Mark Ling : Thanks Kamlesh, that was a good explanation on rental car insurance. However, I have another question – what happens if there is a property damage?

Response : This is a very intersting question and a much debated issue even in our insurance world. The comparison of car rental insurance for physical damage is interesting, however I would like to talk about the present version of this coverage. Let is compare auto insurance coverage on rental car.
As per the prevaling car insurance regulations, if you have physical damage coverage or PAP coverage on one auto than when you rent a car it would cover the physical damages but you will have to pay the deductible amount on this which is as per your PAP – auto insurance policy. Presently the coverage for nonowned cars moved back to physical damage (where it still is today), thus requiring PAP insureds to carry such coverage on at least one car and to pay their own deductible in order to have physical damage coverage for a nonowned car. The insurance company is not happy with this since their exposure has doubled. They are liable for the car you own and also the non-owned car you drive. The rental companies no longer carry physical damage on their fleets, the PAP insurer is now responsible for the difference between the insured’s deductible and the amount of damage to the rental car—up to the value of the car.
In 1989, an exclusion regarding damage to rented cars was added to the PAP. That exclusion removes coverage (including coverage for loss of use) if the rental company is not allowed by state law or the rental agreement to collect for a loss. Under previous editions of the PAP, the rental company could collect under the named insured’s PAP even if the insured was not legally responsible for the loss, such as in the case of hail damage to the rented car. This exclusion was added to prevent the rental company from collecting under the named insured’s PAP in such situations.
The golden nugget for you here is that you should compare auto insurance coverage and see that you are covered under your auto insurance policy for the physical damage and this will follow you when you drive a rental car. So review car insurance coverage and as long as you have all the coverages, do not worry.

Happy holidays.

Thanks.
Kamlesh

Matt Domian : I am having a problem understanding what are the coverages for auto insurance policy? If I do not know the coverages how can I compare auto insurance quotes or review auto insurance coverage ?

Response : Matt, this is a very good question. Let me explain the basic coverages and then I will give you an idea as to what to compare. A  basic auto insurance policy is made up of five different kinds of coverage:

1. Bodily Injury Liability
2. Property Damage Liability
3. Medical Payments Coverage or Personal Injury Protection
4. Uninsured & Under insured Motorist Coverage
5. Physical Damage Coverage (Collision and Comprehensive)

Depending on the state where you live, you will find difference as to what is the legally required minimum coverage that you need.

All states require that you have some form of liability insurance when operating a motor vehicle. The basic insurance policy covers Bodily Injury Liability and Property Damage Liability. These coverages provide protection if you are found legally responsible for the injury or death of another person resulting from a car accident. Minimum auto insurance policy coverage amounts vary from state to state.

Medical Payments (or “Med Pay”) is an optional coverage that covers medical expenses for you and your passengers if injured in an accident (regardless of fault). Some states require that you carry Personal Injury Protection (a broader form of Med Pay that may include income replacement and disability benefits). Like Bodily Injury Liability, the amount of Med Pay you can purchase also varies from state to state.

Physical Damage Coverage, which is also optional, includes Collision and Comprehensive coverage. Basically, these two coverages protect your own vehicle from fire, theft (including contents), vandalism, or an upset with another vehicle or object – how much or how little you get depends on the value of what you’ve got.

Uninsured & Underinsured Motorist Coverage protects you and your passengers from people driving around with little or no insurance (or hit-and-run motorists). This coverage is required in many states.

Now let me tell you what to companre- first you will compare the coverages offered by the different companies for the same limits and compare the auto insurance rates and final premium charged by each one of them. Once, you have done this compare the other benefits given by each one of them – any additional coverages or services like road service, any electronic monitoring device for free. Last but not least compare the service reputation of the inusrance company. Many people worry about the stability and economic standing of the insurance company, however, this should not be a concern for the customer since the insurance regulatory bodies take care of this. Review auto insurance coverage and choice the right option for yourself.

Mark Ling( Tampa, Florida) : I would like to review my auto insurance coverage? Do you think I should take car comprehensive coverage?

Review car insurance

Response: Mark Ling, you should review car insurance at least 2 times a year. Review car insurance quote and also your auto insurance coverage. You will save money and also get a better auto insurance coverage.

Comprehensive coverage covers your vehicle and other vehicles for all losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire, or animals. It pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as high a deductible as you feel comfortable paying out of pocket. Coverage is limited to the terms and conditions contained in the policy. This is not required by a state, but if you have a loan or a lease then the lien holder will require it.

If your car is financed or leased, the finance company will probably require that you carry this coverage.
If you have a newer vehicle or one in excellent condition, you may need this coverage to replace or repair the vehicle in case of loss. I would personally advise you to take this coverage only if you have a new car or one with a high market value.
If you have an older car or one in poor condition, you may not want to pay for this coverage.
God bless.