Why not to Rent Your Car to Others
RelayRides lets people rent their car to others. The owner sets the price while the company performs background checks on the renters, takes reservations, and collects payment. After payment is received they keep their share and send the rest to the individual renting their car.
Most people would see this as a liability issue so RelayRides provides each car owner with $1 million of liability insurance. They do this as insurance companies may deny coverage for damage sustained when a car is technically being used for business when rented out to others for pay. Some companies do not like the idea of car sharing and may not renew if they learn a customer is doing so.
When contacted in March, someone from RelayRides said that there have been no issues with anybody losing their insurance. But they failed to mention an ongoing issue. One renter ran into a car and died, while the 4 people in the other car were all badly injured. They claim he was traveling South in a Northbound lane. According to one lawyer, the total of their claims could exceed $1 million. The excess over the $1 million may or may not have to be paid by the owner of the car, Liz.
The incident occurred in February. Liz received a call that her car was totaled, received a check to cover the cost of getting another vehicle and thought that was the end of it. But, in time, she got a call from her insurance company. They became involved when contacted by a lawyer for one of the car crash victims.
Aside from needing to be reimbursed for medical expenses, the 4 victims could file suits for pain-and-suffering. Some of them may, for example, be uneasy about getting into a car after being struck by someone going the wrong way.
The driver renting the car was most likely at fault. There is $1 million of liability coverage from Relay Rides and Liz has $300,000 coverage in her car insurance policy. However, the final cost of all claims and/or legal judgments is unknown. If the total does end up exceeding $1 million, the courts may have to determine who pays and how much.
RelayRides is trying to convince Liz’s insurance company to deny the claim. They prefer to have their clients keep their personal insurance and want to avoid companies having to pay for losses arising from car sharing. But, her insurance provider sees it as a conflict of interest. They believe she needs as much insurance as possible and it would be in her best interest if they keep investigating the claim and defend her personally.
If, in the end, the claims surpass $1 million and Liz’s car insurance company refuses to pay anything, will she have to pay? Lawyers could see dollar signs because she used to work at Google full time and now has a degree from M.I.T. but they cannot claim that Liz did anything wrong. She was not the driver and the person who was driving was not employed by her. She could be punished by a lawyer or a jury for allowing another person to drive her car… but maybe not.
General Motors and Google, who are RelayRides corporate investors, could make Liz whole with a check but neither company gave a comment on the matter. RelayRides gives the impression of wanting to do the right thing. When Liz wrote about the accident on Google Plus, they also put up a message saying, “We 100% commit to making sure that everyone involved in this tragedy is taken care of as well as humanly possible.”
In response, a lawyer was asked if a check would be given to Liz if she is found to be personally liable. The answer was, “What happens in any sort of accident with insufficient coverage? That’s the societal burden of torts that have liability where there is no insurance coverage.” That doesn’t sound good for Liz. When pressed further, the lawyer gave no other answer.
RelayRides hired a lawyer for Liz but she knew nothing about it and no lawyer had contacted her. The identity of the lawyer was found but they also represent RelayRides so he may not have her best interest in mind. But, she is doing her homework. She learned of a federal law that can protect rental car companies from any liability that may arise from an accident that occurs while the renter is using the car. However, it did not specifically mention if the law applies to those who rent their cars out to others on an hourly basis.
Despite all of this, RelayRides is not planning on increasing the amount of insurance available to renters and, surprisingly, Liz is still using the car rental company. She originally rented out her car through them because she does not use her car a lot and, being environmentally minded, likes the idea of other people using her car instead of buying their own car. Liz also has a dog and is sympathetic to pet owners who have a hard time finding rental companies that do not have objections to pets in their cars.
It is not impossible that her insurance company will non-renew her auto insurance policy unless she quits renting her car to others through RelayRides. Some insurance companies are already trying to get their customers to move away from sharing their cars while others allow their customers to continue car sharing but they are given a higher premium that will make most people think twice about continuing to rent out their car.
A lot of people might shy away from sharing their car after their car is damaged beyond repair, people are badly injured and large claims will be filed but Liz (fearless or crazy, I will let you decide) may continue to do so for as long and as often as possible. However, if her insurance company tries to get her to stop car sharing and is successful, how much time she has to do so may be limited.
Letting people you personally know (and are not on your car insurance policy) use your car is one thing but letting perfect strangers do the same is quite another. The risks involved and the possible mystery of who may be held liable for any damages and/or injuries make car sharing a very bold move. Anyone who considers loaning out their car for a set fee per hour should think very carefully before signing up. The chances may not be very high but a bad situation, like the one Liz is in now, could very well happen again to anyone.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.
Vacation House Insurance Coverage
If you happen to have a part in a share in The Hamptons, renting a vacation house in Cape Cod or a log cabin in The Smoky Mountains, any possessions you take with you are protected while you are on vacation.
If you take a vacation and rent a house during your stay, any of your belongings that you brought with you are covered under a renters or Miami homeowners insurance policy. Possessions have protection from losses caused by lightning, theft, windstorm, fire or smoke, vandalism, explosion, and water damage (not including water from a flood) anywhere on the planet, minus your deductible. But, be aware that there are policies that may limit you to 10% of your total coverage for your possessions when you take any of your belongings off-premises (away from home). For example, if the renters or home insurance policy for your primary residence has $100,000 of coverage for your possessions, you would only have $10,000 of coverage for anything you take with you to your rented vacation home.
On top of being protected while inside your rented home, you will also have protection should anybody steal something that was inside your vehicle.
You may want to purchase a floater (a.k.a. an endorsement), though, if you own items such as musical instruments, sports equipment and/or expensive jewelry. Doing so would give you a greater amount of insurance and broader coverage. Many floaters, for example, come with extra coverage for “mysterious disappearance” which means that you should be covered if you lose a covered possession. On top of that, a floater will cover you throughout the year and not just while you are on vacation.
When looking for a renters or home insurance policy, you have two policy types to consider. The first is a policy with Actual Cash Value, which will reimburse you the amount of your lost possessions up to your policy limit minus any depreciation. The second is a policy with Replacement Cost, which will reimburse you the amount of your lost possessions up to your policy limit but there is no deduction for any depreciation.
Before heading out the door for your next vacation, there are some recommended steps to take:
1. Contact your insurance agent. Ask them about any possible implications there may be when renting a home while on vacation and if you will need any supplemental insurance. It is much better to ask questions when they come to you than after experiencing a loss.
2. Create a list of belongings, including photos, to show what you will be taking with you on vacation. If possible, include a copy of a receipt for any higher-value items such as cameras and computers to have proof of what they cost.
3. Unless you plan to attend a formal event, it is better to leave your expensive jewelry at home or in a safe deposit box. In fact, you could spend less when insuring jewelry with “in vault” coverage. Assuming you only wear it for special occasions, a lot of insurers offer additional coverage when you take your items out of the bank. Before you do, you are required to inform your insurer in advance.
If or when going on vacation there is always something that we will be taking with us and it may not always be possible or make sense to take any or all of those items with you when you leave the rented house. Sometimes the best that we can do is to know what is covered and how much coverage we have while on vacation and to not take any more with you than what is necessary.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.
Basic Car Insurance Policy Coverage
Insurance.com recently conducted a survey that was completed by 500 drivers. The survey was comprised of ten multiple-choice questions about coverages offered in car insurance policies. Results showed that, on average, each respondent was only able to answer three questions correctly.
Based on the results it is highly likely that drivers are making mistakes when deciding how much coverage they want when purchasing an auto insurance policy. Especially if they opt for policies online (which are increasing in popularity) as they may not be getting needed guidance from a miami auto insurance agent.
When they compared answers given by men and women, women answered 35% of the questions correctly while the men only answered 27% correctly. Respondents that claimed to have read their entire policy got a score of 28% while those that say they have never read it had an average of 35%. The lowest average score came from drivers claiming to have excellent car insurance while the highest average score of 39% came from 40+ drivers.
Two questions asked were ‘What does comprehensive coverage pay for? (check all that apply)’ and ‘What does collision coverage pay for (check all that apply)’? Both questions had the same options to choose from for their answer:
a. Damage to my car if I crash it
b. Damage to my car if an object falls on it, like a tree
c. Damage to my car if I hit an animal, like a deer
d. Damage to my car from a flood
e. Property damage to others if I cause a crash
f. Injuries to passengers in my own car
g. Theft of my car
Only 2% answered the comprehensive coverage question correctly by answering with options b, c, d, and g. On average, deductibles for comprehensive were $100 in 2003 and increased to an average of $126.40 in 2010, according to a study done by Mitchell International. They have a theory that drivers may prefer to pay a little bit more for possible comprehensive claims than they would for claims filed for collision damage, which had a deductible increase of $100 to $110.25 from 2003 to 2010.
Speaking of collision damage, the question asking what does your policy pay for when it comes to collision damage, 23% answered correctly by choosing option a. Even if there are drivers that have never been involved in an accident, nobody is immune… including our favorite celebrities, with some of them seeming to be almost accident prone.
A third question was ‘What are the typical discounts auto insurance companies will offer if you qualify? (check all that apply)’. The options that they had to choose from were:
a. Low mileage
b. Using garage for vehicle
c. Anti-lock brakes
d. Anti-theft devices
e. “Good student” discount for a grade point average of 3.0 or higher
f. Lane-departure warning system
g. “Mature driver” (over 55) defensive driving course
7% of the respondents answered correctly with options a, c, d, e, and g. These are good discounts to have but there could be others. Aside from these typical discounts, car insurance companies may have discounts you have never heard of and non-typical discounts might differ depending on your car insurance company.
A fourth question was ‘What factors can car insurance companies typically use when setting rates for full coverage? (check all that apply)’. The options that they had to choose from were:
a. Your age
b. Your gender
c. Your address
d. The length of your daily commute
e. Your occupation
f. Your credit history
g. Your past accidents
h. Tickets you have received
i. The model of your car
j. The year of your car
k. The color of your car
8% answered correctly with options a – j. Like it or not, it seems that everything but the color of your car is taken into account when an auto insurance policy is being compiled. On a happier note, with discounts based on car models, the 2013 Ford Edge SE was ranked by Insure.com as the cheapest vehicle to insure. Other more affordable cars to insure are Jeep Grand Cherokee Laredo, Subaru Outback 2.5i Premium, Kia Sportage, and Jeep Patriot Sport.
A fifth question was ‘What does uninsured motorist (UM) coverage pay for? (check all that apply)’. The options given for this question were:
a. Claims you make even if you have been late paying your premium
b. Car damage to someone you hit who does not have insurance
c. Bodily injury to you and your passenger(s) if your car is hit by someone without insurance
d. Bodily injury to you and your passenger(s) if your car is hit by a hit-and-run driver
14% answered this question correctly with options c and d. Some might want to choose option b but if the uninsured or underinsured driver is not found to be at fault for the accident, then the UM coverage does not apply. When considering how much UM coverage to have make sure that you understand the use of that coverage. Also, do not let the agent tell you how much coverage they think you should have as they could specify a number lower or higher than you may need.
The remaining five questions, their multiple-choice options, the answers (italicized), and the percentage of how many answered correctly are below.
6. What does auto liability insurance pay for? (check all that apply) – 26% answered correctly
a. Damage to my car if I crash it
b. Damage to my car if an object falls on it, like a tree
c. Damage to my car if I hit an animal, like a deer
d. Damage to my car from a flood
e. Property damage to others if I cause a crash
f. Injuries to passengers in my own car
g. Theft of my car
7. What does Personal Injury Protection or Medical Payments coverage pay for? (check all that apply) – 41% answered correctly
a. Damage to my car if I crash it
b. Damage to my car if an object falls on it, like a tree
c. Damage to my car if I hit an animal, like a deer
d. Damage to my car from a flood
e. Property damage to others if I cause a crash
f. Injuries to passengers in my own car
g. Theft of my car
8. If your car is totaled, what does gap insurance pay for? (Select One) – 55% answered correctly
a. The difference between the “actual cash value” of the vehicle and the amount owed on a car loan
b. The difference between the “actual cash value” of the vehicle and the amount you paid for the car
c. The difference between the amount owed on a car loan and the amount you paid for the car
9. If a friend told you she has liability limits of 25/50/40, what does that mean? (Select One) – 69% answered correctly
a. $25,000 for damage to her own car, $50,000 for damage to someone else’s car, $40,000 for bodily injury payments
b. $25,000 for bodily injury to one person in an accident, $50,000 for bodily injury per accident, $40,000 for property damage
c. $25,000 if someone else’s car is totaled, $50,000 if her car is totaled, $40,000 for injury payments
d. $25,000 for bodily injury to her own passengers, $50,000 for damage to her car, $40,000 for damage to someone else’s car
10. If a friend borrows your car and crashes it, whose insurance pays? (Select One) – 71% answered correctly
a. Your friend’s insurance
b. Your own insurance
It is unknown how many people opt for car insurance purely because it is illegal to drive without it and do not pay enough attention to what they are, or are not, actually covered for. The more you know about your car insurance policy, the better off you are in your ability to make decisions regarding how much coverage you have. If you have any questions about what was asked in the survey or about your own car insurance, feel free to give us a call at 305-270-2100.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.
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What is a Declarations Page?
A Declarations Page is the portion of an insurance policy that lists your detailed information. For instance, a Homeowners insurance policy declaration page will list your name, home address, policy number, the effective and expiration dates of your policy, the premium for the coverage you have acquired, and the limits of each coverage.
The following are terms that you may find on your Declarations Page:
- Named Insured: This is the individual or business that is identified as the insured party.
- Additional Insured: This is someone listed on your policy because certain coverages on the policy can be afforded to them. For instance, if you lease a car, the leasing company may require to be listed as an additional insured. The leasing company is still the owner of the car; therefore, they can be held accountable for damages caused by the car. Being listed as an additional insured on your policy will trigger your policy to afford some coverage to the leasing company in the event they are subjected to a suit involving the car.
- Endorsements: There can be situations where changes need to be made to the standard policy language. Instead of rewriting the entire policy, the insurance company includes endorsements to the policy. They are basically adjustments made to the insurance contract that can change the coverage or terms of the policy. Your Declarations Page will list which endorsements apply to your policy.
To learn more about what is on a declarations page and to have any questions answered, give us a call at 305-270-2100.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.Like us on Facebook!
Rental Car Insurance In Miami
Making sure that a rental car is properly insured may not be an easy decision for some people. It does not help that a lot of people arrive at the rental company before thinking about it. Not being prepared can cause renters to get coverage they do not need or gaps in coverage. Before renting, it is recommended that you speak with your car insurance agent and, if you pay with a credit card, your credit card company.
1. Your auto insurance agent
You need to know what coverage you have on any vehicles you own. Many times, your coverage in your car insurance policy goes with you when you rent. If you use the rental for business, though, that may not be the case.
If you have removed one or both of two coverages (comprehensive and collision) to help lower your auto insurance premium, then your car insurance policy will not be able to offer you any coverage if someone steals your rental or if it becomes involved in an accident.
You may also want to find out if your car insurance company helps you pay for towing charges, loss of use and/or administrative fees. There are companies that have insurance riders available to their insureds to help them cover some of those expenses, and it can be cheaper than acquiring coverage via the rental company. However, a lot of insurers do not cover diminished value, which happens after a vehicle is damaged in an accident and then repaired.
2. Your credit card company
Which bank you have your credit card with and/or your credit card company effect which insurance benefits are available to you. Even your credit card level may be a factor. A platinum level card may come with better insurance coverage than a card with a silver or gold level.
Typically, credit cards only provide coverage if a rented vehicle is lost or damaged. There may not be any coverage available for possessions, other cars or items that belong to others. The credit card may also lack coverage for any liability in the event that anybody gets hurt or dies. It is possible that there could be some coverage for having your rental towed, but it is unlikely that you would have any coverage in regards to administrative fees or if the car has a diminished value. Knowing what coverage you have through your credit card is important so that you do not accidentally assume you have more or less coverage than you actually do.
Credit cards have a toll-free number on the back that you can use to inquire about what you are covered for and how much coverage you have. If you are thinking of depending on what you have through your credit card, it would be wise to request that they send you a printed copy of their coverage information. Usually, any benefits available to you through your credit card would be secondary to your car insurance policy or any insurance you purchase from the rental company.
If you happen to have multiple credit cards, you could call each to find out which one offers you the best level of protection.
3. At the rental company
Insurance is regulated on a state level so your coverage and how much it costs may vary. Renters, though, usually have the following coverages to choose from:
a. Loss Damage Waiver (LDW)
Technically, this is not insurance. It does, though, help “waive” all or some of the financial responsibility if the rental is stolen or becomes damaged. In a lot of cases, there is coverage for “loss of use”, which is when the renter is charged by the rental company for time a damaged car cannot be used. There also might be coverage for administrative fees and towing.
However, any waiver may be voided if speeding, driving on non-paved roads or drinking while driving led to an accident. If your car insurance policy has coverage for comprehensive and collision, call your insurance agent to ensure you do not pay for something you already have. LDWs tend to cost somewhere from $9 to $19 per day.
b. Liability Insurance
Rental companies are required by law to provide at least the minimum amount of insurance set by the state. But, that amount tends to be low and provide little protection. If your car insurance policy has a better level of protection, then you could go without. The extra insurance may cost $7 to $14 per day.
What could be more cost-effective is an umbrella liability policy. This coverage sits on top of your insurance for your car and/or home and provides extra protection, like when you have an accident in your car or in a rental. This policy may cost $200 – $300 for one year of $1,000,000 of coverage. Additional coverage is added in million dollar increments and could cost $50 to $100 for each additional million.
For anybody that does not own a car yet frequently rents vehicles could look into getting a non-owner liability policy. It provides liability protection when renting a vehicle or when driving a borrowed car.
c. Personal Accident Insurance
In the event of an accident and injuries occur, this offers coverage to you and any passengers for medical bills and costs for an ambulance. Per day this could cost about $1 – $5, but if you have good health insurance or you have personal injury protection through a personal car insurance policy, you may not need it.
d. Personal Effects Coverage
This comes into play if anything you own is stolen from the rental. This may not be needed if you have off-premises theft coverage on a home insurance policy or a renters policy that would cover costs minus your deductible. Otherwise, this coverage could be $1 to $4 per day.
If you are a frequent traveler and take expensive items with you, look into getting a personal articles floater under the insurance policy for your home. This floater protects valuables while at home or while traveling anywhere in the world.
4. Other things to consider
Age matters. States have age requirements and rental companies have their own age requirement which may differ from the state. Some rental companies may also look into your driving and/or credit history so check with them before arriving to pick up the vehicle.
If you will be leaving the country, call your car insurance agent and a travel agent (if used) to see what you need to do if not already adequately insured. For example, rising crime rates in Mexico are a concern for rental car companies and it might be difficult to rent a car to get there. The minimum insurance requirement for Mexico is civil liability insurance in case you cause damage or become injured. Our liability insurance is invalid in Mexico when it comes to bodily injury, although some policies may cover physical damage. But, do put in a call to your Miami insurance agent to confirm what coverages do and do not go with you to Mexico. Some towns near the border offer Mexican rental car insurance in case you want to be as protected as possible.
Note: If traveling abroad and want to rent a car, some countries may require an international driver’s license.
Vehicles are rented every day whether it be for business or personal use. When it comes to being protected, not everything may be affordable but it is important to do what you can. In most cases the majority of people that rent a vehicle may not have any accidents, cause any property damage or have their vehicle stolen but the future is always an unknown and it is better to have insurance coverage and not need it than to need insurance coverage and not have it.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.Like us on Facebook!