CAR RENTAL INSURANCE
Spring/Summer 2006
When you rent a car in the United States, a common question asked by the car rental company is whether or not you would like to purchase insurance for the rental vehicle. You will likely be told, in hard sell fashion, that for a few dollars per day if you have any type of accident, you will be completely covered by this additional insurance. That if you do not make this "prudent" purchase and something happens to the car, you are responsible.
This additional insurance coverage is not offered to you because the car rental company cares about you or even the vehicle you are renting. This coverage is offered primarily because it is a money maker for the car rental company. Conversely, it is most commonly a money loser for the customer. This is because if you are in an accident with your rental vehicle, your own personal car insurance company is primary for coverage purposes. That means any claim goes through your insurance company first until its limits are exhausted. Then and only then, would it reach the second tier of that additional insurance you purchased. Therefore, unless your own car insurance coverage is minimal, insufficient or non-existent, you are not likely to avail yourself to that "all important" additional insurance you were told that you had to have in order to protect yourself.
This additional insurance coverage is not offered to you because the car rental company cares about you or even the vehicle you are renting. This coverage is offered primarily because it is a money maker for the car rental company. Conversely, it is most commonly a money loser for the customer. This is because if you are in an accident with your rental vehicle, your own personal car insurance company is primary for coverage purposes. That means any claim goes through your insurance company first until its limits are exhausted. Then and only then, would it reach the second tier of that additional insurance you purchased. Therefore, unless your own car insurance coverage is minimal, insufficient or non-existent, you are not likely to avail yourself to that "all important" additional insurance you were told that you had to have in order to protect yourself.
PROPERTY DAMAGE PAYMENT
AFTER AN AUTOMOBILE ACCIDENT
Fall/Winter 2006
When one sustains property damage to their vehicle from an automobile accident, the most common inquiry that arises is as to who will pay for the vehicle repairs. The answer depends on the circumstances and insurance coverage provisions.
If your insurance policy provides collision coverage, then you have the option of going through your own company for the vehicle repairs. In such a case, your insurance company will appraise the damage to your vehicle and pay the cost of repair or book value of your vehicle, whichever is lesser, regardless of who is at fault for the accident. This payment is reduced by an amount equal to your deductible. After payment is made, your insurance company will seek reimbursement from the tortfeasor's insurance company through inter-company arbitration. If your company is successful in getting reimbursed, then they will reimburse you for all or part of your deductible amount, depending on the liability scenario.
If you do not want to utilize your own insurance company or do not want to lay out the deductible amount for the repairs, you may choose to seek property damage payment from the tortfeasor's insurance company. If this is what you choose, then you do not have to lay out the deductible amount because you are not going through your own policy. However, payment by the tortfeasor's carrier is contingent on liability. In other words, any payment that is made will be proportionately reduced by the percentage of fault attributable to you for the happening of the accident. The foregoing, therefore begs the question as to which company should you choose.
In general, assuming you have collision coverage, we recommend for tactical and claim preservation purposes, use of your own insurance company for payment of your vehicle's property damage. However, if a client does not have collision coverage or due to financial hardship cannot afford to pay their deductible, then using their own insurance company may not be a realistic option. In these cases, we at least like to have a liability scenario that is at or near 100% in your favor and property damage to your vehicle that is extensive and highly visible. Either way, it is imperative that you choose an appropriate body shop that can handle both the repairs and the insurance aspect of your claim. If you need us to recommend a body shop, please do not hesitate to contact our office.
We wish all of you a safe and happy Holiday Season with peace and love throughout 2007.
If your insurance policy provides collision coverage, then you have the option of going through your own company for the vehicle repairs. In such a case, your insurance company will appraise the damage to your vehicle and pay the cost of repair or book value of your vehicle, whichever is lesser, regardless of who is at fault for the accident. This payment is reduced by an amount equal to your deductible. After payment is made, your insurance company will seek reimbursement from the tortfeasor's insurance company through inter-company arbitration. If your company is successful in getting reimbursed, then they will reimburse you for all or part of your deductible amount, depending on the liability scenario.
If you do not want to utilize your own insurance company or do not want to lay out the deductible amount for the repairs, you may choose to seek property damage payment from the tortfeasor's insurance company. If this is what you choose, then you do not have to lay out the deductible amount because you are not going through your own policy. However, payment by the tortfeasor's carrier is contingent on liability. In other words, any payment that is made will be proportionately reduced by the percentage of fault attributable to you for the happening of the accident. The foregoing, therefore begs the question as to which company should you choose.
In general, assuming you have collision coverage, we recommend for tactical and claim preservation purposes, use of your own insurance company for payment of your vehicle's property damage. However, if a client does not have collision coverage or due to financial hardship cannot afford to pay their deductible, then using their own insurance company may not be a realistic option. In these cases, we at least like to have a liability scenario that is at or near 100% in your favor and property damage to your vehicle that is extensive and highly visible. Either way, it is imperative that you choose an appropriate body shop that can handle both the repairs and the insurance aspect of your claim. If you need us to recommend a body shop, please do not hesitate to contact our office.
We wish all of you a safe and happy Holiday Season with peace and love throughout 2007.