“Why is the Insurance Company so darned nosey? It’s None of their business!”
Monday, August 15th, 2011Here’s something about car insurance that we have to explain a lot. And rightfully so, because it can be quite confusing to the average consumer.
Here’s the question…”Why do you want to know about the other people living with me?” They don’t drive my car.” The answer to that question takes us to some core concepts about insurance that everyone needs to understand. It’s simple-it’s all about analyzing RISK!
Though the details are complex, at its foundation insurance is quite simple. Your policy is a contract with the insurance company. The company assumes the risk of paying your covered claims in exchange for your premium-the price of your insurance. What is and isn’t covered is the complex part, but the principle is very simple.
The risk to the company is enormous…tens or hundreds of thousands, even millions, of dollars! So, before they take on such risk by selling you a policy, they analyze your “risk of loss”. They ask, “What’s the chance you’ll have a claim as compared to the general population?” And they continue to analyze your risk of loss as your actual claims experience and life circumstances change.
If your risk is comparatively low, you pay a lower price. If you risk is comparatively high, you pay a higher price. And in some cases-or with some companies-you may not be able to get insurance at all, because your risk is too great.
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The Mysteries Of Rental Car Insurance Revealed!
Tuesday, May 24th, 2011It’s one of the most common questions we get. And it’s an important one.
Why? Because it involves a conflict.
On the one hand, you don’t want to waste money or feel like you’re being ripped off. And on the other hand, you want to make sure you’re protected. What’s this important question?
“Does my auto policy cover my rental car, or should I buy the rental company’s insurance at the counter?”
If you’re going on vacation this year, or just traveling in general, you’ll find yourself asking this very question. Unfortunately, the answer can be trickier than anybody would like it to be! A simple yes or no simply won’t do. And what you decide to do depends on several things.
Where are you going?
Your Pennsylvania auto policy applies only to accidents or losses that happen in the United States, its territories and possessions, Puerto Rico and Canada.
If you find yourself driving anywhere else, your auto policy does not protect your rental car – or you while you’re driving it. So, in these cases be sure to buy insurance from the rental company.
How will you use the rental vehicle?
Generally, there are two ways to use your rental car – personal or business use.
If you use it for business, then you must insure your own vehicle for business use to get coverage from your policy on the rental.
You could insure a vehicle for business use on your personal auto policy or have a business auto policy.
Your Policy Options & Limits
Let’s say you’re traveling in the United States, and you’re not using the rental car for business. Great. Now, will your personal auto policy protect your rental car?
Yes! BUT … only if you’ve purchased protection for yourself.
For example, if one of your cars is protected for collision claims, then your rental car is protected in a collision. If one of your cars is protected for comprehensive claims, then your rental car is protected for damage other than collision. Keep in mind, your deductible will apply just like driving your own car.
For liability – i.e. somebody sues you or you damage other people’s property – the liability limits on your car will apply.
Hidden Costs You Won’t Like
Unfortunately, things get a little more complicated…
Rental car companies have little tricks up their sleeves when you don’t buy their insurance. These tricks could stick you with hundreds of dollars of unexpected charges on your credit card if you wreck their car.
First, the rental car company receives income by renting their cars – obviously. If you wreck their car, they can’t rent it to anybody else until it’s fixed or replaced. In theory, they’re losing money and they’ll charge you for that “loss of use”.
And that makes sense. Business insurance commonly pays for such losses – when they’re real. However, insurance companies don’t pay for theories. They only pay for actual economic loss.
The rental company has many cars sitting on its lots un-rented. It’s not ACTUALLY losing money because the one car you wrecked is out of commission.
So, your insurance company won’t pay a “loss in use” charge. But that won’t stop the rental car company from charging you for it. And it could be hundreds of dollars.
The second trick is administrative fees. These fees compensate the rental company for processing claims paperwork to get the car fixed or replaced, etc.
Again, your insurance company isn’t going to pay that fee. It’s not an insurance loss. It’s the rental car company finding a way to get more money out of you. Such fees could be as high as $250 … or more!
So, should you buy the rental company insurance at the rental counter or not?
First, call us before you leave to make sure of your personal situation. That’s why we’re here, to help you!
Second, if you’re willing to risk paying “loss of use” and administrative charges – which could be hundreds of dollars – then don’t buy it. But if you’re not willing to take that risk, buy the insurance and sleep well on your vacation!
*This article provides general educational information only as a service to our clients. When conflicting language exists, your policy takes precedence over any information in this article. You should always obtain counsel from a licensed insurance agent before changing your policy.
The Gannon Agency’s
Circle of Safety
Your consumer Awareness Advisor
How to Deal with a Parking Lot Accident
Monday, March 14th, 2011A parking lot accident can ruin your day. Some parking lots are nothing short of being a deadly trap. It is not uncommon to see people backing out of a parking spot talking on their cell phones or texting. Most parking lots in America are considered private property, which means different rules apply to them. Here are some ideas that will help you in case you are in a parking lot accident.
- After the accident, pull your car out of the way and into a safe location.
- Exchange names, addresses, phone numbers and insurance information with other drivers. Make sure you SEE the driver’s license and insurance information of all other drivers. Insist that all parties must exchange information for insurance purposes. If they do not want to comply, call the police.
- Get the names, addresses and phone numbers of any witnesses. This is one of the most important tips I can give you regarding parking lot accidents. Witnesses can help verify what happened during the accident.
- Even though you may be upset, take note of the facts surrounding the incident such as time, date, location, weather conditions and parking lot conditions. Write them down. Take pictures if you have a cell phone with a camera.
- Call the police. Do this even if someone has already done it or several hours have passed since the time of the collision. Most police officers will not come to a parking lot accident (private property = no jurisdiction). However, if they do not come to you, you can go to the closest police station and file a “walk-in report”. Write down everything you know and exactly what happened. This will help you later on to document your claim. Sometimes this will be the only piece of evidence that will come in. DO THIS WHILE IT IS FRESH IN YOUR MIND.
- Even if your parking lot accident is minor and the damages are not significant, call the Gannon Agency right away – we can give you information on how to proceed. This will protect you in case the other party makes a claim against you. Remember that a parking lot accident is the single most disputed accident out there.
- If you do not have a witness, talk to the business owners (or managers) of stores in that parking lot. Many parking lots in America have surveillance cameras and it is likely that the accident was recorded. This will be the single most important piece of evidence.
- If there is no video, take pictures of the parking lot or draw a diagram of the accident. It can simply be boxes and lines to show the position of the vehicles. This will help your insurance claim’s adjuster determine how much visibility you had, etc.
How to Determine Who is at Fault:
People are expected to drive their vehicles with care and thought. Failure to do this is the cause of many accidents and can lead to lawsuits. There can be no-fault accidents, in which case the person who had the right of way is not responsible for the loss. However, if you were backing out of a parking spot and hit a car, you would be at fault since you had the greater duty of care when backing out of your spot. Even though the other person may not have had their lights on or was driving very quickly, because they had the right of way, they’re not at fault. Now if both parties are backing out of parking spots and collide, the loss could be considered 50/50 in which case both parties are partially at-fault.
How to Avoid Parking Lot Accidents:
Park far away from other vehicles, if possible Use a turn signal when making a turn, even in a parking lot Park in the center of a parking space – not on the lines Pay EXTRA attention when pulling into and backing out of parking spots Drive VERY SLOWLY in parking lots – be careful when entering and exiting a parking lot Do not park next to obstructions or hazardous objects Try to get an End parking spot A worthwhile investment that I strongly recommend is getting the back-up sensors installed on the rear bumper of your car, especially if you drive a pickup truck, SUV or van. The back- up sensors will run about $300 – $400 but if it prevents just 1 small claim it was well worth it, especially when you consider that most people have a $500 collision deductible.
Multi –car discount
Thursday, December 9th, 2010Have you planned to buy a new car for yourself this year? Are you aware about the types of car insurances available in the automobile insurance market? If yes, then it would help you in many ways, but if you are not aware about car insurance policy, the best and immediate thing that you can do right now is to consult auto insurance company, especially if you are searching for any unique kind of car insurance like multi-car insurance and the discounts thereof.
One of the largest auto insurance discounts is the multi-car discount, and you can easily avail the discount anytime after you have bought the car. The multi-car discount is a cheap option, and moreover, it offers you the best solution in order to give you complete peace of mind. Look out for Auto Insurance Montgomery County, or you can also search for professional and more organized insurance companies out there in Warrington, Bucks County, Southampton, Levittown etc.
Let’s discuss about what multi-car insurance is all about? How it is discounted for your car? For example, if you have one car at home, it is quite obvious that you’d go for single car insurance, but if you have more than one car and automobile to your home, how you go about? What you’d like to do in such a situation? Would you go for separate car insurance for a new car? If yes, then would it be a feasible option to carry forward, especially if you end up paying ridiculous car insurance policy premiums every month! Keeping all these repercussions and hindrances in mind, auto insurance companies came out with an effective multi-car insurance policy discount that not only offers comprehensive car insurance policy but also handsome discounts to the car owner who have more than one car in his or her possession.
As per the guidelines and instructions of multi-car discount insurance policy, if you insure more than one vehicle on single auto insurance policy, you can save on the monthly premiums by almost 10 to 35 percent. Moreover, the multi car discount policy also comes a handy option if your kid who’s between 16 and 18 years of age insisting to drive the car. It is significant to note here that child auto insurance is expensive and it turns out to be really expensive if you have more than one male kid and both of them are insisting to drive the car. But, with multi-car discount, you just don’t have to struggle to buy a highly expensive car insurance policy for your kid. All you need to do is to include the name of your kid within your insurance policy and get set started to make him drive your precious car, because now he’s completely safe.
Be Extra Careful When Driving or Pay Deerly!
Friday, October 22nd, 2010The Real Danger May Surprise You
Hitting deer is part of where we live. There are lots of roads, lots of cars on those roads and lots of deer crossing those roads. Car/deer collisions are inevitable.
A deer can cause a lot of damage to a car. Sometimes the driver or passengers get injured, but its rare. Even rarer still are serious injuries (for humans, that is) resulting from a deer hit. Where things get bad for the humans is when they swerve to miss a deer and instead find trees, embankments, bridge abutments and other cars.
So here are some tips for safe travels during our fall deer season.
Tips To Keep You And Your Loved Ones Safe
- Slow down. That’s pretty simple and always a good idea. Going 50-55 mph on a back road with a 35 mph limit is a recipe for deer disaster.
- Be extra alert during the fall. This is when deer are most active. It’s rut season, and they’re all running around with their hormones out of control.
- When you see one, assume there’s more! When that deer crosses the road 150 yards ahead of you, it’s likely her buddies are waiting in the wings. Slow down. Look carefully and proceed cautiously. AND put on your 4-way flashers! Even worse than hitting a deer is getting rear-ended by the guy coming up behind you.
- Brace yourselves animal-lovers…I love nature and animals as much as the next guy, but there’s a cold hard fact to face here. You, your passengers and other drivers are MUCH more likely to be seriously hurt, or even killed, when you swerve to miss the deer. I know it’s an eye-blink reaction to swerve. I’ve been there. But try not to.
- What should you do? Apply your brakes, keep the wheel straight and keep your car under control. Will you hit the deer? Maybe. But trading your life for its life, though unfortunate for the deer, seems a justifiable trade-off to me. Will you feel bad hitting and even killing the deer? Probably. But it won’t compare to hurting or killing another person instead.
- Did I mention…slow down! Low speeds allow you shorter braking distances. Maybe you can keep your car under control and NOT hit the deer, too.
“Is There An Impact On My Policy?”
In addition to these safety tips, keep in mind that hitting an animal is considered a “comprehensive” claim on your auto policy. It has no impact on your continued eligibility for insurance.
But, if you miss the deer and wreck your car, that goes on your record as an at-fault accident – affecting your price and eligibility for insurance. (I know that doesn’t seem fair, but don’t shoot the messenger. I’m just letting you know how it works.)
Why? Because, unfortunately, people lie – especially to insurance companies. When someone wrecks their car and says, “I had to swerve to miss a deer”, the adjuster has no way to verify the truth of it. If insurance companies accepted everybody at their word, suddenly every accident that ever occurred would be met with the explanation, “I had to swerve to miss a deer”!
Unfortunately, the few dishonest people penalize the honest majority. Such is life. So, if you miss the deer, but hit something else, it’s an at-fault accident as if the deer had never been there. (And sometimes it never was!)
Finally, people ask, “What if I hit the deer AND wreck my car?” Answer: That’s a comprehensive claim – NOT an at-fault accident.
Be careful out there. Watch out for the deer. You’ll see more and more in the coming months. Be cautious behind the wheel, and have a beautiful and safe fall season. Go Penn State!
State Cracks Down on Auto Insurance Lapses!
Tuesday, March 23rd, 2010Don’t ask me why, because I don’t know why. I only know what we’ve seen in our day- to-day operations. The DMV seems to be paying close attention to lapsed car insurance policies and, more importantly, enforcing the laws surrounding registered vehicles with no insurance.
Why should that matter to you? Because a series of mistakes could land you in some hot water! Here’s how to easily keep this major hassle out of your life.
What the Law Says
I’m not offering legal advice, and I can’t cover the entire Motor Vehicle Code here. (Nor would I want to – as if insurance isn’t boring enough already?) But here’s an important part of it…
Simply stated, PA state law requires you to insure all registered vehicles. If you drop the insurance on a registered vehicle – regardless if it’s intentional or not, and even if only for a day – your registration is subject to a 3-month suspension. You must return the registration plate, sticker, and card to the DMV.
However, if you reinstate your insurance quickly, you can avoid the suspension by signing an affidavit declaring that nobody operated the vehicle while it was uninsured. The catch? Falsifying this statement is a misdemeanor.
I Didn’t Mean to Drop My Insurance!
If you cancel your insurance intentionally, then this article really isn’t for you. But what if it cancels by accident? What if it’s only for a few days? The DMV doesn’t really care! Here’s how it could happen to you.
Your insurance company sends you renewal notices and installment bills depending on your payment plan choice. If you miss the payment, they send you a cancel notice with a cancel date. If you don’t pay by the cancel date, they cancel your policy, you’re without insurance and they notify the state.
Most companies then allow for an “easy reinstatement” – which means they’ll accept your payment for a certain period of time and reinstate your policy. That’s nice for you. BUT…easy reinstatement does NOT mean your policy wasn’t canceled. It was. It creates a “lapse” – the period of time you were without insurance between the cancel date and the reinstatement date.
The DMV requires you to declare that nobody operated the vehicle during this lapse period. Otherwise, your registration is suspended for 3 months.
Now, let’s face it. We MUST have our cars, right? With the prospect of a 3-month suspended registration, most people are going to sign the affidavit – even if they drove the car every day during the lapse period.
What’s the solution? There’s only one I know of… Don’t get into this position in the first place! Here’s how.
How to Keep The DMV Out of Your Life
Pay your car insurance bills on time. Your policy can be canceled if your payment is late, period. And the insurance company is under no obligation to reinstate your policy… even if they’ve done so in the past.
Pay attention to everything you receive from your insurance company. It’s not junk mail! Open it. Read it. It could save you from a painful mistake. If you’re not sure what it’s telling you, we’ll help!
Switch to automatic payments. Each company offers automatic monthly deduction from your checking account. You can’t miss a payment and have an accidental lapse this
Call the Gannon Agency if you receive a late payment or cancel notice and you think you paid the bill. We’ll work on your behalf to get things straightened out… BEFORE your insurance lapses.
Sorry … that’s NOT covered by your insurance!
Friday, January 15th, 2010In the past few months, I’ve come across numerous articles highlighting the findings of new research by the National Association of Insurance Commissioners. I found the report so shocking that I wanted to get the information in your hands as soon as possible.
Get this
In spite of ALL the publicity surrounding the uninsured flood damage from Hurricane Katrina, we’ve discovered that one out of every three homeowners incorrectly believes that flood damages would be covered by their homeowner’s insurance policy. You need to know that the typical property and liability policy does NOT cover home damage from floods, earthquakes, water line breaks, termites, mold and several other perils.
The NAIC survey further revealed these alarming statistics about homeowner misunderstandings when it comes to common loss situations – none of which are covered by standard home insurance policies – such as:
- 68% think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered by their Homeowners Insurance.
- 48% think that Identity Theft is automatically covered.
- 37% think that damages outside of the home, due to a break in the sewer line that connects to their municipal sewer system, are covered.
- 35% think damages from earthquakes are covered.
- 34% think mold damage is covered.
- 31% think termite damage or damages from other infestations are covered.
- 22% think pets stolen from or injured on their property are covered.
What you don’t know CAN hurt you!
The more I read the survey results, the worse it gets. Too many homeowners don’t even understand what type of coverage their insurance provides. Twenty-four percent believe their home is covered for Actual Cash Value, 64% said Replacement Cost, and 12% had no idea at all. This is a very important distinction as Actual Cash Value represents only what it would cost to repair or replace damage to your home and contents “after” depreciation (in case you’re wondering…ACV coverage is generally not a good thing).
Spend a little…Save a lot
The survey showed that a significant number of respondents are rightfully more concerned about being sued today than they were five years ago. Although we’ve been suggesting it to our clients for many years, statistics show that most homeowners – 63% – have never added a relatively inexpensive umbrella liability policy to protect themselves against this risk.
What to do?
If you’re uncertain about your coverage…call us. If you don’t have an umbrella liability policy… call us today!
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