Personal Perspective

For years, insurance companies have regularly charged female drivers less for Auto insurance coverage than males. Insurance companies claim it’s because women drivers statistically have fewer car crashes. However, no studies have actually proven that there is a difference between men and women’s driving abilities.

Looking at the stats

During the past 10 years or so, male fatalities have outnumbered female fatalities two-to-one in car accidents, according to the National Highway Traffic Safety Administration. Men also have a higher rate of collisions that result in just property damage — also a two-to-one ratio.

According to the American Insurance Association, men are involved in 50% more fatal crashes per 100 million miles driven than females. This divergence is most prominent in drivers in their late teens and early to mid-20s.

Examining the male crash phenomena

No one can pinpoint exactly why men have more car crashes than women. Many researchers argue nature versus nurture theories. Some researchers blame natural male biochemicals. One study claims that high testosterone levels in men cause them to take more risks behind the wheel. On the other hand, some researchers say that men are products of their culture. These experts say society has taught males to act more competitively in general, which makes them more aggressive drivers on the road. Other studies point out that women are better multi-taskers, which makes them better drivers.

However, many people simply don’t buy into any of these studies. Skeptics say a person’s gender simply cannot predict whether or not they are a safe driver. The National Organization for Women’s Insurance Project points out that men simply have more crashes than women because they drive more miles each year. Because men are on the road more, they expose themselves to more risk.

The gap narrows

Recent statistics show that the gap is narrowing between men and women crashes. Between 1975 and 2003, female fatalities in car accidents increased 14%, while male fatalities dropped by 11%.

Some experts say this is simply because women are on the road more these days. On top of that, an increasing number of women are becoming more aggressive on the road. If this trend continues, experts say insurance companies might soon stop taking gender into account as they calculate drivers’ insurance premiums.

A few states lead the way

Despite the latest research, insurance companies in most states continue to use gender as a factor in calculating premiums. Of course, insurers also take other things into account, including annual mileage, the type of car, the person’s previous driving record, and even their Zip code (whether they live in the city, the suburbs or a rural area).

However, a handful of states, including California, Connecticut, North Carolina and Pennsylvania, no longer allow insurance companies to use gender as a factor to assess risk and calculate premiums.

Even though we know we’ll probably have to face it eventually, it’s a discussion all adults dread: The “Big Talk” about driving with a senior parent or grandparent. No one looks forward to telling their parent or grandparent it’s time to hang up the keys. However, when you notice your aging mom has dropped her driving speeds to 30 mph below the speed limit or you discover that your dear old dad no longer acknowledges stop lights, it’s time to have the talk. If you have an aging family member who shouldn’t be behind the wheel, here are a few tips for broaching this delicate topic with them:

Know the warning signs. If you don’t spend a lot of time with your senior parent or grandparent, you might be uncertain about whether or not it’s time for them to stop driving. However, there are a few warning signs you should keep an eye out for that will help you make the decision. For example, every time you visit, you might notice new dents and scratches on their car, their garage door or their mailbox. They might tell you about multiple near-accidents (although some will claim it wasn’t their fault) or they might continually receive traffic tickets or warnings. They might complain that they often miss street turns or can’t see traffic signs at the side of the road. These are all signs that it’s time to have the “Big Talk” with your senior parent.

Don’t hesitate. It’s natural to be anxious about telling your mom or dad they need to stop driving. Your parents have been telling you what to do for your entire life. So, it’s awkward when the tables turn and you suddenly have to tell the people who raised you what’s best for them. However, look at it this way: Your parent will be better off getting this advice from you and the rest of your family than receiving an order from the state motor vehicle department. As family members and people who love and know them, you and your relatives are the best candidates for telling your parent it’s time to give up driving.

Broach the topic delicately. Once you’ve determined the time has come for the driving discussion, try to get the all of the adults in your family involved. Work together to come up with the best approach for telling the senior driver it’s time to hang up the keys. When you have the discussion with your parent or grandparent, try to keep the conversation adult-like. Do not treat the senior like a child — talk to them as you would about any other adult matter. Instead of being accusatory and saying things like “You did this” and “You’re not doing that,” try to use “I” to describe how you perceive the situation. For example, you might say, “I think you’re having a hard time seeing the road,” or “I worry about you having a terrible accident.” If your parent resists, point out that they have a responsibility to others, as well. You might want to talk about how horrible they would feel if they killed or injured an innocent person because of a driving mistake. Typically, this is enough to convince a person that they shouldn’t be on the road. However, if your parent simply refuses to give up driving and they haven’t had any accidents, you might have to give in and allow him to keep driving for another year. As they are still sharp of mind, they might still be able to manage a car. On the other hand, if your parent has the beginnings of dementia, they should absolutely not be behind the wheel. If your loved one is suffering from the onset of dementia, you might have to sell the car and tell them it just isn’t available anymore or disable the car and tell them it no longer runs. This might seem cruel, but remember — it’s for the safety of your loved one and other drivers.

Be sensitive. Although you might feel tempted to firmly tell your parent, “Hand over the keys!” this is probably not the best way to approach the matter. Try to understand that this is going to be a tough transition for you loved one. After all, how will mom make it to her beauty parlor appointments or to church? How will dad get to the doctor or his poker parties? Try to see things from their perspective, and be sensitive to their feelings.

Many seniors fall into a deep depression after they stop driving because they feel a loss of freedom and control over their lives. This is why it’s so important to come up with alternatives to driving. As you discuss the change with your parent, discuss possible solutions for how they will get around. Maybe you, your siblings and other relatives could take turns driving them to their appointments and functions. Alternatively, you could purchase a mass transit pass for them so they can take the bus or the subway. You might also consider hiring a home-care agency that will transport your parent from point A to point B. Whatever you do, don’t just firmly lay down the law with your parent and banish him or her to their house forever. Put yourself in their shoes, be delicate and offer clear solutions.

According to the National Highway Traffic Safety Administration (NHTSA), school buses represent one of the safest modes of transportation, nearly eight times safer than passenger vehicles. That’s partly because school bus transportation is subject to both federal and state regulation.

However, even though the operation of school transportation is closely monitored, school bus drivers cannot control the behavior of other vehicles on the road. According to a 2006 National Highway Traffic Safety Administration (NHTSA) report, titled Traffic Safety Facts, an average of 20 school-age children die in school transportation-related traffic crashes each year.

In an effort to keep school children safe, GMAC Insurance conducted a survey of 5,524 licensed drivers to find out what misconceptions they had about common laws relating to driving while in the vicinity of school transportation.

According to the survey results, many drivers know they must stop when approaching a school bus from either the front or the rear when the vehicle’s red lights are flashing; however, they are unsure about the exact stopping distance. Only 30% of the drivers polled knew that the correct stopping distance is 20 feet from a bus.

The survey’s findings also revealed other gaps in many drivers’ knowledge about the proper procedures when driving near a school bus. To help keep students safe, GMAC developed the following five tips for drivers to remember:

1. Stay stopped. When a school bus stops and displays its red flashing lights, come to a stop until the lights are no longer flashing or until signaled to proceed by the bus driver or police officer.
2. Keep back. Drivers should stop at least 20 feet (or one and a half car lengths) from the back of the bus.
3. Don’t pass. It is illegal to pass on the right side of the bus, where children are loading and unloading. In many places, school bus drivers can report a passing vehicle.
4. Be attentive. Children might run out into the street when heading home or to the playground without realizing that there are drivers nearby.
5. Go slow. Obey the posted speed limits in school zones where children are often walking or playing and pay attention to crossing guards.

During the past several years, millions of people have begun writing weblogs (or “blogs,” as they are more commonly known.) There are as many reasons for blogs as there are blogs. Some people keep them as a journal to let distant friends and relatives know what’s happening in their lives. Others write about subjects that interest them, everything from gardening to NASCAR. Blogs often act as forums for people’s opinions or news reporting. These types of blogs invite controversy; in extreme cases, they might invite lawsuits if a person or organization takes offense at a particular post. If that happens, can the blog’s author count on his insurance coverage to pay for his legal defense and judgments?

Unfortunately, if he has a typical Homeowners insurance policy, the answer is probably no. This policy pays amounts for which the policyholder (the insured) is legally liable, plus the costs of legal defense, for bodily injury or property damage done to someone else. The policy defines bodily injury as meaning bodily harm, sickness or disease; it defines property damage as injury to, destruction of, or loss of use of physical property. Neither of these definitions includes saying or publishing something that injures another’s reputation or feelings. Consequently, the policy is unlikely to cover a blog post. For example, if Joe writes in his blog that Bob sleeps with a teddy bear, and Bob sues him for invading his privacy, the Homeowners insurance will not pay for Joe’s legal defense or for any judgment against him, because Bob suffered neither bodily injury nor property damage.

Insurance companies may offer special Personal Injury coverage that they can add to Homeowners policies. This coverage pays for the insured’s liability for several offenses, including oral or written publication of material that violates someone’s privacy, and oral or written publication of material that disparages someone’s goods or services. For example, imagine that Joe writes in his blog that the meatloaf at Bob’s Diner tastes like gravy-covered roadkill. Bob suffers an immediate loss of business, and he sues Joe for libel. The court awards Bob $200,000. If Joe has Personal Injury coverage, his insurance will pay for his lawyers and the $200,000 judgment (or his limit of insurance, whichever is less).

Another potential source of coverage is a Personal Umbrella policy. An umbrella provides additional insurance in situations where a loss has used up the amounts of Liability insurance under Homeowners or Auto policies. It also covers some liability losses that those policies do not cover, such as personal injury losses. Umbrellas typically carry a deductible of $250 or $500. In the previous example, if Joe does not have Personal Injury coverage with his Homeowners policy, but he does have an umbrella, the umbrella will pay for his defense and $199,750 of the judgment ($200,000 minus the $250 deductible.) If he does have the coverage on his Homeowners policy, and the court awards Bob $1 million, the Homeowners policy will pay until its limits of insurance are used up, and the umbrella will pay the rest.

Blogs are fun and interesting, and they can be informative. However, in a litigious society, it is very possible that something posted in a blog can result in a lawsuit against the writer. Everyone who writes a blog should consider that possibility and think about buying some extra insurance. Ask our agents about this important coverage!

Hopefully, you will never be served with legal papers and involved in a costly lawsuit. But in the event you are, it will be imperative that you have the insurance to cover your legal liability. That’s where a Personal Liability Umbrella policy can help.

Umbrella policies supplement the Liability coverage you have through Home and Auto insurance and provide an extra layer of security by protecting your assets that might be at risk in a liability lawsuit.

If you don’t have enough Liability coverage from your Homeowners and Auto policies to adequately resolve a claim, the person suing you can go after your home and your other assets to pay for damages. Umbrella policies cover damage claims that you, your dependents, or even your pets might cause.

Umbrella policies kick in after, and pay in addition to, your Auto and Homeowners insurance liability limits. The bulk of the risk is assumed under the primary Auto or Home policy, which enables insurers to offer Umbrella policies at very reasonable costs.

However, most insurance companies will not sell an Umbrella policy unless both your Auto and Homeowners insurance is with them. In addition, your insurer may stipulate that your Auto or Homeowners liability limits be at least a certain amount, such as $200,000 to $300,000. Umbrella policies are generally sold with a deductible that might run anywhere from $250 to $1,000, pocket change if you’re being sued for millions!

Umbrella policies provide much broader coverage in case you are sued, covering you if you cause bodily injury, property damage, or personal injury. Certain Umbrella policies also cover you if you face liability arising from your service on the board of a civic, charitable, or religious organization.

Umbrella policies typically do not cover claims from business endeavors. If you own a business, even a small one, you’ll need to purchase Business insurance to protect yourself from business-related liability claims.

To determine if you need an Umbrella policy, analyze your risk of being sued and the assets you have at risk. Do you have a swimming pool or trampoline that might pose a threat to visitors? Of course, you may decide your personal situation makes lawsuits very unlikely.

Before making any decision, compare the umbrella premium with the cost of raising the liability limits on your Auto and Homeowners policies. It might work to your advantage to raise these current limits by several hundred thousand dollars, and you might come out spending less than you would on Umbrella policy premiums.

If you’re about to hit the road with young kids in tow, listen up. It’s extremely likely that you either have the wrong child safety seat in your car or that your seat is not installed incorrectly. As a matter of fact, nearly three out of every four child seats in U.S. cars show an obvious mistake in selection or installation that could pose a risk to the child’s safety. Of course, with a barrage of different child seat options, safety regulations and complex installation instructions, it’s no wonder parents often get confused. However, one tiny child seat blunder could result in tragic consequences. So before you strap in your precious cargo and get motoring, take a closer look at that child safety seat.

THE RIGHT SEAT. Countless parents make their first child safety seat misstep in the store simply by purchasing the wrong type of seat. Here’s a quick guide on what type of seat you should buy your child:

• Rear-facing seats: Infants should ride in rear-facing child safety seats for as long possible, according to pediatricians and safety experts. You should not switch to a forward-facing seat until your child is both one year old and weighs 20 pounds or more.
• Forward-facing seats: After your child’s first birthday (and the20-pound mark is reached), you can switch to a forward-facing seat. Your child can continue to ride in a forward-facing seat until they’re tall enough that their ears are level with the top of the seatback, shoulders go beyond the top-most harness slots, or they reach the seat’s weight limit, as specified by the seat’s manufacturer. (Refer to the seat’s manual or look on the back of the seat for the weigh limit.) Forward-facing seats typically have a weight limit of 40 pounds.
• Booster seat: Once your child is too big for a forward-facing seat, switch to a booster seat. (The average child typically moves into a booster seat around the age of four.) According to the National Highway Traffic Safety Administration, your child should continue riding in a booster seat until they are 8 years old or 4’ 9” tall. Here’s another way to test whether your child still needs a booster: If they can bend their knees comfortably at a 90-degree angle when seated with their spine flat against the seatback, your car’s shoulder belt straps across the chest (as opposed to the throat), and the car lap belt fits across the hips (not stomach), then they are probably ready to ride without a booster seat.
• Back seat: Once your child is big enough to stop riding in a booster seat, they should ride in the back seat of the car until they’re 13 years old. Of course, they should wear a lap and shoulder seat belt at all times, as should everyone in the car.

Some states have passed specific child safety seat laws, so make sure you know and abide by the law in your state.

THE PERFECT FIT. Another child seat mistake many parents make is the way the harness fits on their child. Experts say many parents do not pull the harnesses snugly enough on the child. To ensure that your child’s harness fits properly, try the “pinch test.” If you pinch the car seat strap lengthwise and there is a loop of any size between your thumb and forefinger, the harness is not tight enough.

PROPER INSTALLATION. Of course, the biggest challenge with child safety seats is installing them correctly. Because every car and child seat is different and installation manuals are often incredibly confusing, parents are bound to make mistakes when installing their child’s seat. Luckily, in 2002, the federal government mandated LATCH (Lower Anchors and Tethers for Children). This system improves child safety by eliminating the need to use seat belts to install a child safety seat in a car, and it also makes the installation process a little easier. Cars with the LATCH system have anchors located in the back seat where child safety seats can easily be fastened. Nearly all vehicles and child safety seats manufactured on or after September 2002 include the LATCH system. However, if you have an older car or child seat, you will still need to use the seat belt to install the seat.

To ensure that your child’s safety seat is installed correctly, find a child safety seat expert in your area. You can find a list of certified CPS (Child Passenger Safety) Technicians and Child Seat Fitting Stations at www.nhatsa.gov or seatcheck.org. You can also call 866-SEAT-CHECK or the NHTSA hotline at 888-327-4236.

Suffering major damage to a home is a traumatic event for any family. The experience brings shock, worry about family members and pets, grief at the loss of treasured possessions, and stress about the overwhelming task of replacing it all. Right on the heels of these emotions comes a more immediate question: Where will the family live now, and how will they pay for it? Fortunately, standard Homeowners policies provide coverage for loss of use of a home.

The standard policy contains three Loss of Use coverages: Additional Living Expense, Fair Rental Value, and Civil Authority Prohibits Use. Additional Living Expense coverage pays for the homeowner’s necessary increase in living expenses when the home, damaged by a covered cause of loss, becomes unfit to live in.

For example, assume that a severe windstorm knocks a tree into a home’s upstairs. It wrecks three bedrooms and two bathrooms, causing pipes to break and damaging electrical wiring. Since the policy covers windstorm damage and the home is unsafe for the family to occupy, this coverage will pay the extra amount the family must spend to live elsewhere for a period of time. However, the insurance company will pay only the amount necessary for the family to maintain its normal standard of living. If the family was not living in a luxury condo before the loss, the company will not pay for them to live in one after. The company will pay for the shortest period of time necessary to repair or replace the damaged property or to permanently relocate.

It is important to note that the insurance pays only for the increase in costs, less any costs that decrease. If the family had a mortgage payment of $1,000 per month, the rent for a temporary home is $1,200, and utility costs are $50 less, the insurance will pay $150 per month.

Fair Rental Value coverage applies to homeowners who rent out part or all of the premises. Should a covered cause of loss damage the home and make it uninhabitable, the insurance will pay the rental value that the homeowner loses. Coverage lasts only for the shortest time necessary to repair or replace the premises, and the company will reduce the payments by the amounts of non-continuing expenses. For example, if the rental value was $1,000 per month but the cost of heat, electricity and water was $400, and all of these services ceased during the repair period, the insurance will pay the $600 difference.

Recently, an airliner crashed into a neighborhood near Buffalo, New York. In addition to the tragic loss of lives, the crash destroyed one home while barely affecting the others on the street. However, law enforcement authorities required occupants of surrounding homes to evacuate for several days while recovery crews cleaned up the site. These families probably benefited from Civil Authority Prohibits Use coverage. This insurance pays for the increased cost of living elsewhere for up to two weeks when civil authorities prohibit the homeowner from using her residence because of direct damage to neighboring premises caused by a covered peril. Once again, the company will pay only the amount above non-continuing expenses and only the cost of maintaining the family’s normal living standard.

The amount of insurance that applies to these coverages is normally some percentage (typically 30%) of the amount covering the home. For example, a policy covering a home for $200,000 would provide $60,000 coverage for the loss of use coverages combined. One of our professional insurance agents can answer questions about them. Plan ahead; it is always much better to find out how much coverage you have before the worst happens.

If you wanted to, you could build a panic room for protection from robbers or kidnappers. But what about protecting your belongings when you’re not home? Perhaps you really don’t want to install an alarm system — or Junebe you do. Either way, here are some no-cost and low-cost tricks to make your protection more complete, and help keep your belongings away from thieves.

Outside Areas

Begin with the landscaping, which is the first thing a burglar sees and the first thing he will assess. To make it harder for a burglar to hide and gain entry:

• Prune lower limbs from any big trees.
• Trim bushes so a person could not use one for cover.
• Move any decorative trellises away from windows or porch roofs so they cannot be climbed for second-floor access.
• Consider planting thorny bushes below first-floor windows, and be sure they are close enough to the house so that an adult could not wedge behind one to jimmy a window without getting scratched up.
• Remove any trees or bushes beside exterior doors. They can hide a burglar from passing cars and they can also hide intruders from your sight when you answer the door.
• Make sure all ladders and tools are secure inside the house, not inside a garden shed.
• If your yard is dim at night, install the brightest, biggest lights you can afford for all entries to your house. Use them. Turn them on when you leave the house at night; set up motion detectors to turn them on when you are away

Inside the Home

Windows generally provide easier access for criminals than doors. Here are some window tactics:

• Buy special window locks at your hardware store for all first-floor windows and any second-floor windows accessible from a porch or garage roof. DO NOT hang the keys on clever little hooks or nails beside the window. Crooks know that one and will simply break a pane and reach around until they find the key (but be sure the whole family knows where the keys are in case of emergency).
• Don’t demonstrate the easiest window to enter by climbing in it. If a family member regularly forgets his or her key, consider leaving keys with a trustworthy neighbor for emergency use. DON’T CLIMB IN THE WINDOW EVER. Even amateur burglars can figure that one out, especially if they’ve seen you do it and figure the neighbors won’t notice.
• For sliding windows, use the same techniques as for sliding doors, below.

Some burglars like to enter like a guest, through the door. Here are some ways to discourage that sort of burglar:

• Make every entry door solid core wood or metal; hollow-core doors are easily kicked in. The door should fit the frame snugly, with no more than 1/8 inch between door and jamb. If the gap is larger, replace the door, or install a heavy-gauge metal strip available at the hardware store.
• Replace doors with decorative glass windows or panels. If that’s too expensive, install break-resistant plastic panes, or install a decorative grille over the glass.
• It’s unlikely, but if an entry door has hinges on the outside, rehang it with hinges inside. If that’s impossible, reinstall it with pinless hinges. Burglars can pop pins and take off the door to enter.
• Make sure locks on all sliding glass doors are sturdy. Then use a solid stick of wood or broom handle in the track of the closed door.
• Adjust door rollers so the door cannot be lifted out of its track.

A Few More Hints

• Close your garage door when you’re away, whether or not it also leads into the house. An empty garage equals “no one’s home.” Cover garage windows completely with shades or curtains so no one will know if there’s a car in there or not.
• Don’t leave notes on entries; if you were home, you wouldn’t leave a note. Not even for FedEx.
• Don’t hide keys in the yard; burglars know all the usual places, even those cute little garden toads with hollow bellies.

With the dawning of Spring, often comes a deluge of rain showers and thunderstorms. Although a soft Spring rain might seem innocent enough from the safety of your home, even a gentle shower can cause major problems on the road. Thousands of car accidents each year are caused by rain and wet roads — and motorists who don’t know how to drive on them.

During and after a rainstorm, a film of water quickly forms on asphalt roads. This sheath of water causes tires to lose traction, which means drivers can lose control more easily. However, slippery roads are not the only danger to driving in the rain. Drivers also lose visibility during a rainstorm. Heavy rain can be blinding, fogging up the windows and even blocking your headlights. These things all add to an extremely dangerous situation.

If you find yourself on the road during a rainstorm, follow these safety tips to ensure you arrive alive:

• Be especially careful when the rain first starts. When the roads are dry for a long period of time, engine oil and grease builds up on roads and highways. As soon as the first drops of rain start to fall, the water mixes with this build-up making the roads incredibly slick. This is why the first few hours of a rainstorm can be the most hazardous for drivers. If the rain continues to fall for a few more hours, the water will eventually wash away the greasy build-up.
• Slow down. You should always drive at a slower speed when the roads are wet. The faster you drive in a rainstorm, the more likely you are to have an accident. Leave the house earlier than usual to give yourself additional travel time so you won’t feel the urge to rush.
• Brake earlier and slower. When you need to slow down or stop on wet roads, ease on the brakes earlier and with less force than you would normally. This decreases your risk of hydroplaning and keeps a safe distance between you and the car in front of you. It also alerts any drivers behind you to slow down. If you stop too suddenly in a rainstorm, you could get rear-ended.
• Turn off cruise control. When you have cruise control turned on during a rainstorm, your car could actually speed up if you hydroplane. Plus, when you use cruise control, you’re probably not paying as much attention to the road. Turn off the cruise control and stay alert at all times when driving in the rain so you can react quickly if necessary.
• Avoid big puddles. If you spot a huge puddle in the road up ahead, drive around it or take a different route. Sometimes, seemingly shallow puddles can actually be five or six feet deep — and that amount of water can cause serious problems for your car’s electrical system. Depending on how deep the water is, it could even float your car. If you aren’t sure just how deep a puddle is, steer clear of it altogether.
• Turn on your headlights. Even if just a few raindrops are falling, turn on your headlights. Not only will this help you see the road, but it will help other drivers see you. However, don’t use your high beams in the rain. This can actually reduce your visibility and blind other drivers.
• Turn on your defroster. Your windshield can fog up quickly during a rainstorm, which can cause you to lose sight of the road. Turn on your front and rear defrosters and the A/C to defog your windows.
• Keep an eye out for pedestrians. In a rainstorm, a pedestrian’s view of the road could be obscured by their rain slicker hood or umbrella — which means they might step into the road accidentally at the wrong time. If you are driving in a city or another area with pedestrians, keep a close eye out for people in the road.
• Pull over when things get bad. If the rain is falling so hard that you can barely see the car in front of you, pull over and wait for the rain to slow down or stop. After all, it’s much better for you to make it to your destination a little late than not at all.
• Don’t brake if you hydroplane. If you feel your car starting to hydroplane, don’t brake suddenly or turn the steering wheel. This could send you into a skid. Instead, ease off the gas pedal slowly and steer straight until you feel your tires regain traction. If you have to brake and don’t have anti-lock brakes, tap the brake pedal lightly. If you do have anti-lock brakes, you can brake normally.

“Bill, can I borrow your truck? I have to pick up a new mattress.” Questions like this are routine. Friends and neighbors borrow and lend their vehicles. College roommates borrow their friends’ cars. Six cars are parked in a driveway at a party and one needs to be moved so another car can pull out. The owner tosses someone the keys and tells him to move it. When situations like these end with an auto accident, whose insurance pays, the owner’s or the borrower’s?

In general, the vehicle owner’s policy is primary and pays first in the event of a loss. If for some reason the owner’s policy does not cover the loss or provide enough insurance to fully cover it, the borrower’s policy will apply. For example, assume that Joe has a policy with an insurance limit of $100,000 for injuries to one person and Bill’s policy has a limit of $250,000. Joe borrows Bill’s car and severely injures a pedestrian, resulting in damages of $300,000. Since Bill owns the car, his policy will pay first. It will pay $250,000 (his limit of insurance,) and Joe’s policy will pay the remaining $50,000. If Bill’s policy does not cover the loss (for example, if he had let the policy lapse), Joe’s policy would pay all of its $100,000, but Bill and Joe might be responsible individually for paying the balance.

The owner’s insurance will also be primary for damage to the car itself. However, the borrower’s insurance can make up for a difference in deductible. Suppose Joe has a $500 collision deductible on his car and Bill’s collision deductible is $1,000. Joe totals Bill’s $5,000 car in an accident. Bill’s insurance will pay $4,000 for the car ($5,000 minus the $1,000 deductible) and Joe’s insurance will pay $500 (Bill’s deductible minus Joe’s $500 deductible). If Bill’s insurance is noncollectable because he didn’t buy collision coverage, Joe’s policy will pay $4,500 ($5,000 minus the $500 deductible).

A person must have the car owner’s permission to borrow before the owner’s insurance will cover him. The insurance company will consider the person to have permission if he had a reasonable belief that he could use the car. For example, if Bill at one time said to Joe, “Take the car whenever you need to; the keys are on my desk,” and Joe had in fact borrowed it several times with no objection from Bill, it would appear that Joe had a reasonable belief that he could use it. On the other hand, if Bill never said anything to Joe about using the car, and Joe had to search Bill’s home to find the keys, Joe’s belief that he could use it might not appear to be so reasonable. In this case, Bill’s policy might not cover Joe’s liability for injuries or damages. Worse, Joe’s policy might not cover him, either.

Permission must come from the vehicle’s owner, not from a member of the owner’s family. Joe will not have coverage if Bill didn’t give him permission but Bill’s teenage daughter told him to use it. However, the daughter has coverage if she borrows the car, with or without permission. A member of the owner’s family has coverage without having to prove they had permission. To be considered a family member, such a person must be related to the owner by blood, marriage or adoption.

Before borrowing someone else’s car, we advise people to do the following:

* Make certain you have the owner’s permission.
* Make certain the owner has insurance in-force on the car.
* Check your own insurance to see if it will cover damages the owner’s policy doesn’t cover.

Our agents can assist you with the third item. Ask the questions ahead of time to avoid unpleasant surprises later.