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Car Insurance Issues for Travelers
There are several insurance coverage issues when you drive a
vehicle that you do not own especially when traveling. Here are
some examples:
1. Even if you decide that your predominate means of
transportation for traveling will be by either airplane, train,
or bus, when you finally reach your destination you will
probably want to rent a car.
2. You may know somebody who will let you drive their car
temporarily while you are visiting.
3. You may want to drive to your vacation destination. You have
a perfectly good drivable insured vehicle, but you may still
decide to rent a car before you leave home so you do not put any
additional wear and tear on your own vehicle.
4. You may be an employee who is the custodian of a vehicle you
use everyday that is either owned or leased by your employer and
you want to drive that car on your vacation.
5. You may be required to drive that company owned car on a
business related trip within the scope of your employment.
6. Your employer will pay for you to drive a rental car while
you are within the scope of your employment on a business
related trip.
I cannot tell you in any case whether or not you have insurance
coverage without reading your individual insurance policy with
all of the conditions and exclusions to determine which
insurance coverage is primary, what is supplemental or excess,
and where there is no coverage at all. For example, if you are
an employee on a business trip driving your employer's vehicle
or a rental vehicle within the scope of your employment,
worker's compensation may come into the equation also. However,
I will point out some important things that you should be aware
of that many people overlook and let you know what you need to
ask so you can find out the correct answers from the appropriate
people and also make sure that you have all of the proper
documentation so there is no misunderstanding or confusion.
The best, easiest, fastest and most reliable way to determine
what type of coverage you have on a non-owned or rental vehicle
is to call and ask your insurance company (or agent) or ask your
employer if you are driving a company vehicle. Also, call and
ask your credit card company if you plan to use it to rent a
vehicle. Find out if they offer some type of insurance coverage
when you use their credit card to rent a vehicle and if so,
specifically what type of coverage and what the limits are.
FIRST, for employees driving your employer's vehicles, not all
company vehicles are insured by an insurance company with an
insurance policy. Some company vehicles are Self-Insured.
Employees driving company vehicles need to know because
different rules apply. Your employer should let you know this on
the day they give you the keys, but if they don't you need to
find out. Also, you need to know if your company insures anybody
other than the employee to drive your company car and are you
allowed to drive the company car outside of your state or
outside of the country.
I was an Insurance Claims Adjuster for 17 years in Los Angeles.
All of us adjusters as well as the appraisers and managers drove
company cars. The company made it crystal clear to all of us
that the only people who had permission to drive the company
owned cars were the employees and their spouses. We were allowed
to drive the cars for business and personal reasons including
going on a vacation and we had permission to drive the cars out
of the state of California if we wanted to. Employees did not
have permission to allow their licensed teenage sons or
daughters, nor their friends, neighbors, parents, siblings,
cousins, other relatives or anybody else to drive the company
vehicle.
In summary, as adjusters we had 4 basic responsibilities: 1st
was to confirm or deny coverage. 2nd was to investigate the
claim and determine liability, and how much liability was
attributed to the claimant(s) and how much to the insured. 3rd
was to determine the amount of damages including bodily injuries
and property damage and 4th was to either deny the claim and
prepare for litigation or attempt to negotiate and settle.
If there is no insurance coverage, then the rest is irrelevant.
The driver of a vehicle must have permission from the vehicle
owner to drive a vehicle. The simplest way to illustrate this is
eventhough you may have full insurance coverage on a car you
own, if somebody steals your car, then the car thief gets into
an accident while driving your car, (obviously without your
permission) and causes bodily injuries, death and / or property
damage to a claimant(s), there is no coverage for the car thief
on your insurance policy.
SECOND, for people planning to rent a car, make sure that you
give the names and licenses of all the people who will be
driving the rental vehicle to the Rental Car Company. You are
also normally suppose to let them know if you are planning to
drive the rental car out of the state or out of the country. Do
not assume that when you drive either your own vehicle or a
rental vehicle out of the country that the insurance will
automatically transfer. You may not have any
insurance coverage
once you drive across the boarder into another country. This is
something you need to find out from your insurance company.
There may have been people tell you that your personal car
insurance will automatically transfer to a rental vehicle. This
is not always true. If you look on your insurance policy you may
see the terms "Non-Owned Vehicle" and "Temporary Substitute
Vehicle". Some insurance policies make a clear distinction
between the two. Others make you read the fine print to try to
understand the difference.
Remember to always ask your insurance company if there is
anything that is not clear and you do not understand. Insurance
policies of different carriers are written differently. But in
general, usually what it means is when your vehicle is not
drivable or is not safe to drive, out of service, broken down,
in a repair or body shop, in for servicing or maintenance and
you rent a vehicle as a temporary substitute to replace your own
insured vehicle for a limited time, that is normally when
coverage will transfer from your vehicle to the rental. You
still have to ask if your insurance requires you to rent the
vehicle from a Public Automobile Rental Agency or if you will be
covered and can be reimbursed for renting a vehicle from a
friend. Depending on how your policy is written, it may transfer
the full policy limits or coverage may be reduced down to the
state's minimum liability requirements. Something else very
important to find out is if only liability coverage transfers or
if collision and comprehensive damage also transfers.
So on the other hand, that means coverage may not transfer if
you rent a vehicle while you are on vacation and there is
nothing wrong with your own insured vehicle which is in
perfectly good drivable condition just sitting in your driveway
at home, or your spouse and kids are driving it at home while
you are driving a rental car either on a personal or business
trip. Do you really think your insurance company will be
covering two vehicles for the price of one? Ask them and find
out.
If your own insured vehicle is in good safe drivable condition
and you are planning to rent a car while you are traveling, call
and ask your major credit card company first because you have a
better chance of getting good news from them about rental car
insurance coverage while you are on vacation or traveling on a
business trip. If you use your credit card to pay for your
rental car, there are some major credit card companies that will
provide some type of insurance coverage when you rent a car. In
any case, always call your own insurance company and ask them
what type of coverage, if any do they provide when you rent a
car and under what circumstances and conditions it is
transferred so there is no misunderstanding.
THIRD, if you are visiting friends or relatives while traveling
and they give you permission to drive their vehicle, what you
still need to find out is whether the same coverage limits
transfer to a driver other than the named insured or does the
coverage get reduced down to the state's minimum liability
coverage requirements if for example, a friend of the insured is
the driver.
Do not be intimidated by the long list of exclusions under the
Medical Payments Coverage. Commonly known as Med Pay, it applies
to injuries sustained by the occupants of an insured vehicle
which includes the insured driver and all passengers regardless
of liability. It only pays for "Special Damages" like medical
and dental bills but it does not pay for "General Damages" like
pain and suffering.
You may be covered for Med Pay even if you are a driver or a
passenger in a qualified non-owned vehicle. So this is
definitely something you need to find out from both your own
insurance company and the insurance company of the vehicle you
are in. Maybe one could be primary while the other is
supplemental or excess. Just be aware that there are rules
limiting and rules against duplication of coverage. Med Pay
could be worth several thousands of dollars toward your medical
expenses.
Now do you want to know the inside scoop behind the secret walls
of an insurance claims office? No matter how much you may think
that you do not have coverage for something, always ask.
Especially in unique unusual circumstances I have personally
witnessed fierce arguments between adjusters, supervisors and
managers over whether or not to confirm or to deny coverage.
Think about it, if you put a defense attorney and a claimant
attorney in the same room with the same case or 2 different
United States Supreme Court Judges in the same room with the
same case, you could get 2 totally different opinions. That is
why you should always ask and take action before the statute of
limitations runs because you might financially benefit from
somebody's mistake.
About the author:
Stephanie Gibbs created http://www.travelcheaphotline.com to
educate people about Travel Safety for crime prevention and
provide solutions with a FREE Travel Safety List available to be
printed right off the website. It also promotes fun & amazing
offers for people with low limited budgets.
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