Car Insurance

A Guide to Rental Reimbursement Coverage

You’re involved in an accident, your car is wrecked, and your insurer has stepped in to cover the damages. All is well, and you only have the deductible to worry about, but what happens before the car is fixed? How do you continue to get to work every day and take the kids to school when your car is in the repair shop for the next few days or weeks?

That’s where rental car reimbursement coverage steps in. If you have this optional coverage on your car insurance policy, you won’t need to worry.

Keep reading to learn how this coverage option works.

Rental Car Reimbursement vs Rental Car Insurance

Before we go any further, it’s worth clarifying the potential confusion surrounding rental car coverage and rental car reimbursement coverage. The former includes damage waivers, property insurance, and liability coverage and protects you when you are driving a rental car.

You will be offered this type of insurance when you rent a car and can also get it through your current insurance policy or through your credit card, bank account or travel insurance.

As for rental car reimbursement, it is designed to cover the costs of renting a vehicle when your car is in the shop or has been stolen.

Rental car reimbursement only applies if your insurance company is paying for the repairs and those repairs are covered by your insurance policy. It is a coverage option that is typically only available to policyholders who have collision coverage or comprehensive coverage insurance.

What Does Rental Car Reimbursement Cover?

Rental car reimbursement is designed to cover the cost of a rental car, but there are limits. Most insurance companies will only cover you for 30 days and many also set a daily limit, often between $50 and $100. This means that you can’t claim for costs above this or for a rental period that extends beyond it.

In some states and in some situations, you may not even need to add rental reimbursement coverage to your policy as the at-fault driver could be responsible for your rental costs. In the event of a car accident caused by a fully-insured driver, their liability insurance may cover you for transportation costs, while also paying for the damage done to you and your vehicle.

However, there is a coverage limit that means they may not be liable for all the costs you pay to the rental car company. In such cases, having rental car reimbursement coverage on your policy will cover the difference and ensure you’re not out of pocket.

How Much Does it Cost?

The cost of rental reimbursement insurance differs from state to state and provider to provider. Your costs will also be higher if you are deemed to be a high-risk driver and have a history of at-fault accidents and insurance claims. Generally, however, you can expect to pay anywhere from $3 or $4 a month extra to $15 or $20 a month extra.

It’s not a huge amount because the cover provided is very limited. For instance, at $50 a day over 30 days, the insurer’s liability is just $1,500, which is a fraction of the amount they can expect to lose with other coverage options.

How Does the Process Work?

You’re involved in a minor accident and your car is taken to the body shop, now what? If you have rental coverage, you can do one of the following:

1. Pay for it Yourself

When you pay for the vehicle yourself, you have more choice about what car you rent and from where you rent it, and you can also get it as soon as you need it. If you choose this option, just make sure you keep a record of all the costs so you can report these to the insurer and get your money back.

By choosing this method, you have more control and providing you have cover, you shouldn’t encounter any issues when seeking reimbursement. Get the rental vehicle you want, drive it off the lot, and wait for your car to be fixed and your expenses to be covered.

2. Let Your Insurance Company Do It

The second option, and the best option, is to go through your insurance company. They will contact the rental company on your behalf and deal with all of the red tape, ensuring you only get a car that you are fully covered for and providing you with all the necessary details at the same time.

By going through your insurer, you can avoid the hassle and they may even help you to get a better deal. 

It’s worth noting, however, that your insurer will not pay for additional rental car coverage like damage waivers. But as noted already, your auto policy may already provide you with the cover that you need.

Should You Get Additional Car Rental Reimbursement Coverage?

On average, you will use rental car coverage just once in a 10-year period, and you may only need it for a few days at a time. To determine whether this additional coverage option is right for you, simply calculate how much it will cost you on a monthly basis and then compare this to how much it is likely to offer you.

For instance, let’s assume that you are charged $10 a month for this additional option. This means you will pay $120 a year or $1,200 over ten years. Assuming you’re being offered a maximum of $50 per day for 30 days, this means the benefits are capped at $1,500.

If you’re paying $15 a month instead, that’s $180 a year, $1,800 a decade, and more than you will get back. And, in both cases, we’re assuming that you rent a car for the full 30 days at the maximum allowed price, which is somewhat rare. As a result, you can probably overlook this additional coverage option when those are the prices quoted.

Bottom Line: Choosing Insurance Coverage

From car rental coverage and rental car reimbursement to roadside assistance, new car replacement and more, there is no shortage of options for the average driver. 

But as tempting as it is to add all of these options to your auto insurance policy in the knowledge that you’ll be fully covered, the costs can spiral out of control very quickly. You could find yourself spending an excessive amount of money unnecessarily, and at a time when everyone is watching their budgets, that’s never a good thing.

Think about rental car reimbursement carefully and reject it if you don’t need it, even if it is only $10 or $20 extra a month. 

 

 

A Guide to Rental Reimbursement Coverage is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Auto, Car Insurance, Content Marketing Tips

What Is Uninsured Motorist Insurance?

What is Uninsured Motorist Insurance?

If you buy or lease a car, you’ll need to arrange for insurance coverage. Not only is it the law in most states, it will also protect your bank account in the event of an accident. However, if you’re involved in an accident and the other driver doesn’t have car insurance, you could run into problems. That’s the thinking behind uninsured motorist insurance. 

Compare checking accounts here. 

Uninsured Motorist Insurance Basics

If two people who both have car insurance get in a car crash, they exchange insurance information. The other driver’s insurance company generally pays your expenses if you’re in a crash. So what happens if the other driver doesn’t have insurance? There’s no one to pay you, cover your car repair or replacement or foot your medical bills if you’re injured. Your own car insurance may cover those costs, but it depends on the plan.

That’s where uninsured motorist insurance comes in. Uninsured motorist insurance policies offer protection against property damage or personal injury resulting from a run-in with an uninsured driver. There are a lot of bad drivers out there, and plenty of people who drive regularly but can’t afford car insurance. Have a run-in with one of them and you could end up covering your own medical and car repair bills.

In 22 states and the District of Columbia, drivers are required to have uninsured motorist insurance, so if you have vehicle insurance you’re covered in the event of a crash with an uninsured driver. But if you live in a state that doesn’t require uninsured motorist coverage, your regular car insurance policy may not protect you from bills if you’re in a crash with a driver who doesn’t have car insurance.

Check out our budget calculator.

Is Uninsured Motorist Insurance Necessary?

What is Uninsured Motorist Insurance?

If you live in a state that requires uninsured motorist coverage as part of the minimum coverage requirement for all auto insurance policies, you have at least some protection from uninsured drivers. You can always call your insurance company to check on the kind of coverage you have and discuss your coverage options.

If you live in a state that doesn’t require uninsured motorist coverage, the question becomes: Should you buy uninsured motorist insurance as an add-on policy to your regular car insurance? Before you decide, it’s worth pricing it out.

First, you can call your car insurance provider and check what level of coverage you already have against uninsured motorists. Your existing plan may provide some level of protection against medical bills and/or car repair bills resulting from a crash with an uninsured motorist.

If you don’t have any coverage or if you think your coverage levels are insufficient, you can ask your insurance provider how much it would cost you to add uninsured motorist insurance to your coverage package. You can also get quotes from other car insurance companies and opt for the policy that provides the best coverage for the lowest price.

Uninsured motorist insurance can give you some extra protections, too, such as coverage in the event that a hit-and-run driver crashes into your car or in the event that you’re struck by a vehicle as a pedestrian. So even those with built-in protection against uninsured motorists through their regular car insurance may be tempted to add extra coverage.

Related Article: All About Car Loan Amortization

Bottom Line

What is Uninsured Motorist Insurance?

Just because you have car insurance that you’re paying for every month doesn’t mean you’re protected in all eventualities. If reading this article has made you nervous that you might not have enough – or any – protection against uninsured motorists, this could be a good time to get your insurance company on the phone, particularly if you live in a state with a high percentage of uninsured drivers.

Photo credit: Â©iStock.com/bowdenimages, Â©iStock.com/bowdenimages, Â©iStock.com/vm

The post What Is Uninsured Motorist Insurance? appeared first on SmartAsset Blog.

Source: smartasset.com

Car Insurance

How To Get The Most Out Of Your Auto Insurance Coverage

Recent data suggests that the average driver will spend close to $100,000 on car insurance over their lifetime. That’s a staggering sum of money, especially when you consider estimates that suggest Americans will pay over $500,000 in that time just to own, operate, and maintain a car.

$100,000 is a lot of money to spend on something that you may never benefit from, something that you’re only buying because your state authorities told you too. But while car insurance policies are essential, the amount that the average consumer spends on them is not.

In this guide, we’ll look at the ways you can save money on auto insurance premiums and get the most value out of this necessary expense.

Build Your Credit Report

Never underestimate the value of a high credit score and a clean credit report. Not only can it help when applying for a car loan, increasing the value of the car you can purchase and decreasing the interest rates you’re charged, but it will also reduce your car insurance rates.

There is no easy and quick way to turn a bad credit report into a good credit report, but there are a few simple changes you can make that could increase your score enough to make a difference. These include:

  • Stop applying for new lines of credit.
  • Become an authorized user on a respectable user’s credit card.
  • Increase credit limits on your active credit cards.
  • Pay off as much debt as you can, focusing on credit cards and personal loans first.
  • Don’t close your credit card accounts after clearing them.

If you don’t have any credit at all, which is true for many teen drivers getting behind the wheel for the first time, try the following options:

  • Credit builder loans
  • Secured credit cards
  • Lending circles

Choose Your Car Carefully

A new car is a great way to get a high-tech, customized vehicle, but it’s not ideal if you’re looking to save on insurance costs.

New vehicles cost more to insure because they are a greater liability, with more expensive parts and greater overall value. If you want to save on your auto insurance coverage, look for a car that is at least a few years old, has a number of safety features and a high safety rating.

The cheaper, the better, but only to a point. You want something that won’t leave you in complete financial ruin if it’s wrecked in a car accident and you don’t have the insurance to cover it, but something that won’t breakdown every few miles and leave you stranded and broke every other week.

Drive Safely and Prove Your Worth

Your driving record is just as important as your credit report, if not more so. The more at-fault accidents, traffic tickets, and insurance claims you have, the higher your car insurance rates will be.

A single conviction won’t last forever and the impact will eventually dissipate, so even if you have a few blemishes on your record now, just keep driving safely and you’ll be able to reap the benefits before long.

It takes time to prove your worth to insurance companies, but there are a few things you can do to expedite this process. The first is to take a defensive driving course. In some states and for some demographics (mostly seniors and young drivers), you’ll be offered a discount for completing one of these courses.

The next step is to consider a usage-based program. These are offered by most major insurance companies and can track your driving habits to determine what kind of driver you are. If you’re driving safe and doing very low mileage, you could start seeing some noticeable changes in just a few months. The majority of providers will even give you a discount just for signing up.

Pay Everything Upfront

Most policyholders pay their premiums monthly and it may seem like that’s the best thing to do. $100 a month seems infinitely more manageable than $1,200 a year. 

It is an attitude that many people have, and it’s one that often leads to debt and poor decisions.

Millions of Americans have credit card debt because a $200 monthly payment seems more achievable than a $5,000 payoff, even though the former carries a phenomenal interest rate. It’s also why countless first-time buyers rush into getting mortgages with small down payments and high-interest rates, even though doing so could mean they are paying twice as much money over the term.

Whenever you can benefit from making an upfront payment, do it. This is true for your loan debt and credit card debt, and it’s also true for your car insurance premiums.

Many insurance providers offer you an upfront payment discount of up to 5%. It doesn’t sound like much, but every little helps. If you have a $3,000 car insurance policy, that 5% adds up to $150. Add a few more discounts and you can save even more money and make an even bigger dent in your insurance rates.

Combine Policies and Vehicles

Insurance companies that offer multiple types of insurance tend to offer discounts when you purchase several products from them.

Known as multi-policy discounts or “bundling”, these offers are common with homeowners insurance and auto insurance, but they are also offered with renters insurance and life insurance.

You can combine several vehicles onto the same auto insurance policy, as well, saving much more than if you were to purchase separate policies.

These discounts are essential for multi-car households, but they are not limited to cars. Many insurers will also let you add boats, ATVs, motorcycles, and other vehicles onto the same policy.

Shop Around

Before you settle on a single policy, shop around, compare as many car insurance quotes as you can, try multiple different insurance options (uninsured/underinsured motorist coverage, comprehensive coverage, collision coverage) and make sure you’re getting the lowest rates for the best cover.

Too many drivers make the mistake of going with the same provider their friends or parents have; the same provider they have used for a number of years. In doing so, they could be missing out on huge savings. 

You could be forgiven for thinking that all providers offer similar rates and that the difference between them is minor. But regardless of your age, gender, and state, the difference between one provider and the next could be up to 200%!

Check if You’re Covered Elsewhere

Car insurance companies offer a number of add-ons and optional coverage options. These are enticing, as they cover you for numerous eventualities and some of them cost just a few dollars extra a month. But all of those dollars add up and could result in you paying much more than you need for cover you already have.

Roadside assistance is a great example of this. It will help you if you are stranded by the side of the road, assisting with services such as tire changes, fuel delivery, towing, and more. But if you have a premium credit card or are a member of an automobile club, you may already have that cover.

The same goes for rental car coverage, which is often purchased at the rental car counter. Although it has its uses, if you have an auto insurance policy, travel insurance, and a premium credit card, you’re probably already covered. In fact, many Visa credit cards offer this service completely free of charge when you use your Visa to pay the bill, but only if you reject the waivers sold by the rental car company.

Bottom Line: Best Auto Insurance Companies

​Car insurance coverage varies from state to state and provider to provider. There is no “best” company, as even the ones with consistently affordable rates will not be the best option in all states or for all demographics.

In our research, we found that GEICO was consistently one of the cheapest providers for good drivers, bad credit drivers, and even high risk drivers. GEICO also offers personal injury protection, collision insurance, medical payments, uninsured motorist coverage, and more, making them the most complete provider for the majority of drivers.

However, in some states, local farm bureaus come out on top, offering very cheap bodily injury liability coverage and property damage liability coverage, and giving policyholders a level of care and attention that they might not find with the bigger, national providers. USAA, which offers cheap car insurance to members of the military, also leads the way in the majority of states, but only for those who meet the criteria.

Simply put, there is no right insurance provider for you, just like there is no right coverage. That’s why it’s important to shop around, chop and change your coverage options, and don’t assume that any type of coverage or provider is right for you until you’ve looked at the numbers.

 

 

How To Get The Most Out Of Your Auto Insurance Coverage is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Car Insurance

How COVID-19 is Affecting Auto Loans

COVID-19 is having a massive impact on the global economy and very few industries have been untouched by it. If your business relies on employees working in a physical space and profits only when people are willing to shop and spend, there’s no escaping it. 

It’s no surprise, therefore, that the auto industry has been so negatively affected. In a recent guide, we looked at the many auto loan relief options that manufacturers offering in light of the coronavirus. In this guide, we’ll highlight the ways this industry has been stung by the pandemic and look at what it means for the future of the US automobile and car financing sectors.

How is the Coronavirus Affecting Car Sales?

The automobile manufacturing industry experienced a minor surge at the beginning of 2020 but COVID-19 began to impact sales heavily in March. Many companies, Fiat Chrysler and General Motors included, began the year with strong momentum behind them, but March hit them hard and negated all the gains made during the first two months.

Both of these companies recorded losses for the first quarter of 2020, with Fiat Chrysler losing 10% in total.

Toyota, one of America’s biggest manufacturers, also recorded massive losses for March, with daily sales dropping by nearly a third during this month.

All of this is to be expected. The US has yet to announce the sort of national lockdowns we have seen in countries like the United Kingdom, Italy, Spain, and Greece, but many citizens are in self-isolation, countless businesses have shut their doors, and there are fewer cars on the road as a result.

Combine this with the fact that people are losing their jobs and worrying about their futures, and it’s easy to see why car sales have been affected so severely. 

What are Manufacturers Doing About It?

Automobile manufacturers have moved quickly to stem the rising tide of financial devastation caused by COVID-19. Fiat Chrysler, for instance, is offering improved auto loan conditions to convince consumers to make sizeable purchases and keep the wheels turning. It has also made it easier to purchase a car for those in self-isolation or lockdown.

You can now buy a Fiat Chrysler online, with options for trade-ins, auto loans, and pretty much everything else you would get when buying in person.

They’re making it easier for you to buy because they need you to make that commitment. At the same time, the production of many new vehicles has been halted.

While some plants and showrooms are still open in the United States, Europe has experienced an almost continent-wide shutdown, leading to a decreased demand. 

Manufacturers are also anticipating that things will get worse, as many experts predict that the USA will experience a spread similar to that of Spain and Italy.

How Has COVID-19 Hurt the Automobile Industry?

We have already touched upon some of the ways that COVID-19 has impacted the automobile industry, but the problem goes far beyond people not being able to make it to their local showrooms. Furthermore, if events in Europe are anything to go by, the problems will only get worse and it could be several years before the automobile sector recovers.

Here are a few reasons the industry has been hit hard:

Uncertainty

There is a genuine fear that the COVID-19 pandemic will remain for all of 2020 and even beyond that. It seems unlikely that it will last for that long, but if the country doesn’t go into lockdown and a vaccine isn’t produced, it’s possible. 

With this in mind, many consumers are putting off buying new cars out of fear that they simply won’t need them. New cars depreciate rapidly and can lose 20% in the first year. What’s the point of spending $30,000 on a new car if it will be worth $24,000 by the time you actually get behind the wheel?

Struggling Stock Markets

The stock market doesn’t just impact big companies and investors. It also affects average American families who have their money tied into savings accounts, stocks, and pensions. Savers have lost a lot of money and are worried that they’ll lose even more in the near future, making buying a $30,000+ vehicle incredibly reckless. 

Price of Gas

One of the few things that the automobile industry has on its side is the price of fuel, which has plummeted in the past few weeks. The problem is, no one cares about the price of fuel when they’re stuck inside the house worrying about their health and their jobs.

Closed Plants

Automotive plants can’t simply shut down for a few weeks and then start up again when everything has cleared up. Many plants were already struggling to keep things together and once production stops and their profits disappear, they may close down entirely, taking hundreds, if not thousands of jobs with them. 

Bottom Line: Car Sales After COVID-19

It’s highly likely that the hard times will continue for the manufacturing industry. As the coronavirus continues to spread across the country, manufacturing plants will struggle to retain employees, showrooms will shut, and fewer Americans will be willing to pay the $30,000+ required for a new vehicle.

Whether this impacts the future price and availability of automobiles remains to be seen, but it’s highly likely that we’ll see some massive changes in this industry. America’s best-loved manufacturers will lose millions and could be sent to the brink of financial destruction, while many salespersons and mechanics will likely lose their jobs as demand drops and garages/showrooms close down. 

 

How COVID-19 is Affecting Auto Loans is a post from Pocket Your Dollars.

Source: pocketyourdollars.com