There would be misrepresentation by Lawrence toward the policy
and the insurer can void the policy.
The seven principles of insurance
are :-
- Principle of Uberrimae fidei (Utmost Good Faith),
- Principle of Insurable Interest,
- Principle of Indemnity,
- Principle of Contribution,
- Principle of Subrogation,
- Principle of Loss Minimization, and
- Principle of Causa Proxima (Nearest Cause)
In this case study Lawrence has violated princilple of utmost
good faith.Under this principle both the insured and insurer should
be having good faith towards each other.
Also the insurer and insured must provide complete , correct and
accurate information about the subject matter.
So, use your due diligence and learn more about the things that
can make your auto insurance premium increase including these
10 things you should know about insurance points.
- Not all tickets or accidents end up on your driving
record. Driving offenses can be either moving or
non-moving violations. Many times, a first-offense, non-moving
violation will not end up on your driving record. Non-moving
violations are things such as not wearing a seat belt or failure to
produce proof of insurance when stopped. Also, there is always the
chance that the police department may not report a violation to the
department of motor vehicles, especially in a first-offense
situation. Of course, you can never be sure of this without
checking your driving record.
- Not all states use the point system.
While many states use a point system to track violations on your
driving record, not all of them do. So, chances are, if you live in
a state that does not use a point system, your driving record may
not reflect the violation. There are nine states that currently do
not use a point system, including Hawaii, Kansas, Louisiana,
Minnesota, Mississippi, Oregon, Rhode Island, Washington, and
Wyoming. However, just because you are not being assigned
points against your driving record does not mean your driving
violations are being ignored. These states monitor your driving
violations and if you continue to accumulate offenses, your license
could eventually be suspended.
- Driver’s license points and insurance points are
not necessarily the same thing. If you are unsure
about the price of an auto insurance quote, ask the insurance agent
more about what points are being charged on your auto insurance
quote and how this affects the premium. You may be charged for
insurance points assessed by the insurance company itself rather
than points charged against your driver’s license. You can pay
extra for auto insurance based on where you live, the type of car
you drive or for prior auto insurance claims you have filed.
- You may be able to remove insurance points from
your driving record by attending an approved driving
course. These courses generally teach good traffic
safety practices. In some cases, taking an approved course can keep
a driving offense off of your driving record completely. This
option is sometimes offered in traffic court and is a good option
to keep your auto insurance rates from increasing.
- You should know your driving record before buying
an auto policy. The best practice is to know what
your MVR (Motor Vehicle Record) report shows before you try to buy
an auto insurance policy or switch insurance companies. It is
highly likely that any auto insurer will at some point check your
driving record. If you are not forthcoming about any tickets or
accidents on your driving record, your auto insurance quote will
not be accurate and the rate will go up once the insurer accesses
your MVR report. If you are unsure what offenses are listed on your
driving record, you can obtain a copy from your Secretary of
State’s office for a small fee. The fees vary from state to state.
Some online services also provide access to your MVR report, but
for a substantially higher fee.
- Tickets and accidents aren’t the only things that
can increase your auto insurance premium. If you
notice an auto insurance increase in premium, the culprit may be
something other than points against your driving record. If you
have poor credit, many auto insurers will charge a higher premium.
Also, if you have recently moved, your location may be considered
“high risk” meaning there is more traffic and accidents are more
likely to occur. Changing vehicles may also make your auto
insurance premium increase. These vehicles typically cost more to
insure: luxury cars, sports cars,
convertibles, vehicles that perform poorly in safety
testsand vehicles with a turbo-charged engine.
- Some types of violations will definitely increase
your auto insurance rates. Major violations are
reported to the department of motor vehicles are will show up on
your driving record. Some of these major violations include
racing, DUI or impaired driving, reckless driving, refusing a
breath test for DUI, hit and run (failure to stop), fleeing from
police or driving on a suspended license. If you end
up with too many violations, your auto insurer could drop your
coverage. If this happens, you may be considered a high-risk driver
and only able to purchase high-risk auto insurance from a carrier
who offers it. These insurers typically also provide the SR-22
requirement if you are required to file it with your state.
- There are some violations that typically do not
affect your insurance rates. For a first offense, a
minor non-moving violation may not show up on your driving record
or affect your insurance rates. However, if you continually receive
multiple tickets for even minor violations, you may eventually be
charged points on your driver’s license. Some of these minor
violations include: safety belt or child seat,
failure to yield, speeding, improper passing or turning,
passing a school bus, expired driver’s license, no proof of
insurance, broken tail lights, not displaying license plate,
parking violations, noise violations, registration violations,
failure to appear violations, texting or following too
closely.
- It is difficult to determine how much your
insurance premium will increase. There is no way to
tell how much your insurance premium will increase after a ticket
or accident is reported on your driving record. Every insurance
company has its own formula for calculating insurance points and
how much these points will increase your auto insurance rates. If
you have an insurance company that offers accident forgiveness,
your rates may not go up at all after your first accident.
- A major driving offense could affect your insurance
rate for up to 10 years. The amount of time a driving
offense will remain on your driving record varies by state. For
major offenses such as a DUI, auto insurers may check your record
as far back as 10 years. For other violations, an insurance company
may only check your driving record for the past three years. If you
are unsure, you should ask a company representative to explain how
insurance points are used to calculate your auto insurance
rates.