Financial responsibility law
As an at-fault state, Alaska takes the notion of financial responsibility very seriously. Given the high concentration of people living in a few urban areas, it’s very important to ensure as many drivers as possible are insured. That way, should there be an accident, there will always be some money available to pay for medical treatment and the repair of damaged property. Indeed, the way the law is drafted gives the Division of Motor Vehicles power to remove drivers who are not responsible.
Any driver who is at fault must pay the due amount of compensation. If you have been found liable by the civil courts, the DMV is empowered to suspend your driver’s license until you pay the amount ordered by the court, i.e. up to a maximum of three years. It’s a simple rule. Carrying some level of car insurance is mandatory. If you do not buy cover or that cover is insufficient to pay the due amount, you lose your driving privileges. The only way you can then continue to drive is by producing proof you have satisfied the financial responsibility law.
The mandatory minimum liability car insurance cover for either the owner or driver to carry is 50/100/25. The amounts of $50,000 for a single individual suffering personal injuries and $100,000 for multiple claimants are far more realistic than in many other states. This means the auto insurance rates are slightly higher than they could be. The alternative to buying an auto insurance policy is to post a bond with the DMV. This is not a set requirement and the DMV will consider the individual circumstances to decide how large the bond must be — it’s usually tens of thousands of dollars so look carefully at the amount of savings you have before you even think of asking the DMV how much it wants.
Proof of insurance and accident reporting
Failure to produce evidence of a valid insurance policy when asked by a police officer is an offense. If you were uninsured or just “forgot” to carry your certificate of insurance, your driver’s license will be suspended for ninety days for the first offense. If you repeat the offense, your license will be suspended for one year. There is also a power to impound your vehicle which, in a state with almost no public transport, is a major burden.
If you are involved in an accident, you have a general duty to report it to the DMV within fifteen days. This duty applies to all the drivers involved no matter who was at fault. The triggers are any physical injury or damage to property exceeding $501.The aim of this law is to create reliable statistics of crashes. In theory, this helps set policy for future road planning. This general duty reinforces the subordinate duty to report the accident to the police. In civil law, there will also be a contractual duty to report the accident to your car insurance company, usually within seven days. If you fail to satisfy this requirement, the insurer can refuse to pay out on any subsequent claim. This could make the accident very expensive for you.
Your car insurance rights
If the car insurance company refuses your application for a policy, you have a right to know why it was refused. All you have to do is write a formal letter and the insurer is obliged to reply with “helpful” information. If there’s no reply or the reply is unhelpful, make a complaint to the Division of Insurance. Unlike other US states, the insurers cannot use a gap in your coverage as an excuse for increasing the auto insurance rate. So if you are in the military and are deployed abroad, or fall ill for a significant period of time, you should start off at the same rate before the coverage was cancelled or lapsed.
When you file a claim, the insurer has ten days in which to confirm receipt and, under normal circumstances, should complete the investigation of that claim within thirty working days. As soon as the claim is quantified, the insurer should provide you with a written explanation of how the amount has been calculated. That means you should always have a basis upon which to contest the valuation. Finally, if the claims adjuster picks the repair shop for repair work, the repairs must be guaranteed, i.e. the expectation is your vehicle will be restored to the condition it was in before the crash.
Your insurer can cancel your car insurance policy if you fail to pay the premium on time, or you are convicted of a more serious crime which places you in the high-risk category, or if it later appears you have been less than honest when making the application. The insurer must give you at least twenty days notice if it proposes to exercise the right for nonpayment. If the reason for the cancellation is a conviction or fraud, you are only entitled to ten days notice.
How much does it cost to insure?
The car insurance rates depend on your individual circumstances so comparisons between rates should be based on who you are, where you live, what make and model you want to insure, what your driving record is, and so on. That said, there are surveys that send sample applications to all the car insurance companies in your state. That way, the surveys can come up with an average rate and you can judge how expensive or cheap the rate quoted to you. Based on a hypothetical forty-year-old single male with liability cover 100/300/50, quotes in Alaska averaged at $1,454 which was the 33rd most expensive state.
To give more detail, the Division of Insurance has ten sample rates for typical individuals aged 19, 25, 40 and 72, and families with or without children. For example, a single man aged 19 in Anchorage would pay a minimum $1,203 and a maximum $4,184. At 25 this would fall to a minimum $609 and a maximum $1,253. A married couple aged 40 would have a minimum $737 and a maximum $1,470.