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 to always exercise caution when it comes to lending your car.
Brian Wyatt
213-8864
Tuesday, August 25, 2009
Tuesday, August 4, 2009
6 Deadly Sins...Of Buying Auto Insurance
1. Purchasing Auto Insurance form a "direct writer" or "captive agent".
There is certainly nothing wrong with these types of insurance companies. State Farm, Allstate, and GEICO are three such examples. However, it would be much more prudent from a consumer's perspective to contact an independent insurance agent. Please understand that independent insurance agents represent numerous different insurance companies and can therefore "comparison shop" your rates with these reputable insurance carriers. This is vastly different from a "direct writer" who only represents their own company and thus only has one rate for the coverage plan to offer you. In other words, whatever your driving record or coverage needs are, it is imperative that you allow an experienced insurance professional analyze your situation and shop around for the best available rate. As there are literally thousands of coverage options from hundreds of insurance companies. Utilizing the skills of an independent insurance agent is the best way to determine what type of policy to purchase from which insurer.
2. Applying for Auto Insurance with low deductibles.
I would recommend that once at least carry a $500.00 deductible on their comprehensive and collision coverage's. This way a policyholder will not be turning in relatively small claims to their insurance provider which could negatively impact their rates. Plus, carrying higher deductibles is an excellent way to significantly reduce one's premiums!
3. Not placing your Automobile and Homeowners Insurance Policies with the same agent.
Once again, from a responsible consumer's point of view, it only makes financial sense to place both of your automobile and homeowners policies together to maximize the savings. For instance, a majority of insurance companies offer a 10% to 20% discount on policies when both the home and auto coverage are placed together.
4. Buying an Automobile Insurance Policy with too low of liability limits.
One should never secure an auto policy with just the state minimum limits. In Indiana the state minimum limits are $25,000 per person /$50,000 per accident bodily injury and $10,000 property damage. Using this example, if an irresponsible consumer purchased an auto policy with these extremely low liability limits and caused an accident with any vehicle that is worth over $10,000 he or she might experience a "financially devastating event!" Here is a question to consider: how many vehicles driven on the road today are worth well over $10,000?
5. Not adding an Umbrella Policy to your personal insurance portfolio.
Dollar for dollar a $1,000,000 umbrella policy is the least expensive form of insurance available today yet few too consumers have this very important coverage. This policy could protect everything from the equity in your house to your savings and retirement plans in the event of a tragic accident.
6. Not taking your credit into consideration.
Like it or not, in today's insurance marketplace, a majority of companies are now using a person's credit worthiness as a major factor in determining what to charge for auto insurance. Traditionally, one's credit history only mattered when applying for mortgages and auto loans; however, since the late 1990's insurance companies' have also been using credit as a rating mechanism. As a result of this fairly new underwriting philosophy adopted by insurance companies', my suggestion to consumers is that they remain diligent about keeping credit scores high.
Thank you for taking the time to read the "Six Deadly Sins Report." You could be just minutes away from lowering your own insurance costs. Take the first step and call or e-mail me for a free, no obligation quote.
Remember you can't save if you don't compare!
Brian Wyatt
317-213-8864
blwyatt@sbcglobal.net
www.brianwyatt.com
There is certainly nothing wrong with these types of insurance companies. State Farm, Allstate, and GEICO are three such examples. However, it would be much more prudent from a consumer's perspective to contact an independent insurance agent. Please understand that independent insurance agents represent numerous different insurance companies and can therefore "comparison shop" your rates with these reputable insurance carriers. This is vastly different from a "direct writer" who only represents their own company and thus only has one rate for the coverage plan to offer you. In other words, whatever your driving record or coverage needs are, it is imperative that you allow an experienced insurance professional analyze your situation and shop around for the best available rate. As there are literally thousands of coverage options from hundreds of insurance companies. Utilizing the skills of an independent insurance agent is the best way to determine what type of policy to purchase from which insurer.
2. Applying for Auto Insurance with low deductibles.
I would recommend that once at least carry a $500.00 deductible on their comprehensive and collision coverage's. This way a policyholder will not be turning in relatively small claims to their insurance provider which could negatively impact their rates. Plus, carrying higher deductibles is an excellent way to significantly reduce one's premiums!
3. Not placing your Automobile and Homeowners Insurance Policies with the same agent.
Once again, from a responsible consumer's point of view, it only makes financial sense to place both of your automobile and homeowners policies together to maximize the savings. For instance, a majority of insurance companies offer a 10% to 20% discount on policies when both the home and auto coverage are placed together.
4. Buying an Automobile Insurance Policy with too low of liability limits.
One should never secure an auto policy with just the state minimum limits. In Indiana the state minimum limits are $25,000 per person /$50,000 per accident bodily injury and $10,000 property damage. Using this example, if an irresponsible consumer purchased an auto policy with these extremely low liability limits and caused an accident with any vehicle that is worth over $10,000 he or she might experience a "financially devastating event!" Here is a question to consider: how many vehicles driven on the road today are worth well over $10,000?
5. Not adding an Umbrella Policy to your personal insurance portfolio.
Dollar for dollar a $1,000,000 umbrella policy is the least expensive form of insurance available today yet few too consumers have this very important coverage. This policy could protect everything from the equity in your house to your savings and retirement plans in the event of a tragic accident.
6. Not taking your credit into consideration.
Like it or not, in today's insurance marketplace, a majority of companies are now using a person's credit worthiness as a major factor in determining what to charge for auto insurance. Traditionally, one's credit history only mattered when applying for mortgages and auto loans; however, since the late 1990's insurance companies' have also been using credit as a rating mechanism. As a result of this fairly new underwriting philosophy adopted by insurance companies', my suggestion to consumers is that they remain diligent about keeping credit scores high.
Thank you for taking the time to read the "Six Deadly Sins Report." You could be just minutes away from lowering your own insurance costs. Take the first step and call or e-mail me for a free, no obligation quote.
Remember you can't save if you don't compare!
Brian Wyatt
317-213-8864
blwyatt@sbcglobal.net
www.brianwyatt.com
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