In most states, the insurance company must provide notification and give a time frame, which varies by state law, to the insured with the reason, amount and date of cancellation if the extra premium amount is not paid.
If there were illegal actions taken by the agent and or the insurance company than the consumer could contact their insurance regulator to make a complaint which may be taken care of by the regulator or could be a matter for state courts. We are not able to provide legal advice so if you have a specific issue with a quote being given and then being changed out, without a valid reason, than you can seek the advice of the Colorado Division of Insurance and/or a CO lawyer that specializes in this area of law.
The Colorado Division of Insurance does note that you can file a protest again an auto insurance carrier. In CO a protest is a formal objection to a change that your insurance company has made on your personal automobile policy. Protests cannot be filed on commercial vehicle policies or other types of insurance; the law allows this specific option for personal private vehicle insurance policies only.
If you have an insurance policy on a private passenger vehicle, your automobile insurance company may decide to make certain changes to your policy, including:
- An increase in the premium you are charged
- Non-renewal of your policy
- Cancellation of your policy, or,
- A reduction in your policy coverage.
If you disagree with the company’s action (the premium increase, non-renewal, cancellation or reduction of coverage), you have the right to protest. Be aware that companies ARE allowed to make the above changes if they comply with current Colorado insurance law.
Your driving record and claims history can affect your rates. Companies are allowed to apply a premium surcharge to drivers who have been involved in an accident or who have been convicted of traffic violations. Also, the more claims you have made, the higher your rates are likely to be.
For more information on when an insurance company can, and cannot, make changes (such as raising premiums, canceling a policy or reducing coverage), see Division of Insurance Regulation 5-2-12 listing specific circumstances under which an insurer may increase rates, cancel policies, decide not to renew a policy or reduce coverage in an existing policy.
CO law provides ten (10) days, from the date you receive the notice, to mail your signed protest, and reasons for disagreeing with the policy changes, to the Colorado Division of Insurance.
After reviewing your signed protest and reasons for the protest, the Division of Insurance may:
- uphold the company’s actions if there is no violation of Colorado law; or
- uphold the insured person (you), if the company has made a technical error on the notice you were given; or
- request additional information from both the insurance company and the consumer (you). After reviewing the requested documentation provided by both parties (the insured person – you – and the insurance company), the Division of Insurance may uphold the company’s action or set the matter for hearing
The protest process takes approximately forty-five (45) to sixty (60) days from start to finish
In basic terms, every agent should honor the quote given, unless new information is submitted or found from reports to make the original quote incorrect. Under regulation, a carrier should honor the rate filed with the state for all the rating factors submitted which is correct. So say you are given a quote of one amount however on your application you forgot about the speeding ticket you had 2 years ago, the first quote than would not be correct due to the misinformation the insurer received on your application and thus would be re-calculated once they ran your motor vehicle record (MVR) and had it to rate on.
Insurers depend upon correct information being given on your policy application and then in many states they also run your credit report and use these factors to determine your premium amount. If something is wrong within the application or they give you a quote but state that it will not be finalized until running your MVR and credit report than you cannot normally hold the insurer to their first general quote since they may find out information from your MVR and credit report that you did not accurately note on your application.
You can contact the CO Division of Insurance for more information on when insurance companies may or may not change the amount of a premium from their first stated quote amount. If you are shopping for Colorado car insurance, then click here for car insurance prices.
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