Guest Post: Don't Waste Money on Insurance for Rental Cars

Paying for additional rental car insurance coverage can be a waste of money, according to this guest post from the National Association of Insurance Commissioners (NAIC). Here is the piece, which includes great tips.

"A large percentage of U.S. consumers are confused about whether to buy insurance when renting a car, according to new research by the National Association of Insurance Commissioners (NAIC). In fact, many people purchase insurance at the rental counter without knowing whether their existing auto policies or credit card benefits already cover their needs.

“When renting a car, many consumers purchase unnecessary insurance and end up wasting money. Meanwhile, other drivers inadvertently underinsure their rental car, placing themselves at risk,” said NAIC President and Alabama Insurance Commissioner Walter Bell. “As travel increases around the holiday season, the NAIC encourages consumers to investigate whether their existing auto insurance provides sufficient protection for car rental.”

The NAIC’s national survey of 632 consumers, conducted from Sept. 19-30, 2007, revealed these findings:

* Approximately 42 percent of respondents said they were either thoroughly confused or had only a rough idea about insurance coverage when renting a car.

*34 percent of respondents said they purchased the rental company’s insurance just to make sure they were covered.

*24 percent of consumers were not sure whether their credit card provided insurance coverage when renting a car.

“Drivers should educate themselves before they reach the auto rental counter,” said NAIC Executive Vice President and CEO Catherine J. Weatherford. “Carefully review your auto insurance policy and check with your credit card issuer about auto insurance benefits. Protect yourself and save money by taking a few precautions and asking the right questions.”

Prior to renting a car, the NAIC recommends that renters ask the following questions:
Ask your insurance agent: Are there any situations in which my existing auto policy would not cover a rental car?
Ask your credit card company: What are the limitations on rental car coverage?

Car Rental Insurance Tips from the NAIC’s Insure U Web Site

• Review your auto insurance policy or call your insurance agent before you reach the rental car counter.


• If your current policy doesn’t offer coverage for a rental car, see if an insurance rider can be added for a small fee.


• Many credit cards include some level of collision and theft protection. In most cases, these benefits are secondary to your personal auto insurance or the car rental company’s insurance, meaning the credit card company will only pay claims after other insurance coverage has been exhausted. The NAIC recommends you call your credit card company and ask about benefits.


• If you lack personal auto insurance and your credit card does not provide benefits, it might be wise to purchase the liability insurance and collision damage waiver at the car rental counter.


• Keep in mind that if it is a longer-term rental (e.g., a week, a month or more), there might be limitations on the coverage your existing auto insurance policy provides. Check with your insurance company or agent for details.


• If you don’t own a car, you might want to consider purchasing a non-owner auto insurance policy, because it provides benefits in addition to coverage for a rental car.


• When traveling on business, a personal auto policy will generally not apply, so check with your employer for guidance.


• Know that you are not alone if you find car rental insurance confusing. If you are unclear about the car rental insurance options, or are concerned that a rental company is misrepresenting information, check with your state insurance department.
  
• Get more information about the types of insurance products car rental companies tend to provide, as well as additional auto insurance information by visiting the NAIC’s consumer-education Web site, http://www.insureuonline.org/. You can also get extensive information, tips and considerations regarding life, health and home insurance by life stage. The entire site is available in Spanish at www.insureuonline.org/espanol. "

Source: NAIC
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Bush Health Plan: Rich vs Poor? Washington Post Debates

Clearly, something needs to be done about the availability of health care in America. I know of a waitress (born in Germany, works in Miami), who flies home to Europe to get health care because she can't afford the cost of dental and medical care in the U.S.

It's cheaper for her to buy a plane ticket and fly home than to get treatment in the USA. Some doctors in this country won't even give her a visit because she's a cash-only (no insurance) patient.

But does the new health care plan from President Bush level the playing field between rich and poor? Or will the proposed plan lock more people out of the heath care system?

Those questions are debated today in an excellent article in the Washington Post by reporter Christopher Lee. Here is the link to the article.


Here's a snippet from the article:

' President Bush likes to say that his health-care proposal would "level the playing field" between people who get health coverage through their job and those who buy it on their own.

But experts said yesterday that it would tilt that field toward a kind of health insurance that Bush has long favored -- a high-deductible plan paired with a special tax-exempt health savings account, or HSA.

"I think it would be a big push for HSAs," said Mark B. McClellan, a health economist and former top health-policy adviser to Bush.

While McClellan thinks that would be a good thing, other experts said it would benefit the wealthy and undercut Bush's goal of bringing fairness to the private health insurance system.

In contrast with traditional health plans that typically charge $20 co-payments for visits to the doctor, high-deductible plans require consumers to pay hundreds or thousands of dollars out of pocket for medications, physicians' services and hospital care before most insurance coverage kicks in. The deductibles are steep, at least $2,200 for family coverage, compared with about $220 in a traditional plan. But the special savings accounts enable people to accumulate a tax-free pool of their own money to pay the deductibles and other uncovered health bills, rolling over any unused funds to the following year. And premiums for high-deductible plans tend to be lower.' --Washington Post

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7 Foolish Financial Moves from WSJ

Life insurance for toddlers? Low insurance deductible for your car? Mindless investing of retirement funds? Those are a few of the "Seven Wonders of Financial Foolishness," by Jonathan Clements in Today's Wall Street Journal.

In the article Clements points out:

*Folly: Roughly 36 percent of workers take a pass on company retirement plans.

"To make matters worse, these employees are likely passing up free money. Many 401(k)s match employee contributions at a rate of, say, 50 cents on the $1. If you don't put in your $1, you don't get the free 50 cents from your employer." --WSJ

*Folly: Liquidating retirement accounts before age 60. My bad. Stupid move. Enuf said. Learn from my mistakes.

"Cashing out the account before age 59½. That not only takes a big chunk out of your nest egg, but also it triggers income taxes and usually a tax penalty as well." -- WSJ

*Folly: Low deductible on car or home insurance policy. That's one financial mistake that we have not made: Our old van has a very high deductible. Why pay for small-ticket dents that we can pay ourselves?

"There is no point in having low deductibles on your auto and homeowner's policies. If you put a $700 ding in your car, you can probably cover the cost fairly easily out of your own pocket, so there really isn't much point in paying an insurer to shoulder this risk." -- WSJ

Here's the link to the complete article.
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