Information about car, auto, motor and lorry insurance
Car Insurance : all you have ever wanted to know and even more. Find out !
Insurance for vehicle damage
Alright, we have talked about personal injuries, but what about vehicle damage ? As you may or may not have heard or read, there are several types of vehicle damage coverages possible : usually depending on the value, condition and age of your vehicle. Insurers usually split the coverages in two definitiions : collission insurance and comprehensive insurance.
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)
Collision Coverage
Choosing the best deductibles
About deductible and insurance
The official explanation of deductible in the insurance business is “amount of loss that insured pays in a claim; includes the following types:
1. Absolute dollar amount : Amount the insured must pay before the insurance company will pay, up to the limits of the insurance policy. The higher the absolute dollar amount, the lower the premium of the policy;
2. Time period amount (elimination period/waiting period) : Length of time the insured must wait before any benefit payments are made by the insurance company. In disability income policies it is common to have a waiting period of 30 days during which nog income benefits are paid to the insured. The longer this time period, the lower the premium. The consumer would be well advised to select the highest deductible that he or she can afford. First dollar coverages are very costly. A high deductible allows the insured to self-insure expected losses - those of high frequency and low severity. (source: Dictionary of Insurance Terms)
Comprehensive coverage
This coverage is subject to a front-end co payment on your part, called a deductible. When you are in a crash, you have to pay that deductible, sometimes called your ‘own-ris’.
Collision coverage covers damage from colliding with another object (for example a vehicle, post or curb), regardless of fault.
Comprehensive coverage (also known as Other Than collision) coverage, covering most other kinds of accidental damage to the vehicle, such as fire, theft, vandalism, glass breakage, hitting a deer, wind or hail
An average person has a claim for damage to his or her vehicle every four or five years. You could choose a higher deductible if the extra risk (the difference in deductibles) can be recouped through premium savings within a reasonable time (four to five years), a so called pay back period.
