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Car Insurance Issues for Travelers |
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There are several insurance coverage issues when you drive avehicle that you do not own especially when traveling. Here aresome examples:
1. Even if you decide that your predominate means oftransportation for traveling will be by either airplane, train,or bus, when you finally reach your destination you willprobably want to rent a car.
2. You may know somebody who will let you drive their cartemporarily while you are visiting.
3. You may want to drive to your vacation destination. You havea perfectly good drivable insured vehicle, but you may stilldecide to rent a car before you leave home so you do not put anyadditional wear and tear on your own vehicle.
4. You may be an employee who is the custodian of a vehicle youuse everyday that is either owned or leased by your employer andyou want to drive that car on your vacation.
5. You may be required to drive that company owned car on abusiness related trip within the scope of your employment.
6. Your employer will pay for you to drive a rental car whileyou are within the scope of your employment on a businessrelated trip.
I cannot tell you in any case whether or not you have insurancecoverage without reading your individual insurance policy withall of the conditions and exclusions to determine whichinsurance coverage is primary, what is supplemental or excess,and where there is no coverage at all. For example, if you arean employee on a business trip driving your employer's vehicleor 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 awareof that many people overlook and let you know what you need toask so you can find out the correct answers from the appropriatepeople and also make sure that you have all of the properdocumentation so there is no misunderstanding or confusion.
The best, easiest, fastest and most reliable way to determinewhat type of coverage you have on a non-owned or rental vehicleis to call and ask your insurance company (or agent) or ask youremployer if you are driving a company vehicle. Also, call andask your credit card company if you plan to use it to rent avehicle. Find out if they offer some type of insurance coveragewhen 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 allcompany vehicles are insured by an insurance company with aninsurance policy. Some company vehicles are Self-Insured.Employees driving company vehicles need to know becausedifferent rules apply. Your employer should let you know this onthe day they give you the keys, but if they don't you need tofind out. Also, you need to know if your company insures anybodyother than the employee to drive your company car and are youallowed to drive the company car outside of your state oroutside 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 drovecompany cars. The company made it crystal clear to all of usthat the only people who had permission to drive the companyowned cars were the employees and their spouses. We were allowedto drive the cars for business and personal reasons includinggoing on a vacation and we had permission to drive the cars outof the state of California if we wanted to. Employees did nothave permission to allow their licensed teenage sons ordaughters, nor their friends, neighbors, parents, siblings,cousins, other relatives or anybody else to drive the companyvehicle.
In summary, as adjusters we had 4 basic responsibilities: 1stwas to confirm or deny coverage. 2nd was to investigate theclaim and determine liability, and how much liability wasattributed to the claimant(s) and how much to the insured. 3rdwas to determine the amount of damages including bodily injuriesand property damage and 4th was to either deny the claim andprepare 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 vehicleowner to drive a vehicle. The simplest way to illustrate this iseventhough you may have full insurance coverage on a car youown, if somebody steals your car, then the car thief gets intoan accident while driving your car, (obviously without yourpermission) and causes bodily injuries, death and / or propertydamage to a claimant(s), there is no coverage for the car thiefon your insurance policy.
SECOND, for people planning to rent a car, make sure that yougive the names and licenses of all the people who will bedriving the rental vehicle to the Rental Car Company. You arealso normally suppose to let them know if you are planning todrive the rental car out of the state or out of the country. Donot assume that when you drive either your own vehicle or arental vehicle out of the country that the insurance willautomatically transfer. You may not have any insurance coverageonce you drive across the boarder into another country. This issomething you need to find out from your insurance company.
There may have been people tell you that your personal carinsurance will automatically transfer to a rental vehicle. Thisis not always true. If you look on your insurance policy you maysee the terms "Non-Owned Vehicle" and "Temporary SubstituteVehicle". Some insurance policies make a clear distinctionbetween the two. Others make you read the fine print to try tounderstand the difference.
Remember to always ask your insurance company if there isanything that is not clear and you do not understand. Insurancepolicies of different carriers are written differently. But ingeneral, usually what it means is when your vehicle is notdrivable or is not safe to drive, out of service, broken down,in a repair or body shop, in for servicing or maintenance andyou rent a vehicle as a temporary substitute to replace your owninsured vehicle for a limited time, that is normally whencoverage will transfer from your vehicle to the rental. Youstill have to ask if your insurance requires you to rent thevehicle from a Public Automobile Rental Agency or if you will becovered and can be reimbursed for renting a vehicle from afriend. Depending on how your policy is written, it may transferthe full policy limits or coverage may be reduced down to thestate's minimum liability requirements. Something else veryimportant to find out is if only liability coverage transfers orif collision and comprehensive damage also transfers.
So on the other hand, that means coverage may not transfer ifyou rent a vehicle while you are on vacation and there isnothing wrong with your own insured vehicle which is inperfectly good drivable condition just sitting in your drivewayat home, or your spouse and kids are driving it at home whileyou are driving a rental car either on a personal or businesstrip. Do you really think your insurance company will becovering two vehicles for the price of one? Ask them and findout.
If your own insured vehicle is in good safe drivable conditionand you are planning to rent a car while you are traveling, calland ask your major credit card company first because you have abetter chance of getting good news from them about rental carinsurance coverage while you are on vacation or traveling on abusiness trip. If you use your credit card to pay for yourrental car, there are some major credit card companies that willprovide some type of insurance coverage when you rent a car. Inany case, always call your own insurance company and ask themwhat type of coverage, if any do they provide when you rent acar and under what circumstances and conditions it istransferred so there is no misunderstanding.
THIRD, if you are visiting friends or relatives while travelingand they give you permission to drive their vehicle, what youstill need to find out is whether the same coverage limitstransfer to a driver other than the named insured or does thecoverage get reduced down to the state's minimum liabilitycoverage requirements if for example, a friend of the insured isthe driver.
Do not be intimidated by the long list of exclusions under theMedical Payments Coverage. Commonly known as Med Pay, it appliesto injuries sustained by the occupants of an insured vehiclewhich includes the insured driver and all passengers regardlessof liability. It only pays for "Special Damages" like medicaland dental bills but it does not pay for "General Damages" likepain and suffering.
You may be covered for Med Pay even if you are a driver or apassenger in a qualified non-owned vehicle. So this isdefinitely something you need to find out from both your owninsurance company and the insurance company of the vehicle youare in. Maybe one could be primary while the other issupplemental or excess. Just be aware that there are ruleslimiting and rules against duplication of coverage. Med Paycould be worth several thousands of dollars toward your medicalexpenses.
Now do you want to know the inside scoop behind the secret wallsof an insurance claims office? No matter how much you may thinkthat you do not have coverage for something, always ask.Especially in unique unusual circumstances I have personallywitnessed fierce arguments between adjusters, supervisors andmanagers over whether or not to confirm or to deny coverage.Think about it, if you put a defense attorney and a claimantattorney in the same room with the same case or 2 differentUnited States Supreme Court Judges in the same room with thesame case, you could get 2 totally different opinions. That iswhy you should always ask and take action before the statute oflimitations runs because you might financially benefit fromsomebody's mistake.
About the author:
Stephanie Gibbs created http://www.travelcheaphotline.com toeducate people about Travel Safety for crime prevention andprovide solutions with a FREE Travel Safety List available to beprinted right off the website. It also promotes fun & amazingoffers for people with low limited budgets.
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