Accident With a Borrowed Car: Whose policy pays?
If you lend your car to a friend and your friend has an accident, it might be your insurance that's on the hook. It all depends on the insurance company that issued your policy. One company's policy may state: "the insurance follows the car"; while another company's policy says the driver's insurance is the primary coverage even though you own the vehicle involved.
Let's take a look at the two different scenarios:
- If the insurance follows the car and you lend your car to a friend, your coverage is considered the primary coverage. If your friend has an accident, it's your insurance that will pay the claim. If the accident is serious enough to use up all of your policy's coverage, then your friend's coverage, which is considered secondary, might also be used.
- If the insurance follows the driver, coverage is provided the other way around. If you lend your car to a friend and they have an accident, it's their policy that is considered primary coverage, meaning their insurance company will pay the claim. In this case, your policy would be secondary and wouldn't pay for anything unless your friend's policy limits were used up.
All these rules go out the window in many cases if the person borrowing the car happens to be a relative who resides in the same household as the owner. You should read your policy carefully to see what type of coverage applies to you.
Remember these two things: First, always exercise caution when it comes to lending your car. Second, if you're ever in doubt about whether you or another driver is covered in any given situation, please call us.Back to TopRental Cars: Should you purchase rental agency coverage?
If you have collision and comprehensive ("other than collision") coverages on
your own car, you are most likely covered if you're traveling in the United
States, its territories and possessions or Canada (for example, travel in
Mexico, the Bahamas or Europe would not be covered). Most policies (except
business policies) cover any rental car that you drive at no additional premium.
Business cars frequently require an extra premium to afford the same coverage.
Caution: Recently, many rental companies have included a “diminution of
value” clause in their rental contracts. These clauses state that the renter is
responsible for any diminution of value charges resulting from a loss incurred
to their rental vehicle while it is rented to you In other words, if your rental
vehicle is damaged to the point where the value is diminished, or at the sole
discretion of the rental agency, the agency feels that the vehicle is not longer
road worthy as part of their rental fleet, you may be charged the difference
between the actual amount of damage incurred and the diminished value of the
vehicle. Most personal auto policies DO NOT cover diminution of value nor
do most credit card companies used to secure your rental agreement. What does
this mean? You could possibly be charged hundreds if not thousands of dollars
over the amount your insurance company may pay for damage to a rented vehicle in
your care, regardless if you were at fault for those damages.
Please give us a call before you leave for your "fun in the sun and/or snow"
to confirm your coverage and for further details regarding this matter.Back to TopWhat Do I Do After an Accident?
You've been in an accident. Here are some general guidelines about what to do
Back to TopCellular Phone Coverage
- Stop at once. Never leave the scene of even a MINOR accident. Do not block
the roadway if at all possible.
- Seek medical assistance and summon police.
- Do not admit fault. Do not comment about the accident to anyone but your
insurance representative and the police. Never accept or make an offer of cash,
check or "private" settlement.
- Gather accident information. Note the date and time of accident.
- Obtain information on the other driver including: name, address, phone
number, make of car, vehicle license number, insurance company and agent's name
and telephone number.
- Record a description of what occurred.
- Draw a diagram of the accident showing the direction of both cars and the
point of the accident. Include street names and location of traffic
- Report the accident promptly to your insurance agent.
Since many of us now have cellular telephones, we thought it might be worthwhile
to highlight a few points regarding how insurance applies to this technology:
If a cellular phone is stolen from your car (or along with your car
if it is stolen), is the phone covered by your auto insurance?
No, it is
not unless the phone is permanently installed and powered by the car's
electrical system. Since most cellular phone are now digital and are portable
(carried in your pocket or purse), it is unlikely that coverage for your phone
will be provided by your auto policy.
Is your portable cell phone
covered by your homeowners or renters insurance?
Sometimes it is, but
coverage is subject to the policy provisions and deductible in your homeowners
or renters policy.
Can you buy broader coverage for your portable cell
Yes, most companies offer a special, broader coverage for
portable cell phones that can be added to a homeowners or renters policy. Call
us for details.
What if you lease a portable cell phone?
you lease a phone, check with the company you lease the phone from to see what
(if any) coverage they may provide. You may then want to check with us to
compare coverages and cost.Back to TopLease Loan Gap Coverage
If you are thinking about leasing or buying a car, you might consider adding
Lease Loan Gap (LLG) Coverage to your auto policy. LLG Coverage is an extension
of your auto's physical damage coverage.
Ordinarily, your comprehensive and collision coverages provide you with up to
the actual cash value (the vehicle's cost minus depreciation) in the event of a
total loss. When you sign a lease or loan agreement, you may be obligating
yourself for an amount higher than the vehicle's actual cash value.
At a cost of approximately 5% of your current comprehensive and collision
premiums, LLG Coverage protects you from out-of-pocket expense when such a "gap"
occurs. Although there are some limitations (such as a percentage cap on the
amount of gap coverage provided) LLG Coverage may pay up to your lease or loan
amount if your car is stolen or if the cost of repairs is greater than its
salvage value. Contact our office and we'd be happy to discuss this coverage
Note: Some car manufacturers may provide gap coverage as part of the lease
agreement --- check your particular contract for details.Back to TopNew Car Selection: Safety Counts
The Insurance Institute for Highway Safety has published a shopping guide for
those wanting to buy a new car based upon safety features. While the guide does
provide specific car lists (from station wagons to sports cars) it also reveals
some overall safety basics to keep in mind.
Vehicle size - Quite simply, bigger means safer. According
to the shopping guide, "People in small vehicles are injured more often and more
severely than those in large vehicles." In relation to their number on the road,
small vehicles account for more than twice as many occupant deaths as large
vehicles. Small sport utility vehicles have the highest death rates of all, in
part because of their greater involvement in fatal rollover crashes. "While
utility vehicles and passenger vans might go head-to-head in a popularity
contest, passenger vans have good on-the-road crash experience --- similar to
that of station wagons."
Air bags - Serving as a buffer between vehicle interiors and
occupants' heads and faces, air bags provide automatic protection in frontal
crashes. The Institute advises that although "the speed and force of air bag
inflation may occasionally cause minor injuries such as abrasions, this slight
risk is far outweighed by the benefits." This type of injury can be reduced by
selecting a seat position that is not too close to the steering wheel.
Safety belts - Remember, the more comfortable the safety
belt, the more likely you are to always use it. Even though
shoulder belts allow some forward movement, automatic crash tensioners and/or
belt webbing grabbers can reduce the chance of an occupant hitting the steering
wheel or dashboard in a serious frontal crash.
Antilock brakes - Especially designed to avoid skidding and
loss of control, antilock brakes automatically pump several times a second.
Drivers need to become familiar with the difference in braking style as
antilocks require heavy braking pressure to activate this safety feature.
Head restraints - Required in the front seats of all new
passenger vehicles, head restraints prevent occupants' heads from snapping back
in a rear-end crash. Look for a fixed head restraint or an adjustable restraint
that is designed to protect tall and short people even in the "down" position.
Avoid a poorly-designed adjustable restraint that would only protect the
Built-in child seats - Several cars and vans offer built-in
child safety seats as options. Back to TopUninsured Motorist Coverage: Do I Really Need It?You're driving your son to soccer practice when you are rear-ended at a stop
sign. Dealing with the initial trauma of the accident and injuries and the
subsequent disruption of a period of medical recovery and the inconvenience of
car repairs is bad enough. What if the injuries are serious? And what if the
at-fault driver has no insurance? Where do you turn?
This is where
your Uninsured Motorists (UM) Coverage comes into play.
the difference between Uninsured and Underinsured Motorists
Underinsured Motorists Coverage covers you and passengers in
your car for "losses unpaid because sufficient bodily injury liability limits
are not available from the policy of an at-fault driver." In other words,
covers you if the wrongdoer has no
insurance while Underinsured Motorists
covers you in the event
that the wrongdoer has some coverage but not enough.
Many people wonder
if UM is really necessary. After all, isn't liability insurance mandatory? How
can there be any uninsured drivers out there? The problem is not everyone obeys
the law. The Insurance Information Institute shows on their web site,
www.iii.org, that an estimated 12% of drivers in Georgia in 2007 were
Others question the necessity of UM in light of the fact they
have very comprehensive medical coverage. In the event of an accident with an
uninsured driver, they assume their own medical coverage will fully protect
them. Yes, medical insurance would likely cover most medical expenses. But it
will not generally compensate the injured person for lost wages, disfigurement,
pain and suffering, mental anguish, and changes in quality of life. For a
person permanently disabled following an accident, even things such as
modifications to make a home and a vehicle more accessible can cost tens of
thousands of dollars. UM can compensate the victim in these broader areas.
There are ways insurance dollars can be saved, but paring down or
going without UM is one we strongly discourage.
Property Damage Coverage
It is estimated that one out of every 20
motorists is driving uninsured. Although this figure represents only 5% of
today's drivers, uninsured motorists are responsible for approximately 13% of
all auto accidents. If you become involved in an accident with an at-fault
driver of an uninsured motor vehicle there are coverage options available to
ensure that you are adequately protected:
- UMBI- Uninsured Motorists Bodily Injury Coverage provides bodily
injury coverage for you and for the occupants of your vehicle. Most policies
already provide this coverage.
- UMPD- Uninsured Motorists Property Damage provides coverage for your
vehicle. Vehicles without collision coverage have no protection for damage
resulting from an accident with an uninsured driver. If the optional UMPD
coverage is added to your policy and you find yourself tangled in an accident
with the at-fault driver having no insurance, you won't be left to pay for the
damage to your car out of your own pocket.
Please contact us if you
want to check into how your particular company's UMPD coverages are structured
and priced.Back to TopTornado Damage: Are you covered? Does windstorm include tornado?
Since the policy specifically refers
to windstorm as a covered cause of loss, some residents have wondered what
exactly windstorm includes. Tornadoes, hurricanes, high winds, thunderstorms
and blizzards are all included in the definition of windstorm. Your homeowners
policy also provides 'loss of use' benefits to cover additional living expenses
while repairs are being made to your home.
Please call us with any
specific questions regarding your property coverage. We are always happy to
review your current coverage needs.Back to TopVolunteer Activities: Are you covered?
You are a volunteer soccer coach, a 4-H advisor, a chamber of commerce committee
member, on the church board, or you helped raise contributions for the last
United Way campaign. Perhaps you have volunteered hundreds of hours this year
without a thought of insurance coverage. If someone is injured, who pays for any
legal action brought against you in these volunteer activities? If you serve as
a board member and are sued for breach of duty, imprudent investments,
discrimination in hiring or wrongful termination, are you covered? To answer
these questions, there are two places to check: your home insurance and the
organization's insurance. Let's look at them:
Your homeowners insurance
policy gives you liability protection for bodily injury and property damage to
others in non-business activities, like a child who is injured when you are the
volunteer soccer coach or 4-H advisor. On the other hand, no protection is
provided if your volunteer activity is related to a business (chamber volunteer,
union, trade or professional association representative, etc.) or if you receive
any compensation. Any legal action other than bodily injury and property damage
is not covered (an exception: some homeowners policies cover personal injury ---
libel, slander, false arrest, false imprisonment, etc.).
Also check for
coverage under the organization's policy. Ask the organization leadership for
proof of insurance for general liability, directors and officers liability, and
employment practices liability. Also check to see if volunteers are covered
(named as additional insureds) under those policies. Some other potential loss
situations could include:
- Failure to examine documents signed
- Silence with respect to improper conduct of fellow officials
- Improper rejection of bids
- Failure to exercise diligence in management
- Incurring unnecessary expenses
Communities are fortunate to have
so many volunteers donating their time in a host of different areas. This
discussion is not meant to discourage any present or prospective volunteers.
Rather, our intent is to help individuals be well-informed, comfortable and
adequately protected when it comes to volunteering.Back to TopEarthquake, Flood and Sewer Back-up
While not wanting to dampen your anticipation of this long-awaited season, it is
a good idea to review some optional coverages you may wish to add to your
current homeowners policy. Flood insurance as well as the sewer back-up and
earthquake endorsements are worth a brief examination.
Since flood damage is excluded under your homeowners coverage, you should be
aware that flood insurance is available from the National Flood Insurance
Program. Most Ohio communities have qualified for the program that provides
coverage for surface flooding only. Structural and contents protection are
offered. A $500 deductible applies.
endorsement provides protection for direct loss caused by water that backs up
through sewers, drains or sump pump wells. Just as flood insurance excludes
coverage for sewer back-up, this endorsement excludes any coverage for damage
due to flooding. Coverage is subject to a deductible.
- Coverage is available with the premium determined by
the structure of your home or building. Because it will better withstand an
earthquake, a frame structure is less to insure than a masonry one. A
substantial deductible (often a percentage of the amount of insurance that
applies to the destroyed or damaged property) is in effect.
clarification of your current policy or information regarding the above
coverages, please contact us. We welcome the opportunity to evaluate your
present needs and to discuss possible insurance improvements for you and your
family.Back to TopYour Home Business: Know Coverage
Test your knowledge of your homeowners insurance:
|While caring for a child for a fee, the child is injured in your home. The
parents expect you to cover the hospital bills.
|You replace your friend's car brakes for a "few bucks" and the car is
damaged or your friend is hurt in some way. He expects compensation.
|A friend slips on an icy walk or trips on a toy while picking up the craft
item she paid you to make. She expects you to cover medical bills.
|You use your detached garage for a small woodworking business and the garage
is damaged in a windstorm. You want your garage rebuilt.
|You do word processing for a fee from your home. Your computer is stolen.
You want it replaced.
|You are a self-employed sales representative with an office in the home.
While entertaining a client in your home, the client is injured and expects
situation described, the answer is probably "not covered" --- unless you have
added specific coverage to your policy for this home business. Take away the
compensation, or business aspect, and each would probably be "covered".
Situations like those described can be covered in one of three ways:
- Your employer may cover it if your business is conducted on behalf of your
- A business insurance policy may be purchased to cover it.
- Your home insurance policy can sometimes be broadened to cover it.
If you have any concerns about a business-type activity in your home,
call us. We'll be happy to discuss it with you.Back to TopMoney Saving Tips
Controlling household expenses is something we all try to do. We want to help
you reduce your home insurance costs when possible. Here are some points to
Check your policy or contact us to see
that you are receiving a discount. If you don't have alarms, get them. Not
just for the discount, but for your family's safety.
The standard deductible today is $500. If yours is lower, you
are paying an added charge. If you choose a $750 or higher deductible, more
savings are available.
Delete unneeded coverage.
policy. There may be jewelry listed that has since been sold, endorsements for
businesses in the home that are no longer in operation or other unnecessary
Central station alarms.
Fire and burglary alarm
systems that automatically dial a central station can provide both good security
and a significant premium savings.
Combine home and auto insurance in
Companies often offer a discount on the home and auto insurance
or both when carried by the same insurer.
In addition to these
money-saving tips, some companies offer discounts if you have fire
extinguishers, deadbolt locks or a loss-free record. Check with us to see if
your plan offers any of these options.
Remember, under insuring is
not a recommended way to save
premium as it can lead to serious problems
settling a claim. Whether it's a question about cost or coverage, we're always
willing to review any insurance concerns with you. Please call us.Back to TopHomeowners Insurance: Covering the Bizarre Losses
Just how broad is your insurance coverage? Will it cover sunken tractors? This
true story has occurred several times: our client parks his riding mower on a
hill, dismounts, and the tractor slips out of gear and rolls into the pond.
Covered? Only if you broaden the coverage on your policy.
have a riding mower or a pond you say? Optional endorsements can broaden a
homeowners policy so that it also covers other personal property lost due to
extraordinary situations. Consider these other covered losses:
- Lost jewelry or gemstones falling out of jewelry not specifically insured
(subject to a policy dollar limit).
- Loss in value when a gemstone is scratched or cracked (subject to a policy
- Cameras or other personal items falling overboard from a boat or a capsized
- A hot iron falling on and scorching an area rug.
- A deer crashing through a sliding glass door causing extensive damage to
household contents as it struggles to deal with the unfamiliar surroundings of a
- Raccoon damage (rodents and vermin are not covered).
- Lost hearing aids, eyeglasses, telescopes, cameras, etc.
- Spillage of paint, India ink, nail polish, acid, bleach, and other chemicals
that damage household contents.
Most home insurance policies list 17
or 18 different perils of coverage for household contents that do not include
the above or numerous other bizarre possibilities. Ask us how we can provide the
extra coverage you need.Back to TopUmbrella Liability
Back to TopInsurance Fraud
|Why have it? What is it? Who needs it?
Skyrocketing court settlements and medical costs can cause uneasy feelings
about the adequacy of insurance protection. Liability insurance pays for
injuries to others due to negligent acts by you or another covered person on
your policy. Although the liability insurance provided under a home or auto
insurance policy is adequate for most situations, in a few instances large
lawsuit settlements do approach or exceed the limits of these policies.
An umbrella liability policy is designed to give you peace of mind from
this concern. It adds one million dollars (or multiples of $1 million) of
protection to the liability limits of your home and auto insurance policy. *
Should a judgment against you exceed the limits of that policy, the umbrella
picks up the unpaid portion up to the umbrella policy limit.
most likely to purchase an umbrella policy are:
varies, but it is generally $140 to $200 per year for a $1 million limit. If
you would like more information on this topic, please call us. We will be happy
to discuss it with you.
- "Likely "targets" for a large lawsuit--professionals, business owners,
property owners, higher income individuals, etc.
- Those who want greater peace of mind knowing that their life savings will be
protected from a financially devastating lawsuit.
*The umbrella can also increase the liability
limit for your boat, rental property, motor home, recreational vehicle,
motorcycle, vacation home and others.
Be a Fraud Fighter!
Fraudulent insurance claims cost us all money.
Toll-free numbers are available for reporting information concerning fraudulent
insurance claims. The caller's identity is kept confidential and an individual
may talk with a trained investigator or leave information anonymously on a
telephone answering machine.
Funds spent on fraud detection are a good
investment. According to the National Insurance Crime Bureau,the
property/casualty industry is recovering $3.50 for every $1.00 it invests in
If you want to report insurance fraud, please call our
office. You can also contact the National Insurance Crime Bureau at the number
shown below. Be a fraud buster. We can all help fight insurance fraud.
NICB Fraud Hot-Line: 1-800-TEL NICB
Back to Top