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How do state laws affect your home, auto & life insurance policies?

Ever wonder why insurance companies often say “product and features may not be available in all states” when you see their ads?
February 21, 2020
3 min read
How state laws affect your insurance

The reason that an insurance company's product and/or features may not be available to you is because state laws affect what insurance consumers are able to buy—and sometimes what they pay—simply based on where they live. And some insurance options that may be required by law for a customer in one state may not be required for someone in a different state. State life insurance laws, state auto insurance laws and state homeowners insurance laws all impact consumers. Here are just a few examples.


How insurance laws are affected by state:

Insurance rates by gender

Many insurance companies charge different rates for insurance based on the gender of the person taking out the policy. For example, young men are sometimes charged more for auto insurance than women of the same age. But some states now forbid insurance companies from factoring gender into the rates they charge for certain types of insurance.

Refund policy 

Did you know that some life insurance policies contain a feature called a “free look”? After a customer purchases her policy, if she is entitled to a free look, it means she can return her policy within a certain period of time and get a full refund. Some state laws require insurance companies to provide customers with a free look, and some states even specify how long the free look period must last. If you’re wondering whether a policy you are considering offers a free look and how long it lasts, ask your agent or contact the insurance company directly.  

State car insurance laws

If you’re a driver, you probably have to have auto insurance. But how much, and what kinds? By now you may have guessed that, yes, car insurance laws differ by state, so the minimum amount you must have depends on where you live. Many of the differences between state requirements are in how much coverage you have to have for liability and damage to property. Some states also require drivers to carry uninsured and/or underinsured motorist coverage, as well as other kinds of coverage. Of course, the amount of car insurance that is right for you might be more than the minimum required by law in your state.

Time to process and pay a claim

When you make a claim, how quickly does your insurance company have to settle it? State laws spell out how much time an insurance company has to process the claim and make a payment. The amount of time differs by state and by type of insurance (homeowners, auto, or life). Some states simply require prompt payments without unreasonable delays, while others specifically say exactly how many days or months a company has to complete the claim.  

Of course, state laws can change at any time, so for the most up-to-date info on how your state laws affect you and your insurance policies, contact your insurance company or agent. No matter where you live, it’s always important to read the fine print in any insurance policy before buying it to make sure you understand what it covers, what it doesn’t cover, and what it costs. If you have any questions about a policy, be sure to ask your agent or contact the insurance company directly.

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