Accident With a Borrowed Car: Whose policy pays?
If you lend your car to a friend and your friend has an accident, it might be your insurance that's on the hook. It all depends on the insurance company that issued your policy. One company's policy may state:"the insurance follows the car"; while another company's policy says the driver's insurance is the primary coverage even though you own the vehicle involved.

Let's take a look at the two different scenarios:

  • If the insurance follows the car and you lend your car to a friend, your coverage is considered the primary coverage. If your friend has an accident, it's your insurance that will pay the claim. If the accident is serious enough to use up all of your policy's coverage, then your friend's coverage, which is considered secondary, might also be used.
  • If the insurance follows the driver, coverage is provided the other way around. If you lend your car to a friend and they have an accident, it's their policy that is considered primary coverage, meaning their insurance company will pay the claim. In this case, your policy would be secondary and wouldn't pay for anything unless your friend's policy limits were used up.

These rules may not apply in many cases if the person borrowing the car happens to be a relative who resides in the same household as the owner OR if the person borrowing the car has "regular use" of the vehicle.  You should read your policy carefully to see what type of coverage applies to you.

Remember these three things: First, always exercise caution when it comes to lending your car.   Second, if you are "regularly using" someone else's car give us a call to discuss other coverage options. Third, if you're ever in doubt about whether you or another driver is covered in any given situation, please call us.

Car Rentals:  Should you purchase rental agency coverage?
If you have collision and comprehensive ("other than collision") coverages on your own car, you are most likely covered if you're traveling in the United States, its territories and possessions or Canada (for example, travel in Mexico, the Bahamas or Europe would not be covered). On Ohio Mutual PPA policies if you have the "Auto Plus" coverage on your policy there is full coverage for a rental car even if you only have liability on your vehicles! Most policies (except business policies) cover any rental car that you drive at no additional premium.  Business cars frequently require an extra premium to afford the same coverage.  We like to recommend that you purchase the insurance coverage offered through the rental company. This eliminates A LOT of headaches should you have a claim and it will not go against your insurance because you are not having to file a claim under your policy. An exception would be an "at-fault" accident as that will show up on your driving record; however, no damages would have to go against your policy. Give us a call before you leave for your vacation to confirm your coverage.

What To Do After an Accident.

  • You've been in an accident.  
  • Stop at once. Never leave the scene of even a MINOR accident.
  • Seek medical assistance and summon police.
  • Do not admit fault. Do not comment about the accident to anyone but your insurance representative and the police.  Never accept or make an offer of cash, check or "private" settlement.
  • Gather accident information. Note the date and time of accident.
  • Obtain information on the other driver including: name, address, phone number, make of car, vehicle license number, insurance company and agent's name and telephone number.
  • Record a description of what occurred.
  • Report the accident promptly to your insurance agent.

Your Home-Based Business: Know Your Coverage

Are you covered?

  • While caring for a child for a fee, the child is injured in your home.  The parents expect you to cover the hospital bills.
  • You replace your friend's car brakes for a "few bucks" and the car is damaged or your friend is hurt in some way.  He expects compensation.
  • A friend slips on an icy walk or trips on a toy while picking up the craft item she paid you to make.  She expects you to cover medical bills.
  • You use your detached garage for a small woodworking business and the garage is damaged in a windstorm.  You want your garage rebuilt.
  • You do word processing for a fee from your home.  Your computer is stolen.  You want it replaced.
  • You are a self-employed sales representative with an office in the home.   While entertaining a client in your home, the client is injured and expects compensation.

In each situation described, the answer is probably "not covered" --- unless you have added specific coverage to your policy for this home business.  Take away the compensation, or business aspect, and each would probably be "covered". Situations like those described can be covered in one of three ways:

  • A business insurance policy may be purchased to cover it.
  • Your home insurance policy can sometimes be broadened to cover it.

Please call us to discuss an questions you may have about a business-type activity in your home and the proper ways to cover this exposure.

Homeowners Insurance: Covering the Bizarre Losses
How broad is your insurance coverage?  In many cases coverage will need to be broadened to provide for the following losses:

  • Lost jewelry or gemstones falling out of jewelry not specifically insured (subject to a policy dollar limit).
  • Loss in value when a gemstone is scratched or cracked (subject to a policy dollar limit).
  • Cameras or other personal items falling overboard from a boat or a capsized canoe.
  • A hot iron falling on and scorching an area rug.
  • A deer crashing through a sliding glass door causing extensive damage to household contents as it struggles to deal with the unfamiliar surroundings of a family room.
  • Raccoon damage (rodents and vermin are not covered).
  • Lost hearing aids, eyeglasses, telescopes, cameras, etc.
  • Spillage of paint, India ink, nail polish, acid, bleach, and other chemicals that damage household contents.

Most home insurance policies list 17 or 18 different perils of coverage for household contents that do not include the above or numerous other bizarre possibilities. Ask us how we can provide the extra coverage you need.

Money Saving Tips

Here are some points to keep in mind to save on your insurance premium:

  • Smoke alarms. Check your policy or contact us to see that you are receiving a discount.  If you don't have alarms, get them.  Not just for the discount, but for your family's safety.

  • Higher deductibles. The standard deductible today is $250.  If yours is lower, you are paying an added charge.  If you choose a $500 or higher deductible, more savings are available.

  • Delete unneeded coverage. Review your policy.  There may be jewelry listed that has since been sold, buildings that have been torn down, endorsements for businesses in the home that are no longer in operation or other unnecessary coverage.

  • Central station alarms. Fire and burglary alarm systems that automatically dial a central station can provide both good security and a significant premium savings.
  • Combine home and auto insurance in one company. Companies often offer a discount on the home and auto insurance or both when carried by the same insurer.
  • Pay your bills on time. Many companies have a late fee of $5 - $15 dollars which can add $60 - $180 to bill annually if monthly payments are made!!
  • If possible, pay your bill in full. Many companies offer a significant discount if the whole premium is paid in full!
  • Keep your credit in good standing. Credit scoring is a significant factor in the type of policy you qualify for as well as the premium the company will charge you.
  • Under insuring is not a recommended way to save premium as it can lead to serious problems settling a claim. Whether it's a question about cost or coverage, we're always willing to review any insurance concerns with you.  Please give us a call.

Umbrella Liability
Why have it? What is it? Who needs it?

Liability lawsuits can be very costly and put your assets in danger of being lost if your home or auto liability limit is not adequate enough to cover the settlement.  Liability insurance pays for injuries to others due to negligent acts by you or another covered person on your policy. 

An umbrella liability policy is designed to give you peace of mind from this concern.  It adds one million dollars (or multiples of $1 million) of protection to the liability limits of your home and auto insurance policy. * Should a judgment against you exceed the limits of that policy, the umbrella picks up the unpaid portion up to the umbrella policy limit.

Persons most likely to purchase an umbrella policy are:

  • "Likely "targets" for a large lawsuit--professionals, business owners, property owners, higher income individuals, etc.

Those who want greater peace of mind knowing that their life savings will be protected from a financially devastating lawsuit.

  • *The umbrella also requires an increase in the liability limit for your boat, rental property, motor home, recreational vehicle, motorcycle, vacation home and others.

Earthquake, Flood and Sewer Back-up
It is a good idea to review some optional coverages you may wish to add to your current homeowners policy.  Flood insurance as well as the sewer back-up and earthquake endorsements are not automatically covered under your homeowner's policy. Please give us a call for pricing.

Flood- Since flood damage is excluded under your homeowners coverage, you should be aware that flood insurance is available from the National Flood Insurance Program through our agency. Please give us a call for a quote.

Sewer Back-Up- This endorsement provides protection for direct loss caused by water that backs up through sewers, drains or sump pump wells. 

Earthquake- Coverage is available with the premium determined by the structure of your home or building. A substantial deductible (often a percentage of the amount of insurance that applies to the destroyed or damaged property) is in effect.

For clarification of your current policy or information regarding the above coverages, please contact us. We welcome the opportunity to evaluate your present needs and to discuss possible insurance improvements that fit your specific needs.