Category: Auto

While most people take the time before a vacation to research the best rates on rental cars, they generally forget to research insurance coverage for their rental car ahead of time. This can lead to costly mistakes either by being underinsured or by purchasing too much coverage. 

To prevent either of these scenarios, car renters should spend a few minutes before a trip to make sure they are adequately insured.  Your insurance company will inform you as to what coverage on your own car applies to rental cars.  Generally when renting a car for pleasure, your personal auto coverage applies to the rental car.  However, if you don’t carry comprehensive or collision coverage, you will not be protected if your rental car is stolen or damaged in a collision and you should consider purchasing the rental company’s collision damage waiver.

When paying for the rental with your credit card, the company and/or bank which holds the credit card may also provide coverage.  Call the 800 number on the back of your card for more information.  Generally credit card insurance benefits are secondary to personal insurance policies and any insurance offered by the rental car company.  Be sure to ask for a written copy of the credit card company’s insurance coverage information. 

Once this research has been conducted you should have a clear idea if you need additional coverage through the rental car company.  Costs and coverage varies from state to state, however, renters generally have the following products available to them:

Collision/Loss Damage Waiver
Costing between $9 and $19 per day, this “waives” financial responsibility for theft or damage to a rental vehicle other than for accidents involving such factors as speeding or driving while intoxicated. 

Liability Insurance
While rental companies by law must provide a minimum of liability insurance; the coverage is usually so low that it does not provide enough protection.  Supplemental liability insurance costs between $7 and $14 a day for $1 million in liability coverage.

Personal Accident Insurance
For $1 to $5 per day, this offers you and your passengers coverage for medical bills resulting from a car crash. Your health insurance or auto policy personal injury protection may provide adequate coverage. 

Personal Effects Coverage
For $1 to $4 per day, this insures against theft of items in the car.  Your home or renters insurance policy may also provide this protection.

While most parents would prefer to keep their teenagers off the road, you probably won’t have much success encouraging them to withhold from getting that long awaited ticket to freedom. 

Unfortunately, because teenagers are at a higher risk for traffic accidents and tickets, their insurance rates can easily be 50 to 75 percent higher than their parents.  Furthermore, premiums for teenage drivers generally won’t be significantly reduced until they turn 25, get married or both.  In the meantime, they’ll stand to save money by having themselves added to your insurance policy instead of getting their own policy.

Here are some ways to reduce car insurance premiums, courtesy of the Independent Insurance Agents of America:

• Make sure your teen stays in school and studies to make good grades. Many insurers offer discounts to good students.  A “B” average or better in school carries a lot of weight in keeping insurance costs down.
• Sign up your teen for a supplementary driver’s education course.  Many insurers will offer a discount to offset your investment.
• If your teen will be driving a family car, designate one vehicle he or she will drive.  Otherwise, the insurance company will calculate the premium based on the highest risk vehicle covered by your policy.
• Consider a higher deductible. Moving from a $250 to $500 or $1,000 deductible can save you 10 to 20 percent on your premium.  Consider whether you can absorb the extra out-of-pocket expense in the event of an accident.
• Reward safe driving.  More than anything else, an accident- and ticket-free driving record will keep your premiums at their lowest.

As if it wasn’t painful enough to be found at fault in an auto accident, imagine finding out that it was not an “accident” after all.  Each year thousands of drivers become victims of staged auto accidents, and most never realize it.  Criminals plan the accident to appear as the innocent driver is at fault, and then file claims for vehicle damage and personal injury to the at fault driver’s insurance company.

The CPCU Society and the National Insurance Crime Bureau offer the following safety tips to help avoid these scams:

• When driving look beyond the car in front of you. If you see traffic slowing, start applying the brakes – don’t wait for the car in front of you to brake first.
• Allow plenty of space between your car and the car ahead of you so you have time to react to sudden stop.  The general rule is one car length for every ten miles per hour traveled.
• Be especially careful when turning into a lane that allows for two vehicles to turn left simultaneously. People committing staged collisions often prey on cars that cross the center line, purposely sideswiping the victim’s car.
• Call the police to the scene and get a police report, even if damage is negligible. If the police report describes the resulting damage as minimal, it will be harder for the criminal to inflict further damage to their car afterwards and collect a larger claim.
• Carry a disposable camera in your glove compartment and take as many pictures of the other car and its passengers as possible.
• If you suspect a scam, call the NICB hotline at (800) TEL-NICB.

Are you an aggressive driver?  The National Highway Safety Administration has outlined certain common aggressive driving behaviors. 

• Do you find yourself speeding up when someone tries to pass you or weaving in and out of traffic? 
• Have you passed cars on the right or tailgated slower drivers in front of you? 
• Do you flash your lights at a vehicle, use your horn in a non-emergency situation, or make obscene gestures to other drivers? 

If you answered yes to any of the above, you may be an aggressive driver.  Make a concerted effort to avoid those behaviors and set a good example for your passengers.  You never know, avoiding these behaviors might reduce your number of traffic tickets or accidents, and end up lowering your auto insurance premiums!

Most drivers drive faster than posted speed limits, at least now and then, and many speed every time they get behind the wheel.  It does not seem to matter that average speed limits across the country are higher now than they were a decade ago.  Whatever the speed limit is, a substantial percentage of drivers are going to push beyond it; whether it’s because they are running late, because they are not paying attention to their speed, because they have a new sports car or because they just plain enjoy driving fast, and so on.  Clearly, there are not enough highway patrol officers to give speeding tickets to all those who speed, which means that the odds always favor the speeder in terms of not getting caught and ticketed.  

Until they do have a speeding ticket, most drivers give little thought to how this may affect their auto insurance rates.  They may be in for an unpleasant surprise.  To the cost of the ticket itself may be added an even more expensive increase in their auto insurance rates.  In cases of extreme speeding, a driver’s cost for auto insurance could double even on a first offense.

Why do insurers often raise rates after only one speeding ticket?  It’s simple.  Numerous studies by highway safety experts show that “the faster you go, the more deadly it is,” says Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry trade group. “There’s a higher possibility you’re going to cause a lot of damage to people or property.”

If you’re cited for speeding, your insurer may tack a temporary surcharge on your policy for three years.  At one large auto insurer, the surcharge may raise your rate by up to 26% the first year, then will gradually decline and disappear after three years, as long as you have no more moving violations.

The size and duration of the increase varies depending on several factors, including:

• Your driving record and your relationship with the insurance company. Some insurers waive the surcharge if the customer has had a long relationship with the company and previously had a clean driving history.
• Where you live. Insurance is regulated by the states, and different states have different laws regarding rate increases.  Some states don’t allow insurers to impose a surcharge for first-time speeding tickets, while others require insurers to raise rates for some speeding violations.  For example, a single male driver who lives in Phoenix and receives one speeding ticket will experience an average rate increase of 16%, but the same driver will pay no more if he lives in Philadelphia.
• How much you were exceeding the speed limit.  An analysis by USA TODAY found that 10% of ticketed drivers in 2002 were “extreme speeders”-drivers who exceeded 90 mph or 15 mph above any speed limit.  Extreme speeding is considered reckless driving, a major violation. Even a first-time citation can more than double your insurance rates.

Speeding may also affect insurance rates other than for auto insurance.  Insurance companies may look at your driving record when deciding whether you’re a high-risk customer and could charge you higher rates for life, health, disability or long-term care insurance.

On average, auto insurance rates are expected to rise by 6% in 2004, following an estimated 8.5% increase in 2003, according to the Insurance Information Institute.  The average annual cost for auto insurance is estimated to be $898 this year, up $51 from 2003.  Avoiding speeding can keep your costs from going up even more.

Once upon a time in the ancient past-at least 30 years ago, anyway-there was a series of public service ads on television and radio with the overall message, “Speed kills.”  One showed a clock and then a car speedometer pushing up past 65: “Don’t try to catch this hand [the clock] with this one [the speedometer],” the announcer advised.  In other words, it might be better to be late than dead or seriously injured.  It’s been a long time since there was a public campaign aimed at getting America’s drivers to slow down and save lives.  But that doesn’t mean speeding is any safer.  Speeders are still more likely to have accidents injuring themselves and/or others than drivers who obey speed limits.  An increase in insurance rates caused by speeding is troublesome, but even worse is the increased risk of death or serious injury.

Let’s say you are in your 2003 Honda Pilot SUV backing out of a parking space and accidentally back right into another car.  Or you’re driving your 2003 Chrysler Pacifica into a gas station and you swipe a low pole you did not see.  Or you are in your 2003 model Infiniti FX35 or your Cadillac SRX accelerating after coming to a complete stop and another vehicle slams into you.  What do all these accidents have in common?  They involve midsize SUVs driving slowly that sustain major bumper damage. It may come as a shock to learn that these seemingly minor fender benders can result in repair costs as high as $2,814.     

To look at the advertising, you would think SUVs are rugged, but the truth is few have bumpers designed to withstand even a minor bump in a low-speed collision. Eight of nine 2003 midsize SUVs earned poor or marginal ratings for bumper performance in 5 mph crash tests conducted by the Insurance Institute for Highway Safety. Among the nine vehicles tested only the 2003 Honda Pilot is equipped with bumpers that resisted major damage. The Pilot earned an acceptable rating. The 2004 Mitsubishi Endeavor, 2003 Nissan Murano, and 2004 Lexus RX 330 are all rated marginal. The 2003 Toyota 4Runner, 2004 Chrysler Pacifica, 2003 Infiniti FX35, 2004 Cadillac SRX, and 2003 Kia Sorento are all rated poor.

The Institute’s series of four bumper tests includes front- and rear-into-flat-barrier plus front-into-angle-barrier and rear-into-pole impacts. The tests assess how well bumpers can prevent damage in 5 mph impacts simulating the fender-bender collisions that are common in commuter traffic and parking lots. A good bumper system absorbs the energy of these minor impacts and protects expensive body panels, headlamp systems, and other components from damage.

Most of the tested vehicles sustained major damage in minor collisions at a fast walking speed.  Average damage per test ranged from about $400 for the Pilot to more than $1,600 for the Sorento and SRX. Of the 33 current midsize SUVs the Institute has tested for bumper performance, 23 are rated poor, 6 are rated marginal, and 4 are acceptable. None of those tested are rated good.

Three of the poor performers had the largest damage costs in the rear-into-pole test. The rear bumpers on the Chrysler Pacifica, Cadillac SRX, and Kia Sorento were not robust enough to keep damage away from the vehicles’ body parts and sheet metal.  Repair costs in the pole test were about $2,200 for the Sorento and more than $2,800 each for the Pacifica and the SRX. In each case, the tailgate was crushed and needed to be replaced.

The Sorento and SRX were the worst performers overall: Damage to these two vehicles totaled more than $6,500 in all four tests. Even in the front and rear flat-barrier tests, which are the least demanding because the crash energy is spread across the whole bumper, the Kia had repair bills of more $1,000.                       

Infiniti FX35 and Toyota 4Runner also rated poor. After the front-corner test on the Infiniti, more than $2,000 damage was calculated — much of it under the bumper cover. The bumper bar was cracked and bent, the radiator support was broken, and the headlamp assembly needed to be replaced. In the same test on the 4Runner the right fender buckled and the headlamp was crushed in part because the bumper is too short and leaves the corners of the front end unprotected.

The Honda Pilot was the only SUV tested that the Institute rated as having acceptable bumpers. Only the Pilot is equipped with bumpers that did a reasonable job of preventing damage to the vehicle.                   

There are the same inadequate bumpers on many other vehicles.  Of course, auto insurers must factor in the high risk of expensive bodywork for minor accidents when they set insurance premiums, so these costs get passed along to consumers in their auto insurance premiums.  “It’s not difficult or expensive to build a decent bumper,” says Adrian Lund, the Institute’s chief operating officer. “The Honda bumper system isn’t great, but it’s the best of a sorry lot. It shows that manufacturers can build SUVs with bumper systems that prevent costly damage in a minor collision.”

When Mary Smith relocated from a densely populated area of Los Angeles to rural Kentucky, she expected her auto insurance premium to go down considerably.  After all, she reasoned that with far fewer cars on the road the risk of accidents must be lower.  Mary was stunned to find that her auto insurance premium in Kentucky was just about the same.  “How can this be?” she asked.  A big part of the answer came down to one word:  deer.

In many states the continuing explosion in the deer population has lead to a corresponding increase in deer related collisions.  And, there does not appear to be an end in sight, because the deer population continues to grow and urban habitats continue to spread to previously rural environments.

Drivers are indemnified for deer/car collisions under the comprehensive section of their auto insurance, which covers “contact with bird or animal.”  Although these accidents usually cost less than $2,000 per claim for repairs and injuries, costs can run as high as $8,000 or more depending on the vehicle and extent of damage.  According to research by the Insurance Information Institute (III), auto insurers paid nearly $1 billion in deer related claims in 2002.  Ultimately, the entire $1 billion is paid from individuals’ pockets in the form of higher auto insurance premiums.  Even worse than property damage and higher insurance rates are the risks of injuries and even deaths from deer/car collisions; approximately 100 people die and 13,000 are injured each year in deer related accidents.

Most car/deer collisions occur between the months of October and December, but a car/deer collision may occur at any time. Most of these collisions occur either between 6:00 PM and midnight or around sunrise.  As expected rural, two-lane roadways are the sites of most incidents, but deer are also commonly found in densely populated areas.

The following are some tips to help drivers avoid colliding with deer:

• Notice areas posted with deer crossing signs, areas known to have a large deer population, and areas where roads divide agricultural fields and forest lands.  Slow down in these areas.
• Survey the surrounding fields and roadsides as you are driving.  You will often be able to see deer before they get close to the roadway.
• If you see a deer near the road, slow down and blow your horn with one long blast to frighten the deer.
• Keep in mind that if you see one deer there are usually others nearby.
• Use your high beams if no traffic is approaching. They will illuminate the deer sooner than low beams, allowing greater reaction time. 
• If a deer should dart in front of your vehicle, brake firmly but stay in your lane.  Do not swerve to avoid hitting it.  This can confuse the deer on where to run.  It can also cause you to lose control.  It is less dangerous to collide with the deer than to collide with another vehicle or a tree, pole, or other roadside object. 
• Don’t think you are protected from deer/car collisions by using deer whistles or reflectors. According to the Insurance Information Institute, “these devices have not been proven to reduce deer-vehicle collisions.”
• As always, wear your seat belt for safety and for deer-collision safety in particular.  Most people injured in car/deer crashes were not wearing their seat belts.
• If you do hit a deer, don’t get out of the car. An injured deer, frightened and wounded, can be dangerous. If the deer is blocking the roadway call the police.        
• Contact your insurance agent or company representative to report any damage to your car.

Alabama 20,000 average per year
Alaska NA 
Arkansas NA 
California NA 
Connecticut 3,098 (2000)
Delaware 231 (2000) 
District of Columbia NA 
Florida NA 
Georgia 51,000
Hawaii NA 
Idaho NA 
Illinois 22,933 
Indiana 10,904 (1999)
Iowa 13,000
Kansas 9,231
Kentucky 4,000 
Louisiana NA 
Maine 4,055 
Maryland 4,229 
Massachusetts 235
Michigan 66,993 
Minnesota NA 
Mississippi NA 
Missouri 8,112
Montana NA
Nebraska 5,323
Nevada 136
New Hampshire 1,365
New Jersey 20,100 (deer carcasses removed)
New Mexico NA
New York 8,570
North Carolina 12,233 (1999)
North Dakota 3,600
Ohio 31,586
Oklahoma NA
Oregon NA
Pennsylvania 2,564 (2000)
Rhode Island NA
South Carolina 3,326
South Dakota NA
Tennessee NA Texas NA
Utah NA
Vermont NA
Virginia 5,338
Washington NA
West Virginia NA
Wisconsin 45,278(2002)
Wyoming NA 

(1) 2001 data unless otherwise noted
Source:  Insurance Information Institute