Insurance lingo can be hard to decipher. Even as a full-time insurance professional, I’m still learning new things every day. Over the years, I’ve gathered common questions from my clients. I’d like to share two of those questions to help shed some light on them and help you become a more knowledgeable and empowered policy holder!
1. Are my deductibles set in stone?
Deductibles are the dollar amount you pay out of pocket before your insurance “kicks in” to pay on your behalf. Typically, the more you pay in monthly premium, the lower your deductible. The less you pay in premium, the higher your deductibles usually are.
I find that many of my clients aren’t aware that deductibles are flexible! You often have the option to lower or raise the dollar amount. Some people might change deductibles due to budget issues, premiums, or expenses. Others might lower their comprehensive coverage and raise their collision. Some (like myself) keep them equal.
Play this scenario in your head: if you got into an accident, could you afford to pay your deductible? If not, consider updating your policy to fit your needs.
Pro tip: Ask your insurance representative if he/she can help you calculate how your premium would change if you raised or lowered your deductible (or vice versa) before finalizing an update.
2. Do I need separate rental car insurance?
Rental cars can significantly lighten the financial burden and stress in the event that your primary car becomes undrivable. Rental limits are typically around 30/900, which translates into $30 per day, $900 per accident.
I’m sure you’ve noticed that many rental car companies try to upsell you on extra rental car insurance that is paid directly to the rental car company. I’ve heard so many of my clients wonder whether if extra insurance is required or worthwhile. The majority of my clients opt out of the extra insurance, but it’s important to understand how a claim would be handled in both scenarios to help you make an informed decision.
Your primary car insurance follows the rental, but the extra insurance with the rental company allows you to just drop off the vehicle as-is. For example, if you are relying only on your primary insurance and damage the car, your insurance is responsible for the car’s damage. If you paid for the extra insurance with the rental company, you would have the luxury of just dropping off the rental and leaving. The rental car company would take care of all of the repairs and paperwork, but important to keep in mind: your liability insurance will not cover the loss of revenue for the rental car if it is damaged and has to be repaired. This is also not covered under most credit card coverages either.
Insurance can be confusing. Never be afraid to ask questions and learn more about how it works and what your policy entails. That’s what we (your insurance professionals) are here for! Please let us know if you have questions or would like to learn more about your insurance plan.
About the Author
Desiree Ibarra
Commercial Lines Claims Specialist at Catto & Catto, LLP.