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One of the most common questions that I get the auto insurance agent is “who is insured to drive my car?”
Sometimes the answer to this question can be trickier than most people realize. If you’ve never lend your car to others and you never will, none of the restrictions that I discuss here will matter to you and you can stop reading now.
The short answer:
People who are listed on your policy enjoy the full benefits of the policy coverages without restrictions. For those who borrow your car that are not listed, they are usually covered as long as you have given them permission to use your car; this is called “permissive use” any policies or have some kind of interpretation, permissive use. Excluded drivers are not covered or are un-named drivers “used car without a reasonable belief that a person has the right to do it” (sometimes called “theft”).
Depending on the company you are insured with, interpretation permitted usage can vary significantly and some insurance carriers are very strict implementation of the rules.
By reducing or limiting Coverages through different programs authorized use, carriers can reduce their risk (and claims costs), thus reducing the cost of their policies to make them more affordable for policyholders her.
Three examples of “permissive use” restrictions carriers may be used: “drop-down limit”; “Double deduction”; and “No physical damage coverage.”
drop-down menu Goals
There are often dramatic decline in the coverage amount of insurance even when the authorized user has accident. One such reduction is called “drop-down limits”. “Drop-down range” means that if a person has an accident while borrowing your car, liability limit is reduced to the minimum state are. For example, the state of California requires a minimum limit of only $ 15,000 per person for bodily injury (BI) / $ 30,000 maximum occurrence for bodily injury (BI) / $ 5,000 for property damage (PD).
Example: Driver “A” has the insurance policy with full coverage with authorized use and responsibility Coverages his $ 100,000 per person (for BI) / $ 300,000 per occurrence (for BI peak) / $ 50,000 per occur ( for PD). His policy has “drop-down limit” provision. Let’s say he lend his car to your (driver “B”) and that friend has a serious accident where bodily injuries other parties of $ 65,000 and he totals the car has a value of $ 28,000. In this scenario, the “drop-down limit” is, in fact, most policy A Driver’s pay is $ 15,000 for other persons injury and $ 5,000 for their vehicles which clearly is not enough. In this case, Driver A is legally responsible for the balance of the compensation because he is the owner of the vehicle; $ 50,000 for injuries and $ 23,000 for the vehicle. If Driver B has coverage, their coverage was another and their boundaries would then apply until they run out as well. Otherwise Driver “A” is likely to be sued by the other party.
Double deduction
One coverage that is offered by auto insurance is called collision insurance. Collision insurance protects the car for damage as a result of a collision with another object. Ie another vehicle, building, etc. Collision coverage has a deductible that is “out of pocket” amount you have to pay first before the insurance carrier steps to repair or replace the car. Usually deductibles can range from $ 100 to $ 2,500, but most of the time they are either $ 500 or $ 1,000.
The way “double deductible” restriction works if un-named driver has an accident while driving the car with your permission, collision deductible is doubled. Therefore your $ 500 deductible is now $ 1,000, or your $ 1000 is now $ 2,000. Hopefully your friend borrows your car is ready to chip in and pay the extra deductible amount.
Sometimes the “double deductible” restriction is based on the age of the driver who borrows the car. For example, the deductible for collision only doubled if the driver is under 25 years old.
No Physical Damage Coverage:
This restriction works just like a “double deductible” described above. However, this limitation is much more appealing.
Simply stated, if un-named driver borrowed your car and have an accident the insurance company pays a third party damage (responsibility), but damage to the vehicle will not be eligible for coverage.
All these “permissive use” restrictions are described in detail in the strategy at the beginning and also in the regeneration devices. Also restrictions shouldnt these display by vBulletin agent View when you buy your policy, a Post why you want professional insurance agent View / broker that finish really understand these intricacies effectively and can explain these limits to you when you apply for coverage.
authorized use restrictions are also very common and are employed by some large, reputable general insurance so be sure to check your policy carefully.
auto insurance policy are not any standard. They differ from carrier to carrier and there are a multitude of benefits coverage, limitations and exclusions that are unique to each company. Make sure to consult with an agent to see how a particular strategy works.
Food for thought – next time you are considering purchasing a policy of “online” without human help you, or from “800 #” with “order taker”, consider how details like these may not be sufficiently described or can somehow get lost in translation – it pays to have an agent which can really look out for you.
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Source by Wayne Mccormick