Overlap: Understanding Insurance Limits When Renting a Car on Business
By Mike Drew, The Reschini Group
Your flight had been delayed and you’re running late for an important appointment in a new city. All you want from the car rental stand is to get registered, grab the keys, and follow the GPS to your destination. But what are the rules? Let’s start with the basics – Liability coverage, which protects against bodily injury or property damage to a third-party arising out of the use of a rented vehicle, and Physical Damage, which protects against damage to the rented vehicle.
Liability Coverage – A firm’s liability risk exposure can be protected when renting a vehicle by purchasing Hired & Non-Owned Automobile (HNOA) Liability coverage, which protects the Insured for liability arising out of the use of vehicles within the course of business, which is not owned by the Insured. HNOA would shield the Insured Entity from liability when exposed to employees using their own vehicles on company business (Non-Owned Auto Liability) and employee renting or hiring vehicles (Hired Auto Liability). HNOA Liability coverage is an extremely important coverage to consider if you have employees using their personal vehicles and renting vehicle for business within the U.S.Physical Damage – Hired Car Physical Damage provides protection against costs associated with damages to a rental car when used within the course of business in the U.S., and helps mitigate a loss suffered against the company should that vehicle be rented under the company’s name. Since most vehicles are typically rented under the employees’ name, it is prudent to have the “Autos Rented by Employees” endorsement added to the policy. If employees are using corporate credit cards or their personal auto coverage to opt-out of the physical damage coverage when renting a vehicle for business, please note that coverage may not be sufficient to cover a total loss, thus exposing your organization to possible out-of-pocket expenses.Each year, liabilities assumed under rental agreements have expanded to the point where, if the car spends two weeks in a repair shop following an accident, the renter becomes liable for the rental company’s lost revenue. In addition, storage fees may be passed on to the renter and, under some agreements, the renter may be required to pay for “diminution of value,” or the reduction in resale value for a vehicle that has been in an accident. Responsibility for these damages may be avoided by purchasing waivers offered by the car rental company.To activate coverage, where a credit card used to rent the vehicle pays for the loss if your insurance doesn’t, the cardholder must be the primary renter and must decline the Limited Damage Waiver/Collision Damage Waiver options. Credit card coverage varies, and may change at the credit card company’s discretion. Also, if the renter violates any terms of the rental agreement, credit card coverage is voided. Plus, credit cards may exclude rented SUVs and weather-related damage, like flood and hail.Don’t let the hard sell push you into a decision that’s not right for your particular situation. The professionals at The Reschini Group can help you sort out the best option for you to select when renting a car. Contact us at 724-349-1300 to set up a time to talk.
Copyright 2016 The Reschini Group The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.
Accept the Exceptions: Every Contingency Should Be Covered
By Kitti Peters, The Reschini Group
You may believe that your insurance coverage is so comprehensive, so all-encompassing, that no matter what set of circumstances may arise, you are properly protected.
This assumption, like most assumptions, probably is not accurate.For example, in a recent ruling in federal court, a major national insurer will not be required to cover a $2.8 million judgment that an injured worker secured against a tree trimming company. The judge ruled that a policy exclusion for injuries stemming from the use of equipment mounted to a vehicle clearly bars coverage.A worker at the tree-trimming company suffered injuries after a 63-foot-fall from a boom lift attached to a truck. A commercial automobile liability policy that was issued to the company by the national insurer contained an exclusion for damages "arising out of the operation, maintenance, or use of any equipment" mounted to a vehicle. The tree-trimming company said the incident qualified for coverage nonetheless, arguing that certain terms in the provision were ambiguous, but the judge disagreed, writing that “[T]he court finds that the undisputed facts fall squarely within the exclusion."The federal judge remained unswayed by the tree-trimming company's contentions, concluding that the exclusion applies under the plain meaning of the disputed terms because the worker’s injuries resulted from damage to the boom lift mounted to the company’s truck.Millions of dollars in damages could have been avoided for the much more reasonable investment into the proper insurance coverage. (The damages themselves probably wouldn’t have been avoided, but they might have been covered with the proper insurance). No contingency can ever be truly excluded from consideration. Even if you think your coverage is adequate, it’s well worth the time and effort to find out for sure – and to see if more needs to be done.The professionals at The Reschini Group can help you get a comprehensive picture of your insurance profile. Contact us at 724-349-1300 to set up a time to discuss this important topic.There will always be exceptions. Accept them, and make sure you’re protected in case they occur.
Copyright 2016 The Reschini GroupThe Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.
In the Driver’s Seat: Hired and Non-Owned Auto Coverage
By Mike Drew, The Reschini Group
“Hey, would you mind running these supplies over to the client across town?” asked the supervisor to the employee.
And with that simple question, a series of insurance-driven dominoes began to fall that, before it was all done, taught some valuable lessons in liability coverage and unexpected exposure.The employee used his own personal car to make the delivery, but struck another car in an intersection on the way, resulting in multiple injuries to a third party. In the months to follow, ambulance bills, medical expenses, surgical costs, lost wages, and a variety of other financial considerations began to accumulate – but what determines who pays for them?Well, that depends on whether the employer who made the initial request carried Hired and Non-Owned auto coverage. This subset of commercial auto insurance addresses just what it says – it protects an employer should another party come after it for recovery damages involving cases where an employee drives a vehicle not owned by the employer.Many business people don’t understand the need for this specialized coverage, assuming that the employee’s personal auto insurance would cover damages. While it’s true that a driver’s personal auto coverage may be the first to be tapped, it may not be sufficient to cover the costs of injuries, ongoing medical treatment, pain and suffering, or a fatality.If the person involved in an accident is driving the vehicle because of an employer, even if the employer does not own the vehicle, the employer will be pursued for damages beyond the employee’s personal auto coverage. Hired and Non-Owned coverage provides the protection needed in such situations.Be sure about your coverage. The professionals at The Reschini Group are well versed in commercial auto insurance and how you can be adequately protected, based on your business’ specific situation. Contact us to learn more. Because, simply stated, the complex world of commercial auto insurance can’t be simply stated.
Copyright 2016 The Reschini GroupThe Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.
Watch Those Assumptions
Understanding Excess vs. Umbrella Coverage
By Kitti Peters, The Reschini Group
Assumptions can be tricky. You really need to slow down, look at the situation, and make sure you fully understand all the signals before taking action. Otherwise, you could be facing a problem down the road.
Even things that would appear on the surface to be so obvious, so apparent, so unmistakable, can turn out to be the very things that trip you up later.A great example of the dangers of assuming? Appreciating the difference between “excess” and “umbrella” insurance coverage. They may sound synonymous – and it’s easy to make that mistake, as many people do at first blush – but important differences, in fact, exist.The danger arises in getting caught with a policy that’s restrictive, meaning you may not have the protection you assumed.In its most general definition, an “umbrella” policy can extend to coverage that includes general liability, automobile, and employees – but it is not automatically all-encompassing. Again, generally speaking, an “excess” policy provides additional coverage to specified areas of exposure.Each option has its own specific features and benefits, its own limitations and guidelines. But worse than possibly simply misunderstanding what each coverage option provides, acting on this faulty assumption could prove costly should an event require such a policy to become engaged. In other words, you may not be as well covered as you thought, because the rules of engagement are not necessarily as simple as they might sound.Assuming the difference between “umbrella” and “excess” coverage may, at first glance, sound logical, but never assume. Be sure. Let the experts at The Reschini Group help you make the best choice for your particular situation, so that you have the broadest possible coverage necessary.Copyright 2016 The Reschini GroupThe Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.
Crying Over Spilled Milk
The Importance of Commercial Auto Coverage
By The Reschini Group
Milk. Nature’s perfect food, they told us. Pure and pasteurized, smooth and silky, nothing could be safer or more benevolent, right? Not necessarily.
Say a refrigerated tanker, transporting thousands of gallons of milk, loses control, tips over an embankment and ruptures, spilling that truckload of milk into a nearby stream. At that point, our old friend milk officially becomes a pollutant. It has gone somewhere it’s not supposed to be.While that may sound like an extreme example, it is nonetheless absolutely accurate. Those same standards apply to trucks carrying materials not nearly as harmless as milk, too. In the oil and gas industry, for example, that could include any waste materials or supplies required for drilling, and scores of other liquids and solids hauled by ground transportation.Should materials somehow enter waterways or seep into groundwater tables from accidents and spills, pollution coverage – officially tagged as an Auto Pollution Broadening Endorsement – must be in place for the company transporting those materials. The Auto Pollution Broadening Endorsement provides safeguards and the financial support to satisfy reclamation costs and other expenses resulting from such incidents.And here’s the kicker – if a company does not have this coverage, all of those costs may have to be covered out of pocket, potentially making a very sizeable dent in bottom-line financial performance.It’s a simple fix. Adding the Auto Pollution Broadening Endorsement now is a quick, low-cost way to avoid a lot of pain later. The Reschini Group can help take care of this right now, so contact us to learn more.Then you can relax with a nice cold glass of milk.Contact us today to learn how The Reschini Group helps uncover areas of risk in your business.
Copyright 2016 The Reschini GroupThe Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.