Warning: include() [function.include]: URL file-access is disabled in the server configuration in /home/bestbiz/public_html/archives/2007_02_01_arch.php on line 39

Warning: include(http://sbcia.com/includes/navigation.php) [function.include]: failed to open stream: no suitable wrapper could be found in /home/bestbiz/public_html/archives/2007_02_01_arch.php on line 39

Warning: include() [function.include]: Failed opening 'http://sbcia.com/includes/navigation.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/bestbiz/public_html/archives/2007_02_01_arch.php on line 39

Insurance Resources

Should I Purchase the Coverage offered by the Rental Car Company?

Purchasing a Collision Damage Waiver on Your Rental Car Can Make Sense

Although the fees can be considerable, it may be a good idea to purchase a collision damage waiver the next time you rent a car. You may believe you have enough protection from your Personal Auto Policy (PAP); however, that's just not the case.

Gaps in Coverage

Your PAP typically covers the lesser of the actual cash value of the car or the minimum amount to repair or replace it. Your contract with the rental car company may require you to reimburse them for the full value of the vehicle in which case you would have to make up the difference out-of-pocket. The PAP also does not pay for any increased value of new parts replacing old ones, or any diminution of value, meaning if the market value of the vehicle after repairs is less than that before the accident, you would have to make up the shortfall.

Another area where the waiver can be of great importance is in the settlement process. Your insurance company has the right to inspect and appraise the damaged car before repair or disposal. However, the rental company is not bound by the terms of your policy, and it may opt to complete the repairs immediately. This would possibly result in your not being covered because you didn't comply with the terms of the policy.

Immediate Reimbursement for Damages

Additionally, the rental agreement may require immediate reimbursement for damages. Without the waiver, they could put these charges on your credit card which can create unexpected cash flow issues.
Rental agreements often make the renter responsible for any loss in value beyond normal wear and tear, regardless of the cause or who's at fault. Your PAP doesn’t cover this contingency unless you insure at least one vehicle for both collision and other-than-collision coverage.

Loss of Use

You could also be responsible for the rental company’s loss of income on the damaged car. Your policy has limited coverage for these charges. The same is true for any administrative or loss-related expenses such as towing, appraisal, claims adjustment, and storage fees you may be charged.

Confusion as to who pays

Another issue to consider is that your PAP is considered excess coverage if any coverage is provided by the owner of the auto or there is any other applicable physical damage insurance; or there is any other source of recovery applicable to the loss, such as travel policies, credit card coverage, etc. This can create a controversy over who pays, which can result in messy litigation.

If you have additional questions or would like a coverage review, get in touch with Chris Baumli, CIC at cbaumli@sbcia.com or call 512-338-0100 and ask to speak to one of our licensed counselors.

Labels: , , ,

Where's the Insurance? Beware of Uninsured Drivers

About twenty years ago, a famous hamburger chain ran a series of commercials featuring a cute octogenarian named Clara Peller. This feisty little old lady claimed her fifteen minutes of fame asking that now famous question, "Where's the beef?" While it may have been funny to watch her put fast food restaurant owners on the spot, it is not at all funny if you're in a car accident and you ask the other driver for their insurance card only to find out they have none.

The Risk

Unfortunately that's a scenario that happens all too frequently. As the cost of living rises and paychecks don't meet needs, people start making decisions about where to cut expenses. One of those decisions may be to eliminate or greatly reduce the amount of their car insurance. They need the car and take the calculated risk that they won't get into an accident, but invariably, they are wrong. In fact, the possibility of an uninsured motorist hitting you is greater than you may realize. There are some states in which almost 32 percent of all drivers do not carry automobile insurance. The national average is 14 percent.

Uninsured Motorists Coverage

You can protect yourself from an uninsured driver, or even an underinsured driver, whose negligence causes you to be involved in an accident. The first way is with uninsured motorists (UM) coverage. It provides insurance protection for bodily injury, and in some states, property damage, caused by an uninsured driver. This type of policy permits you to collect from your own insurance carrier just as if it provided liability coverage for the uninsured driver.
Uninsured motorist bodily injury coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver without car insurance. Uninsured motorist coverage also pays for injuries that result from a hit-and-run accident. Policy owners choose the coverage limit when they buy their policy.

Uninsured motorist property damage coverage protects you if your vehicle is damaged in an accident caused by a driver without car insurance. Other protection provided by this type of policy varies from state to state. If available, the deductible for uninsured motorist property damage is usually $250. This is often substantially less than the collision coverage deductible found in your auto insurance policy.

Underinsured Motorists Coverage

The other policy alternative is underinsured motorists (UIM) coverage. This provides insurance protection for bodily injury, and in some states, property damage, caused by a negligent motorist who is not sufficiently insured and whose negligence results in an accident. The bodily injury portion of this kind of coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured. It usually pays the difference between the coverage limit you select and the other driver's bodily injury coverage limit.

Underinsured motorist property damage coverage protects you if your car is damaged in an accident caused by a driver with insufficient auto insurance coverage. Other specific protection provided by this type of coverage varies by state. As with bodily injury, property damage coverage pays the difference between your policy's coverage limit and the other driver's property damage coverage limit.

When you are deciding whether or not to buy either of these coverages, keep two very important points in mind. Both UM and UIM coverage are broad in scope because they provide benefits for you and your family members' injuries that occur in your own covered car, in cars you don't own, and as pedestrians. Despite all of this protection, the cost for this coverage is reasonable compared to liability coverage and physical damage coverage for your own car.

If you have additonal questions or would like for Southwest Business Insurance to review your coverage email Chris Baumli at cbaumli@sbcia.com or call us at 512-338-0100 and ask to speak to one of our insurance counselors.

Labels: , , ,

Powered by Blogger