Rental Car Damage Waiver

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As agents we are often asked a number of difficult questions relating to auto insurance coverage and how the coverage will respond in various situations.  One of the most frequent questions we receive is in regards to purchasing the collision damage waiver when renting a car.
You know the routine. You just got off of the plane for your vacation.  You’re ready to go hit the beach, but first you have to go through the dreaded conversation at the rental car desk.
“Would you like to upgrade to a bigger car?”
“Don’t need it.”
“Would you like to rent a GPS system?”
“Brought my own, thanks.”
Now, the biggie:  “Would you like to pay for the collision damage waiver?”
Before you quickly reject this one as well, we want to give you 5 reasons below on why you should strongly consider purchasing the collision damage waiver the next time you rent a car.
1.    Loss Valuation and Settlement. Did you know most rental agreements allow the rental car company to determine the value of the vehicle solely at its discretion if you are involved in a claim?
So if you are in an accident that totals a vehicle that is a few years old, the rental car company can still charge for a brand new vehicle.   A standard auto insurance policy only pays “Actual Cash Value” of the vehicle, which means you will be stuck with the difference in value.
2.    Indirect Losses.  If there is an accident you will most likely also be responsible for the loss of rental income incurred by the company while the damaged vehicle cannot be used.   And, while many auto policies will provide some coverage for this, there have been many cases where individuals are still charged thousands of dollars above what their insurance company would pay for.
3.    Administrative Fees.  If you damage a vehicle, there is a good possibility the rental car company will add additional charges for expenses such as towing, storage, and claims adjustment calling them “administrative fees”.   Your insurance policy will not provide coverage for these expenses, either.
4.    Diminution of Value.  This is another fee the rental car company can add on if the damage to the vehicle is over a certain amount.   For example, if a rented vehicle sustains more than $1,000 damage, many companies will charge an additional percentage fee (typically 25%) because they figure the sustained damage has now decreased the value of the car and their ability to sell it.   Your auto policy isn’t picking up this fee.
5.    Loss Payment.   If you happen to damage a vehicle, it is common for the rental car company to immediately charge your credit card for the damage to the vehicle.  This can create a huge mess as could potentially max out your credit card. This can create some real headaches with your insurance company.
One of the provisions within your policy is that the insurance company needs to be able to inspect the vehicle so they can accurately calculate a damage amount.  However, the rental car company may not wait for an adjuster, and it is common for them to charge your credit card and begin repairs immediately.
The problem is that the provision within your insurance policy mentioned above may actually give your auto insurance company the right to deny the claim as they were not allowed to properly inspect the vehicle.
Between just the fees associated with damaging a vehicle, the valuation process, and payment mess, you can see how you could easily be out thousands of dollars.   By not signing the waiver, you may potentially be setting yourself up for some huge personal expenses.
Recommendation:  We know you don’t want to pay more money for the waiver, but believe us, if you happen to damage a rented vehicle, you’re life will be a thousand times easier than if you hadn’t signed and paid for it.
Also, please double check to see how your own insurance policy will react to some of the claims scenarios above.
Disclaimer: The above information is to be used as guidance only, and it is not to be considered as definite in any particular case.   Every policy is different and you need to read through your policy and consult with your agent to best determine how your coverage will respond.  The information provided is based on the ISO standard Personal Auto Policy in force in most states. Policy provisions and laws vary from state to state and they can change at any time.  Due to the brevity of this article, we cannot analyze every possible loss exposure and exception to the general guidelines above.
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Insurance Cancellation vs. Non-renewal

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There’s a difference between an insurance company canceling a policy and choosing not to renew it.
Auto insurance cancellation
Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:

  • You fail to pay the premium
  • You have committed fraud or made serious misrepresentations on your application
  • Your drivers license has been revoked or suspended.

Auto insurance non-renewal
Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days notice and explain the reason for not renewing before it drops your policy (the exact timeframes and rules will depend on the state in which you live).
There are a number of reasons an insurance company may choose not to renew a policy, and it may have nothing to do with you personally. For example, your insurer may have decided to drop that particular type of insurance or to write fewer policies where you live.
However, a nonrenewal can also be due to your record or your actions. Doing something to considerably raise the insurance company’s risk—like driving drunk—would be cause for non-renewal.

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Tips for Driving in the Rain

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Nearly half (46%) of all weather-related car accidents — more than 700,000 a year — are due to rain.1 As we experience more soggy weather, it’s imperative that all drivers are schooled on how they can safely maneuver their vehicle and avoid weather-related auto accidents, which often cause car insurance rates to rise.
Here are some tips for driving in the rain:
  1. Exercise caution when rain follows hot, dry spells. Engine oil and grease build-up on roads and highways over time, and when combined with precipitation, you’ve got the equivalent of an automotive Slip ‘N Slide. Road conditions may improve after the season’s first rain washes away most of the grime, but you’ll need to still exercise caution when driving in the rain.
  2. Slow down. Wet pavement causes tires to lose traction and vehicles become more difficult to handle.
  3. Avoid standing water on roadways. Not only can you hydroplane and lose control, but you can impair your vision and other drivers’ visibility by splashing through puddles. Moreover, standing water often shields potholes and debris from view and it can reduce the effectiveness of your vehicle’s brakes.
  4. Drive in the tracks of the car in front of you. This allows the vehicle ahead to displace any standing water that’s on the road.
  5. Increase your following distance. Slick roads, wet brakes and reduced visibility can lead to collisions. Give other vehicles plenty of room and brake early with reduced force.
  6. If your car begins to hydroplane, do not brake or turn the wheel abruptly as this may cause your vehicle to go into a skid or spin. Take your foot off the gas and keep the wheel straight until your car reclaims traction. Brake gently if needed.
  7. Don’t use cruise control. It can cause your car to accelerate when hydroplaning and reduces driver attentiveness.
  8. Grip the steering wheel with both hands to maximize vehicle control. This means putting down your cell phone (remember, texting while driving is still illegal in 35 states) coffee, makeup, shaver, sandwich or anything else that takes your hands off the wheel and eyes away from the road.
  9. Keep your windshield wipers in tip-top shape. Winter cold can wreak havoc on your blades, so get them checked before rainy seasons arrive.
  10. Defog your windows. Precipitation can cause your windshield to quickly fog up, so use the front and rear defrosters to maximize visibility.
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Choosing an Insurance Deductible

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In order to determine exactly how much car insurance you can afford, you need to understand what a deductible is and how it works. When buying car insurance, you must consider both the premium and your deductible when determining your budget for coverage.

What Is a Car Insurance Deductible?

Definition

A deductible is the amount of money that you are required to pay out of pocket before your expenses are paid on a claim.
When you have an accident, your car insurance company will pay for damages up to the limit of your policy. Regardless of how serious how the accident is, you will only need to pay your auto deductible.
NOTE: Keep in mind deductibles do not apply to liability auto insurance coverage, as that pays for damages incurred by another driver when you cause an accident. Rather, it would apply to coverage types that pay your damages, such as collision or comprehensive coverage.

Subrogation and Your Car Insurance Deductible

If you are involved in an accident with another driver and fault is not immediately clear, you may be advised to file a claim with your own auto insurance company in order to get your expenses paid sooner.
If, after the accident investigation, it’s determined that the other driver caused the accident, your insurer will generally try to get back the money they paid on your claim. This is called subrogation.
If your car insurance company successfully recovers the money paid for your claim, they may reimburse you for your deductible.

Choosing Your Deductible: Low vs. High

If you’re on a tight budget, you may consider lowering your auto insurance payment by increasing your deductible. However, this is one cost-cutting measure that may not always be in your best interests.
It’s true that a higher deductible will result in slightly lower monthly car insurance premiums; however, you need to realistically assess how much you’ll be able to pay if you do get into an accident. Remember, car accidents can happen at any time, so you must determine whether your current budget would allow for payment of a very high deductible.
If you don’t have easy access to these funds in your emergency savings, you may have to resort to measures such as a high interest personal loan or a cash advance on your credit card. In all likelihood, both options would cost you more than you’d save on your premium.
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RV Insurance: The Basics

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RV insurance protects your motorhome, travel trailer, camper, fifth wheel, etc. You can choose from a variety of coverages meant to protect your vehicle and provide peace of mind on trips and vacations or if you use your RV as a permanent residence. If you’re driving a motorhome, you’ll also need liability coverage to stay legal on the road.
How does RV insurance work?
When you buy RV insurance, your agent will ask simple questions about you, your RV, and how often you use it. You’ll then select coverages that will best protect you and your vehicle. If you damage your vehicle or you’re responsible for someone else’s damages or injuries, you’ll file a claim with your insurer. If your claim is covered, they’ll pay for the losses or injuries up to your coverage limits.
Do I need motorhome insurance?
Yes. You must have at least the state minimum for liability, since motorhomes are driven and not towed. When quoting motorhome insurance, all insurers will let you know the minimum requirements in your state. Failure to carry liability insurance could result in a revoked license, fines, or even jail time.
Do I need travel trailer insurance?
Because you’re not actually driving your travel trailer, you aren’t required by law to have insurance on a vehicle that you tow with a car or truck. However, your travel trailer is often a valuable asset, and should be protected the same way you insure your home, car, etc.
Most travel trailer policies include comprehensive coverage. It’s up to you if you want to add collision, but most financers will require you to carry both.

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Tips for a Safer Commute

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Morning roadways can get busy: The U.S. Census Bureau says 86 percent of American workers drive themselves to their job. If this includes you, stay cautious with these tips for commuting to work safely.
  • Leave early. According to the Governors Highway Safety Association, speeding plays a role in approximately one-third of traffic deaths. If you have a long commute, build a few extra minutes into your schedule so you can stick to the speed limit and accommodate for heavy traffic. And stay alert throughout the drive — even if it’s a familiar commute. Be prepared for your exits, make lane changes early so you’re in the correct turning lane and listen to traffic reports to be prepared for situations that could cause delays.

  • Wear appropriate footwear. Your shoes could affect your ability to control your car in some situations. Open-heel shoes can slip off and wedge under pedals, while high heels can catch on floor mats, delaying acceleration or braking. Wear sneakers or low-heel shoes while driving — and slip on your work shoes once you’ve arrived.

  • Drive distraction-free. Avoid anything that takes your hands off the wheel, your eyes off the road and your mind off driving. This includes using your cell phone (even hands-free devices), grooming, changing radio stations and other common distractions.

  • Avoid aggressive driving. Mornings can sometimes be stressful. Add a busy roadway, and that can compound. Be cautious to curb your road rage and avoid becoming the target of an aggressive driver.
  • Shield against harsh sunlight. Morning and evening commutes sometimes coincide with sunrise or sunset. In addition to using the car’s sun visor, wear a pair of polarized sunglasses and keep your windshield clean to maximize visibility. Also reduce your speed, leave extra space between you and the car ahead of you and turn your headlights on so other drivers can see you better.
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7 Factors Affecting Your Auto Insurance

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1. Your Coverage And Deductibles

Car insurance providers allow you to choose your deductible and decide whether to add additional coverage that isn’t necessarily required by the laws in your state. The specifics of your coverage and deductibles play a major role in your monthly payment.
Additional coverage gives you added financial protection, depending on the claim, but will also add to your monthly costs. Remember that while adjusting your deductible will affect your premiums, the differences in premiums are usually very small.

2. What You Drive

Some insurers increase premiums for cars more susceptible to damage, occupant injury, or theft, and lower rates for those that fare better than the norm.
Some SUVs, for example, rate highly in terms of driver protection and passenger protection, which means discounts on insurance. While some small cars will cost more because of their lower-than-average safety ratings and desirability to car thieves make them more expensive to insure.

3. How Often, And How Far, You Drive

People who use their car for business and long-distance commuting normally pay more than those who drive less. The more miles you drive in a year, the higher the chances of an accident – regardless of how safe a driver you are. If you reduce your total annual driving mileage enough, you may lower your premiums.

4. Where You Live

Generally, due to higher rates of vandalism, theft, and accidents, urban drivers pay more for car insurance than do those in small towns or rural areas.

5. Your Driving Record

Drivers who cause accidents generally must pay more than those who are accident-free for several years.
And even though you can’t rewrite your driving history, having an accident on your record can be an important reminder always to drive with caution and care. As time goes on, the effect of past accidents on your premiums will decrease.

6. Your Credit History

It has been shown certain credit information helps predict future insurance claims. Where applicable, many insurance companies use credit history to help determine the cost of car insurance. Maintaining good credit can have a positive impact on the cost of your car insurance.

7. Your Age, Sex, And Marital Status

Accident rates are higher for all drivers under age 25, especially young males and single males. Insurance prices in most states reflect these differences.
If you’re a student, you might also be in line for a discount. Most car insurers provide discounts to student-drivers who maintain good grades. In some states, younger drivers are also able to take driver safety courses that will lower premiums.
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Infographic: New Year's Resolutions

New Year’s Eve has always been a time for looking back to the past, and more importantly, forward to the coming year. It’s a time to reflect on the changes we want (or need) to make and resolve to follow through on those changes.
Unfortunately, while most New Year’s resolutions are made with vigor and hope, most people don’t make it past the first month with their resolutions.
With the following infographic, we wanted to take a look at the most common New Year’s resolutions, how likely they are to be abandoned, and what you can do to stick to your goals.
For example, did you know that happiness affects your ability to keep your resolutions?  Or that smaller, more manageable resolutions have a much higher chance for success?
Please take a few moments to explore the attached infographic to hopefully find a little insight and/or inspiration as you are setting your own goals for the New Year.

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Inforgraphic: A Visual History of Thanksgiving

Thanksgiving is one of the biggest holidays of the year in the United States. It’s an opportunity to gather with family and friends to celebrate, give thanks, and even watch a little football.
The Thanksgiving holiday has an interesting history and several intriguing facts surrounding it. For example, did you know that the government officials tried to make Thanksgiving an official holiday in both 1630 and 1789, but that it didn’t catch on as a holiday until President Lincoln officially made it one in 1863?
Please take a look at the attached infographic that provides a great breakdown on the history of this holiday, including food consumption, parade attendance, and the real reason why we play so much football on Thanksgiving.
We hope that you have a fantastic Thanksgiving with friends and family.

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Infographic: Top 5 Travel Nightmares

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As the summer comes to a close, many families use August for planned vacations.  However, lost luggage, a stolen cell phone, or a misplaced wallet or purse can quickly turn your dream vacation into a nightmare.
For example, did you know that over 3,000 luggage bags are lost every MINUTE or that cell phone thefts now account for 40% of all theft in every major U.S. city?
It is with these items in mind that we have compiled an infographic of the 5 most common vacation nightmares and tips on how you and your family can avoid them.
Have a great summer!
Click on the image below to view the full size version.

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