Information about car, auto, motor and lorry insurance
Car Insurance : all you have ever wanted to know and even more. Find out !
Company cars & rental cars and insurance
To make things even more complicated insurers have a different set of rules for company cars & rental cars and be very careful, because if you are driving a company car or a rental car and you are involved in a car accident you could face some unpleasant surprises. Read all about company cars and rental cars and insurance in the following sections.
Americans have a love affair with cars, and since Americans own more cars per capita than any country in the world, a good place to begin examining insurance risks is to look at those associated with the ownership, maintenance, and use of our beloved PTV (personal transportation vehicle). Unless you walk around with a loaded gun in your pocket, an automobile represents the most dangerous device you own. In one split second, you can experience lawsuits, death, long-term disability, major medical expenses, and major property darnage ! Pretty scary stuff! (source: Insurance for Dummies).
Americans and their cars
An accident is an unexpected, unforeseen event not under the control of the insured and resulting in a loss. The insured cannot purposefully cause the loss to happen; the loss must be due to pure chance according to the odds of the laws of probability. For example, under a PERSONAL AUTOMOBILE POLICY (PAP) if an accident occurs, the insured is covered for loss due to his/her negligent act or omissions resulting in bodily injury or property damage to another party (source : Dictionary of Insurance Terms)
What is an accident ?
Insurance and car rental
Renting a car, whether for business or for pleasure, puts you face-to-face with risks that your Personal Auto policy sometimes does not cover. Here are the four main sources of liability you face when renting a car:
• You have direct liability for injuries or property damage that you cause to others while operating the rental car. If you run a red light and injure others or damage their vehicle, for
example, you're at fault and responsibIe. No surprises here.
• You are directly liable for damage to the rental car that you cause by your negligent driving. If you run a red light and damage the rental car, for example, you're responsible for the
repair costs.
• You are responsible for damage to the rental car - damage that you did not cause but for which you agreed to be responsible when you signed the rental contract. Every rental contract I have ever looked at makes the renter absolutely liable for all damage regardless of fault! This clause has always been non-negotiable.
This means that you are responsible for damages such as hall damage, someone else running a red light and hitting you, someone vandalizing the car by keying it, or someone hot- whiring the car and stealing it. In short, if you return the car with any darnage at all, you owe. With the cost of new cars today, that could mean more than $25,000 if the car is totaled or stolen.
• You are liable for the loss of revenues the car rental agency suffers as a resuIt of the car being unavailable to rent while being repaired. Again, you will owe this loss-of-revenue regardless of whether you actually caused the damage. You agree to be responsible when you sign the contract.
Here's a tip for the car rental industry: If you want to attract new customers, offer more reasonable contracts. (source: Insurance for Dummies)
Insuring rental cars
What is a BAP ?
Company Cars and Business Auto Policy
When you have a company car you are insured while driving it for your liabililty for injuries and property damage you cause to others by your employers Business Auto Policy (BAP). You are covered when driving other company vehicles as well, and even when driving borrowed or rented vehicles on company business.
4 main sources of liability when renting a car
There are four main sources of liability you face when renting a car, according to Insurance for Dummies by Jack Hungelmann:
Renting a car, whether for business or for pleasure, could be financially dangerous for you if your Personal Auto Policy (PAP) doesn’t offer full coverage.
1. You have direct liability for injuries or property damage that you cause to others while operating the rental car.
2. You are directly liable for damage to the rental car that you cause by your
negligent driving.
3. You are responsible for damage to the rental car - even damage that you did not
cause, but for which you agreed to be responsible when you signed the rental
contract. Almost every rental contract makes the renter absolutely liable for all
damage regardless of fault.
4. You are liable for the loss of revenue the car rental agency suffers as a result of
the car being unavailable to rent while being repared. Read more about non
BUSINESS AUTOMOBILE POLICY (BAP) coverage for automobiles used by a business when a liability judgment arises out of the use of the automobile, or the automobile is subject to damage or destruction. The business can select coverage for any auto in use, whether business, personal, or hired. The policy is organized as follows:
Parts I, II, and Ill-define terms used in the policy, such as auto, accident, insured bodily injury, property damage, territorial limits of coverage.
Part IV LIABILITY INSURANCE-in a liability judgment against the insured business and/or individual, the insurance company will pay the monetary damages up to the limit of the policy. Negligent acts and/or omissions of the insured business and/or individual must arise out of the ownership and operation of a covered auto, subject to specific exclusions.
Part V PHYSICAL DAMAGE INSURANCE~in the event of damage to an auto, the insurance company will pay under one of two categories:
COMPREHENSIVE INSURANCE-damage resulting from fire, explosion, theft, vandalism, malicious mischief, windstorm, hail, earthquake, or flood; or COLLISION INSURANCE-damage resulting from colliding with another object or the overturning of the insured auto.
Part VI CONDITION-stipulate what the policyholder must do in the event of a loss, such as give notice to the insurance company; submit proof of the loss; submit to inpsection of damaged property by the company; cooperate with the company in the event of a liability suit. (source : dictionay of insurence terms by barron’s business guide)
The BAP has been largely replaced by the BUSINESS AUTO COVERAGE FORM.
Insurance for dummies
One of the main sources of this website is the very informative book ‘Insurance for Dummies’ by Jack Hungelmann, Packed with real-life examples, expert author Jack Hungelmann guides the reader through the traps and loopholes of the insurance system. Discover what policy combination is best for your needs and where you may have gaps.Find out how to reduce your risk and your insurance costs. Learn how to make the most of your insurance policies and what to do when there's a crisis. Click on the picture to see the special price for this book and order online