Frequently Asked Insurance Questions

Most policies again will tell you your policy applies only to occurrences within the USA and Canada. No liability coverage will extend to Mexico because in Mexico automobile accidents are considered a criminal offense rather than a civil matter. If you are in Mexico and have an automobile accident and have not purchased through a licensed Mexican insurance company a policy, you may be jailed and may have your automobile impounded.

As a point of interest, many American agents close to Mexico are licensed to sell for bona fide Mexican companies, so get it before you cross the border and have happy memories of your visit.

Some insurance companies will extend your comprehensive and collision coverage into Mexico but only up to a limited miles from the border, generally 100 miles.

Look very carefully under your automobile policy exclusion provisions and you will find very emphatically your automobile insurance will not cover any vehicle rented or leased to others. Don’t take the chance of saying, “well I’ll just let him borrow it and then he can voluntarily pay me later.” Instead, have the friend go to his agent, add it to his policy under a trip permit and add you as additional named insured so in the event there is a claim his insurance company will cover the physical loss and then represent you if there is litigation.

You lucky gal! Keep your money for your next trip home from college. Most insurance companies will consider you a resident of your parents’ home so long as you are under 25. Once you become 25 and are away from parents’ residence you must purchase your own coverage. Remember, you are only covered for the same perils as your parents’ policy covers. Mysterious disappearance of your ten speed or computer isn’t going to be covered unless you had purchased an inland marine rider expressly covering the bike or computer, then there are additional perils allowed for. Talk to your agent.

Actual cash value is amount paid after depreciation and deductible appropriate to the loss. Replacement cost is payment made after appropriate deductible. No depreciation for age or condition is involved. If you choose to not replace items stolen, insurance company will only pay actual cash value even though you may have replacement cost provision. The key word is “replacement.”

Look at the declaration sheet of your insurance and see if you can find the wording “replacement cost” or similar verbiage. If you do, then you will be reimbursed at full replacement cost minus the appropriate deductible once you have replaced the damaged, lost or stolen articles.

They are not covered by the vehicle insurance unless the vehicle itself is stolen, and then only a very limited amount. Your homeowner policy has a provision called extended theft coverage which would cover the personal belongings if they are stolen from your vehicle or from anywhere else in the world for that matter.

Remember in your purchasing insurance there are only minimum limits of liability required by the states. Those limits may be grossly inadequate if a major medical claim is incurred when you are involved with an underinsured motorist, or worse yet an uninsured motorist. A case in point may be helpful.

Mike and Mary were traveling through Oregon on their way to a motocross event in Northern California. They rounded a bend which was marked with a double yellow line for no passing when suddenly, a pickup driven by an itinerant farm worker coming in the opposite direction tried passing the vehicle in front of him. The driver had accelerated to ensure he could get around, but unfortunately he misjudged the oncoming traffic and put his pickup on a full front end collision course with Mike.

When Mike realized what was happening, he steered his vehicle toward the side of the road hoping to avoid the collision. Too late! The pickup sideswiped Mike’s car, spinning him around and off the road. The pickup didn’t sustain enough damage to disable it so the young driver sped away from the scene of the accident. Later, when the highway patrol found him, they discovered he had no license and had borrowed the pickup from a friend who had no insurance.

Mike’s vehicle rolled several times before coming to rest on the side of the road. He had some minor injuries but Mary was pinned inside the vehicle with multiple injuries, some of which were life threatening. Fortunately, the people who witnessed the accident were able to get police and medical attention on its way. Both were airlifted to a hospital where Mike was examined and released. Mary was put into intensive care for lacerations to her face, broken ribs, broken arm, broken leg and two broken ankles.

Over the next year and a half, she went in for multiple surgeries to help her heal from the traumatic experience.

Fortunately for them, they had purchased the highest limits of uninsured and underinsured motorist coverage they could, so much of their medical and subsequent additional living expenses were covered by the insurance company. Nothing was ever collected from the at fault party, and Mary still has to use a cane to get around now five years after the claim.

It should be clarified, many states and insurance companies allow you to opt out of the carrying of uninsured and underinsured medical coverage, but how penny wise and pound foolish someone is to forego that coverage.

Yes, up to the limits of liability you have on your existing policy as shown in your declaration pages. If you are carrying comprehensive and collision coverage on your policy, those coverages will extend as well, with the loss being subject to the appropriate deductibles.

When you purchase the rental car company’s insurance be sure to understand what your coverages are and your responsibility in the event of a loss. One of my insured’s was surprised to find there was no vandalism or malicious mischief coverage available when the car was not in his immediate presence or control. He found this out when he left his rental car in the Ala Moana mall in Honolulu to go shopping and someone ran a key down the full length of his rental. Since he wasn’t there and had no control of the vehicle, the rental company insurance declined the request for payment and required him to make up the difference.

My clients seemed to be split on whether to purchase the rental insurance or provide the rental company with all the details of their private insurance including proof insurance was in force. My experience is the rental insurance is not cheap but if I do have a claim I can just turn it into them and be on my way.

The first place to look to start answering this question is the definition in your policy as to who is an insured. Generally, you will find some wording like this: an insured means you or any relative, or anyone using an insured vehicle within the scope of your permission or within the scope of permission of your adult relative. This does not include a passenger.  Upon further inquiry is found the definition of a relative: a person related to you by blood, marriage, or adoption, who is a resident of your household, including a ward or foster child.

It appears under the first definition of you or any relative, it would appear your 16-year-old daughter does have legal standing to loan the vehicle.

The second part of the definition seems to put some limitations on who is an insured and can give permission for someone else to drive. It states within the scope of permission of your adult relative in which case the answer would have to be no.

It would be a good thing to let your child know you don’t want them letting someone else drive your vehicle under any normal circumstances, and let them use as their excuse for not allowing someone else to drive the definition of an insured not covering their friends as found in the policy.

There is a good possibility if the 16-year-old was at fault and caused damage to your vehicle he could be held liable for it, and since he is under age the damages could be assessed against his parents’ policy.  These kinds of scenarios are what keeps claims adjusting and litigation so impelling.