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Guide to car insurance
Personal Auto Insurance
Coverage for non-owned autos is more restrictive than owned-autos. Questions to consider are:
Who? Only Resident Relatives / Family Members
What? Type of vehicle? (Private Passenger Auto, Motorcycle, Motor Home, Box Truck, Moving Van, etc.)
When? Only during the Policy Period
Where? Only in the USA, its Territories and Possessions, Canada, or Puerto Rico
Why? If business use, may be Excluded or limited to vehicles < 10,000 GVW
Rental Car Optional Protection Products
There are normally 4 options available: 1) Collision or Loss Damage Waiver. This is not insurance but a hold harmless agreement releasing your responsibility for damage to the car. There are several exclusions – see attachment. ($15-$22 day)
2) Personal Accident Insurance. Provides the minimum limits of liability insurance ($25,000 per person) and some accidental death coverage. ($3-$5 day)
3) Supplemental Liability Protection. Increases the liability insurance to $1,000,000. ($14 day)
4) Roadside Assistance Protection. Covers replacement of lost keys, lock out and flat tire service, etc…things that aren’t the car’s fault. ($4-$5 day)
Personal Umbrella Insurance
Most umbrella policies provide worldwide automobile liability if the suit is brought in the US. Since the personal auto policy will not respond outside the coverage territory, an umbrella can ‘drop down’ and pay the first dollar. Beware of ‘following form’ umbrellas which only cover the vehicles listed on the personal auto policy – they do not extend to rental vehicles.
A Few Other Things
• Do you have Rental Reimbursement coverage now? How much? Most policies provide $600 per disablement, but that may not be enough. Check with your agent for the cost to increase to $750, $900, or more. Do you have Rental Reimbursement for Collision losses only? What about Comprehensive claims?
• When you pick up your rental car, before you drive away, document the car’s condition. Using your cell phone, take pictures or video, pointing out any dings or dents. Email a copy to yourself, to document the time and date, before you leave the lot.
• If you have a commercial auto policy, coverage for non-owned autos must be endorsed for Liability and Physical Damage. Premiums are typically $105-$150 year. Look for “Hired and Non-Owned Auto Liability” and “Hired Auto Physical Damage” on the declarations page.
• If you are furnished a company car and have no personal auto policy, you may not have any non-owned autos coverage. A commercial auto policy typically extends non-owned autos coverage to executive officers and their spouses but not employees. If needed, you can purchase a non-owners policy.
• Advantages to purchasing the liability and damage waiver from the rental agency include: No claim on your policy, no deductible, no hassles or missed flights, no loss of use fees, and no diminished value issues.
Assuming I carry liability and physical damage insurance, am I covered if…
a. my husband rents a moving van?
b. I rent a car in Europe?
c. my best friend and I rent an RV to drive to Canada?
d. I rent a motorcycle to tour the Rocky Mountains?
e. my 21-year old daughter rents a truck?
Am I covered?
…my husband rents a moving van?
It depends. Does your carrier extend coverage to this type of vehicle? Some do not, so check with your agent. Is it for business purposes? If so, it may not be covered. What if he moved out 3 months ago? If so, he would not meet the definition of a family member and would need to buy liability and the damage waiver from the rental agency.
…I rent a car in Europe?
It is not within the coverage territory, so the auto policy will not respond. If you have an umbrella policy, check with your agent to make sure it would provide worldwide liability. You would need to buy the damage waiver from rental agency. (If it were me, I would buy liability coverage too. Who wants to handle a liability claim from overseas when you return from vacation? It could drag on for months or years.)
…my best friend and I rent an RV to drive to Canada?
It depends. Does your carrier extend coverage to motor homes? Some do not. Is it for business or personal use? If business, it may be excluded or exceed the GVW limit. Your friend does not meet the definition of a family member, so your policy will not extend to him/her. Canada is within the coverage territory, so that would not be a problem.
…I rent a motorcycle to tour the Rocky Mountains?
It depends. We had this situation recently. Carrier A did not extend liability or physical damage. The insured had to purchase both from the rental agency. Carrier B extended liability but not physical damage, so the insured had to purchase the damage waiver. Carrier C extended liability and physical damage, so it was not necessary to purchase either from the rental agency.
…my 21-year old daughter rents a truck?
It depends. Does she still reside in your household? If not, there is no coverage. Where will the truck be driven? If not in the US, its territories, Canada or Puerto Rico, there is no coverage. What’s the GVW? Is it for business purposes? If so, check with your agent to make sure it would be covered.
The personal auto policy generally extends liability and physical damage coverage, if any, to a non-owned auto operated by you or a family member/resident relative within the coverage territory for personal use. • Liability – will pay damages for bodily injury or property damage that you are legally responsible for due to an automobile accident.
• Physical Damage – direct and accidental loss to a non-owned auto caused by collision, upset, or other than collision (comprehensive). Subject to the deductible listed on your declarations page.
• Non-owned auto – private passenger auto, moving van, pickup, van or trailer not owned by you or furnished/available for regular use by you or any resident family member. You must reasonably believe you have the owner’s permission.
• Family member – a person related by blood, marriage or adoption who is a household resident. A spouse or child that moves out is not considered a family member at some point.
• Territory – USA, its territories or possessions, or Puerto Rico, or Canada.
• Personal use - not a condition of coverage but if used for business, the types of vehicles are limited to vehicles < 10,000 GVW.