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| CAARP Introduction, Part II: Private Passenger | ||||||
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Submitting the Completed Application The producer is responsible for rating the policy and submitting a completed application with the signature, date and time of the applicant and the signature date and time of the producer. The producer is also responsible for completing the Eligibility Certification Statement- Section 13 on the application.
Payment Options There are 3 separate payment plans available to applicants who are applying for the California Automobile Assigned Risk Plan.
Requesting an Effective Date In order for an applicant to have an immediate effective date, the producer must follow the effective date rules as set by the California Automobile Assigned Risk Plan. The fully completed application with copies of all drivers licenses and vehicle registration(s) must be mailed to CAARP and postmarked by the US Post Office within 2 working days of completion. Metered mail and Internet stamps are not acceptable postmarks for effective date purposes. See the next section of this course on EASi for electronic binding requirements. It is best not to bind coverage for an applicant until all the required documents and deposit check are ready to mail in with the completed application. For example, if your applicant says they will come back with the deposit "tomorrow" but does not come back until 2 days later, it will be too late to mail the application in order to honor the requested effective date. There can be no effective date or time prior to the binding of the application. Future effective dates can be requested up to 45 days in advance when using the electronic binding procedure. If an application is bound using the electronic binding system and the applicant decides he doesn't want the insurance after all, the reference number must be retracted. Retraction forms can be found at the Plan website www.aipso.com/ca. The retraction form must be send to CAARP with a copy of the voided application within 4 days. The retraction forms can also be used when an error is used in making the binding and the producer wants to re-bind the application with the correct information. No ID Cards May be Issued A producer may not give the insured an ID card for two reasons:
What to Give the Applicant Instead When an application is completed and the producer is ready to mail it in with the required documents, the applicant may ask for proof of insurance. The only acceptable proof that can be given to the applicant is a copy of the completed application. The applicant should be advised to keep the application in the car until they receive the assignment notice from CAARP. The assignment notice is good for 45 days as proof of insurance and should be used until such time that the insured receives their ID cards from the assigned company. Returned Applications Any application that is not fully completed and submitted with a copy of the vehicle registration or the drivers license will be returned to the producer for correction. The producer is given 10 working days to correct the application and return it to CAARP. If the application is returned within 10 working days, the original requested effective date will be honored by CAARP if the producer complied with the effective date rules. Rejected Applications On all CAARP Private Passenger applications, the applicant must indicate whether they are a "good driver" or "not a good driver" based on the California Insurance Code. If the applicant checks that they are not a good driver, that section is complete. If the applicant checks that they are a good driver, they must answer questions about why a good driver is getting insurance through CAARP. The producer must indicate what company refused the applicant for insurance, the contact name of the person at the company who informed the applicant they were not eligible and the reason they were rejected. The application will also be rejected if the applicant does not sign the application. If an application is rejected there is no coverage and the application will be returned to the producer of record. Assignment Notices Once an application is processed and assigned to an insurance company, written notices are sent to both the insured and producer. The insured's notice will tell them what company they were assigned to, including the company's address, phone number, and the date the policy went into effect. This notice is good for 45 days as proof of insurance. Within 30 days from the date the assigned company receives the application from CAARP, they must issue a policy. The producer's notice will provide the same information as the insured's, but it will also notify the producer if there are any violations on the application. It is important to take note of any violations or any effective date changes. Commission The company must pay the producer the full commission due within 30 days from the date the assigned company receives the application from CAARP. The private passenger commission is 12% of the policy premium. The producer is guaranteed $35.00 in commission at the inception of the policy, even if it is only in force for just one day. The producer states on the application that they will repay any unearned commission within 30 days from the company's request. |
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© 2008, LunchTimeCE, Inc and AIPSO. All Rights Reserved. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc. and AIPSO, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course. |
