Rental Car Insurance: The Basics

Safe Car Insurance

When renting a car, combing through the fine print of insurance coverage options can be daunting and, let’s face it, not all that stimulating. It’s not as exciting as choosing between a flashy convertible, a sensible compact or the seven-seat mammoth SUV.

You may ask yourself: Do I even need to buy coverage? Won’t my auto insurance cover an accident? What about those credit card benefits for car rentals?

Before you drive your rental car off the lot or book from a car share service, here are a few basics you need to know.

Do I need to buy additional rental Car Insurance?

You may want to opt into rental car coverage if you don’t have collision coverage or if you don’t have your own auto insurance policy. It’s most beneficial to purchase the rental policy if it doesn’t duplicate the auto coverage you already have.

Rental car insurance can cost up to $50 per day, depending on the level of coverage you choose. There are usually four types of coverage available when you rent a car:

A loss-damage waiver, also known as a collision damage waiver, covers you for liability if a car is damaged while you’re renting it. This coverage usually costs anywhere from $9 to $19 per day, but this varies by state, vehicle and rate. For example, if you purchase a collision damage waiver from Alamo, the cost is around $23.99 per day, while Hertz offers its loss-damage waiver for around $38.95 and a collision damage waiver for $29.95. If you’re using your own insurance, your policy may not cover the full value of the vehicle you’ve rented, so you may need a loss-damage waiver. In addition, without a loss-damage waiver, the auto rental company could charge you for loss of use during repairs as well as any towing charges. If your primary insurer does not cover these, you’ll need the waiver.

Liability coverage encompasses damage to any property as well as medical expenses for passengers in another vehicle if you’re in a collision. Protection is usually capped at $1 million and may cost about $7 to $15 a day. If you use your own insurance, find out how much liability coverage it provides specifically for rentals. If you don’t have an umbrella policy or the rental’s coverage limit is higher, you’ll be safest with the additional liability protection.

Personal accident insurance covers medical costs for you and your passengers in the event of an accident and typically costs around $1 to $5 per day. Even if you already have health insurance, there may be gaps, such as deductibles, that could leave you with higher medical costs after an accident.

Personal effects covers valuables you keep in the car in case of theft and costs about $1 to $4 per day. Even if you have auto insurance, it won’t cover what’s inside the car, so you’ll need extra protection.

What do popular car share services cover?

Popular car share services such as ZipCar, Relay Rides, GetAround and Car2Go each provide members with insurance. If you want additional protection, check with your insurer or car issuer for their policies on car share services.

1. Zipcar is the world’s largest car sharing service, in which members can choose from a variety of vehicles and pick up their booking at designated locations. It offers comprehensive collision coverage and personal injury protection. It also offers liability coverage of $300,000 per accident. Members are responsible for a $750 damage fee per incident, which can be reduced with an optional damage fee waiver.

2. Relay Rides is a peer-to-peer car sharing service available in more than 2,100 cities and 300 airports throughout the United States. It offers three supplemental protection options for renters. The options range from a plan that limits your collision exposure to $500 and gives you $300,000 in liability coverage, to one that offers no vehicle damage protection and only state minimum liability coverage.

3. GetAround is another peer-to-peer car sharing service, available only in the San Francisco Bay Area, San Diego, Austin, Portland and Chicago. It gives renters liability coverage up to the limits carried by the vehicle owner or a combined single limit of three times the state minimum, whichever is greater. The company also offers personal injury protection (in states where it is mandated), comprehensive/collision coverage, supplementary medical payments coverage and uninsured and underinsured motorist coverage (in states where it is mandated).

4. Car2Go is a one-way point-to-point smart car rental service. Unlike ZipCar, it enables its customers to access cars wherever they are parked using a smartphone app. It provides liability insurance, uninsured motorist coverage and collision and comprehensive coverage with varying limits and deductibles, according to state. Personal injury protection is offered on a state-by-state basis.

What does auto insurance typically cover?

If you already have an auto insurance policy, you’re usually covered with a traditional rental too. If you don’t own a car and don’t have car insurance, it’s possible to get non-owners auto insurance. Inquire with your standard insurance provider, such as your homeowners insurer, to see what coverage may be available.

If you do have auto insurance that covers a rental, it likely will provide collision and theft or vandalism coverage. Liability usually works the same in a rental car-related claim as if you were driving your regular car. If an accident does happen, make sure to file your insurance claim just as you would if you were driving your primary vehicle.

Your primary policy will likely not cover loss of use, loss of value or other rental fees. Also, most auto insurers won’t cover an accident if you’re using the car for business purposes or driving overseas. Also, if an accident happens while someone else is driving a car you rented under your name, and that person is not listed on the rental car agreement, your claim may be denied. For example, PEMCO explicitly states unless the driver was listed on the policy—not just given arbitrary “permission”—the company won’t provide coverage. The company also will not cover for business purposes or driving overseas.

What can credit cards cover?

You can also use your credit card for secondary rental insurance—and in some cases for primary—to provide coverage that surpasses what your primary auto insurer or a rental company can offer.

If your card offers rental car insurance, it will usually pay for the costs of damages not covered by your regular car insurance policy. In order to receive coverage under your credit card, you have to book the rental car under your name with a credit card with a matching name. Typically you have to refuse coverage offered by the rental car agency to receive insurance coverage from your credit card.

Here are what the most popular card networks cover:

1. Visa offers rental car insurance on all of their cards, but limits their rental car period to 15 days domestically. It includes physical damage, theft and loss of use. To qualify for loss of use, however, the rental company must prove the fleet is fully utilized, meaning most of its cars are in use. It does not cover injury, property damage, taxes, damage to other vehicles, diminished value or tire wear and tear.

2. MasterCard only offers car rental insurance on Platinum, Gold, World and World Elite cards. The rental period is limited to 31 consecutive days and the maximum coverage is $50,000. MasterCard covers the same events and has the same exclusions as Visa.

3. American Express offers free secondary coverage up to $50,000 on all of its basic cards, which covers physical damage and theft. Platinum card holders can also receive coverage up to $75,000 for car rental loss and damage insurance. Basic coverage does not include diminished value, taxes, wear and tear, property damage or injury. Cardholders must decline full rental car insurance, but can accept partial coverage. It also offers primary coverage for a small fee, which adds on property damage and injury as well as an increased coverage of $100,000.

4. Discover limits its coverage to a few of its cards. Most cover collision damage only up to $25,000, though the Discover Escape card covers up to $50,000. It does not cover theft, any damage not due to a collision or loss of use.

Some cards vary what the issuer will and won’t cover, so make sure to review your card’s rental collision policy or contact your issuer prior to renting. Additionally, card networks may exclude protection for certain vehicles.

To avoid last-minute uncertainty when you’re standing at the rental counter, do your research beforehand about different rental companies. Then consult your own auto policy or contact your credit card issuer to find out what sort of coverage may be available to fill any gaps.

Source: http://www.nerdwallet.com/blog/insurance/2014/10/29/rental-car-insurance-2/

Do You Need To Buy Rental-Car Insurance?

Wheel Insurance Need

However, as you’re signing for the car, the clerk behind the counter asks: “Would you like the added insurance? Otherwise, you’ll be liable for the car.” You freeze, your tired mind wondering what that even means. “I’m insured on this,” you think. But are you? Do you get the added liability coverage or stick with your own insurance? There isn’t one simple answer.

“When you get to that desk, that’s the last place you want to make that decision,” says Steve Kee of the Insurance Bureau of Canada. Kee says that getting as much information about your own insurance before you go to the rental office is key to both protecting yourself and saving money, because the onus lies with the renter to ensure coverage for any claims. Whatever coverage you have is not necessarily the same as that of someone else.

“You want to check your limits and, again, some people’s insurance is fine,” says Kee. “Sometimes [with] a credit card, you need to check what the policy will include; does it include third-party liability? Not every card, not every situation will be the same.”

For example, say you have just basic Car Insurance on an older beater; that’s the coverage you’ll have on the rental if you decline the added agreement. If you have an at-fault accident in the rental, you’re on the hook for repairs to the vehicle or, in a worst-case scenario, the cost of the car at its present-day value. It’s a good bet that rental is newer and more expensive than your car is.

Insurance and liability coverage rates vary not just by company, but also by region. Rates for a car rented in Toronto, regardless of where you drive it, is different than say, in Chicago. That’s because repair costs are different from region to region. As well, some companies have added fees in the event of an accident; National Car Rental, Alamo Rent A Car and Enterprise Rent-A-Car (all owned by the same company) will charge a rental fee for a damaged car for every day it’s in a repair shop. Does your car insurance or credit card cover that? Those fees are waived if you purchase the rental company’s “collision damage waiver” – which is not so much insurance as it is an agreement between renter and the company that says, if the car is damaged or stolen, the renter won’t be liable.

Stephen Menon advocates getting the facts before renting, but his focus is on credit cards. He’s the associate vice-president for consumer card products at Toronto-Dominion Bank.

“Typically, car rental, collision, loss and damage insurance is available on our platinum or premium products, those with annual fees,” says Menon. “You can check online for the terms and conditions for your card ... Or, simply give us a call from the number on the back of your card, or come into a branch, and we can walk you through your coverage.”

Calling is important because, again, there are stipulations on the coverage that you may not think about.

“There are certain countries that are bound to be excluded, for various reasons,” Menon says. “Also, exotic cars may not be covered, so it’s important to check the terms of your card to understand the coverage you have. But with the typical car rental, you should be covered.”

If you need to rent a large van or truck, chances are good your Car Insurance doesn’t cover larger commercial vehicles. U-Haul offers an agreement that not only covers the truck itself but also the contents. It won’t, however, cover a motorized vehicle you may be towing.

Generally, you won’t pay a deductible for rental company coverage, but that’s important to check. And having rental coverage isn’t a free pass to have an accident, either. A serious crash, one that has to be reported to the police, will affect your insurance rates, as it will be reflected on your driving record at renewal time – just as it would if you got a speeding ticket in a rental.

Ultimately, you are responsible for the car you rent, whether you use your own vehicle insurance, credit card or the rental company’s supplementary insurance.

“It’s important for people to make that first call to your insurance company, to find out if everything would be okay,” says Kee. “An extra 10-minute phone call can save you a heck of a lot of frustration.”

Source: http://www.theglobeandmail.com/globe-drive/culture/commuting/do-you-need-to-buy-rental-car-insurance/article21366347/

Mercury General Corporation Announces Agreement to Acquire Workmen's Auto Insurance CompanyAuto Insurance

Auto Insurance

Mercury General Corporation (NYSE-MCY) announced today that it has entered into a definitive agreement for the purchase of Workmen's Auto Insurance Company ("Workmen's"), subject to regulatory approval. The purchase price is $8 million and the transaction is expected to close during the first quarter of 2015.

Workmen's is a Los Angeles based auto insurance company specializing in underwriting non-standard personal Auto Insurance, predominantly in California. At June 30, 2014, Workmen's reported statutory surplus of $9.2 million. Net premiums earned for the year-ended December 31, 2013 were $34.3 million and for the six-month period ended June 30, 2014 were $15.1 million.

Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent producers in many states. For more information, visit the Company's website at http://www.mercuryinsurance.com.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the demand for the Company's insurance products, inflation and general economic conditions, including general market risks associated with the Company's investment portfolio; the accuracy and adequacy of the Company's pricing methodologies; catastrophes in the markets served by the Company; uncertainties related to estimates, assumptions and projections generally; the possibility that actual loss experience may vary adversely from the actuarial estimates made to determine the Company's loss reserves in general; the Company's ability to obtain and the timing of the approval of premium rate changes for insurance policies issued in states where the Company operates; legislation adverse to the automobile insurance industry or business generally that may be enacted in the states where the Company operates; the Company's success in managing its business in non-California states; the presence of competitors with greater financial resources and the impact of competitive pricing and marketing efforts; changes in driving patterns and loss trends; acts of war and terrorist activities; court decisions and trends in litigation and health care and auto repair costs and marketing efforts; and legal, regulatory and litigation risks. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see the Company's filings with the Securities and Exchange Commission.

Source: http://www.prnewswire.com/news-releases/mercury-general-corporation-announces-agreement-to-acquire-workmens-auto-insurance-company-435202698.html

California Homeowners Insurance Ideal to meet Additional Expenses during A Disaster

Homeowners Insurance

California Homeowners Insurance protects your house as well as some belongings from any natural or man-made disaster. Usually natural disasters caused by floods, earthquakes, tornados, hurricanes and inadequate maintenance are not covered by this kind of insurance policy. For this, you have to opt for a separate policy.

California Homeowners Insurance is ideal to get financial support during destruction caused by fire, medical help for a guest, or burglary. This insurance policy package helps to save your hard-earned money from getting wasted to meet expenses of buying necessary goods. Many U.S. families do not have much money to spend during an unexpected damage. By going for homeowners insurance, you can easily and tension-freely meet all kinds of additional expenses without using money kept in your bank account.

There may be an accident when a guest falls down and seriously injuries his or her body parts. Medical/health coverage in the California Homeowners Insurance will help you effectively tackle the situation and give the guest the best possible medical attention and care. With this insurance, it will be easier for you to pay the medical bills without any problem.

Stealing of valuables may cost you a fortune. It is thus necessary to opt for homeowners insurance to get financial help at times of a burglary or vandalism caused by unruly kids. Independent Group Agency is a notable organization having the names and contact details of all good insurance companies of California. You can either ask for a free quote or visit their website at Igainsurance.com to find out more about California Homeowners Insurance.