Archive for September, 2011
If you plan on renting a car for an upcoming business trip or vacation, you will inevitably face the question of whether you need to purchase rental car insurance coverage. The first thing you should do is check with your existing auto or homeowner insurance carrier if your current insurance policy will cover damage to the rental car as well as the loss of personal property. If you already own a car and your car insurance policy includes collision and comprehensive coverage, it should be enough to cover you when you rent a car.
Another possible source of coverage you wouldn’t think of is your credit card company (provided you are planning to charge the cost of the rental car on your credit card): one of the cardholder benefits frequently offered by credit card companies is rental car loss damage waiver. Make sure to read the conditions for this type of benefit offered by the credit card company: they may deny you the coverage if you fail to notify them promptly about an accident (usually you should do so within 45 days).
You should still consider purchasing a separate rental car insurance policy if you –
- Plan on driving out of the country (there can be limits to your current insurance if an accident happens abroad)
- You want to protect your valuable personal belongings you are taking with you on a trip (your digital camera, laptop or iPod)
- You don’t want a claim filed on your existing car insurance policy because you will be marked as a high risk driver and your auto insurance premiums will increase as a result. No matter how good of a driver you are, getting behind a wheel of an unfamiliar car (and probably in an unfamiliar area) makes you more prone to making mistakes on the road which may result in a car accident.
As I was signing the agreement to lease my new car, the sales manager at the car dealership offered me to purchase Car Gap Insurance. I was surprised (if not indignant) – paying for a full coverage auto insurance already cost me an arm and a leg, but apparently some supplemental insurance policy was being imposed on me. Basically gap insurance for cars covers the difference between what the car is worth and what the insurance company would pay for it in case it is stolen or damaged beyond repair. Let’s say you leased a brand new car for 36 months, however in 6 months it gets stolen. The auto insurance carrier may determine that the car is worth less than you still owe for it with all your scheduled payments. The difference or the “gap” between what the auto insurance will pay and what you owe on the car can be a few thousand dollars (it’s higher if you didn’t make a down payment or if you own a car that depreciates quickly). For example, if the bank expects to receive $19,500 for the stolen car, and the auto insurance will only pay $17,500 – you will have to cover $2,000 out of pocket. If you purchased the gap insurance, you don’t need to worry about the difference.
Gap insurance cost is comparatively low (I was quoted $19 a month or $228 a year), however because the likelihood of needing it is so small and the gap it’s meant to cover is not usually significant, most car owners prefer to skip buying it. However if you are leasing a car, buying gap insurance may be in your lease contract, since you will be making lower payments and will owe more than the car is worth for a substantial amount of time.
Internet made it easy for consumers to make the right decision when they are shopping around for a new product, service, insurance carrier, school for their children – you name it. If you are about to part with a substantial sum of money, you might as well go online and read some consumer reviews to make sure you’ll get your money worth with this particular product or service you plan on paying for. But as you type a certain brand in Google search, Google kindly provides you with suggestions of things relevant to your query: that’s when a scary word “scam” might come up and raise alert. Who will ignore this kind of a red flag? Becoming a victim of fraud or scam is the last thing you need – life is stressful enough as it is…
The truth is, not everything deemed as direct scam is really scam. Well-established and legitimate brands that have been in business for years can be labeled scammy by a few angry customers because they were dissatisfied with the service, price, or quality. Internet made it easy to provide or get information, but it also made it very convenient to complain. Ripoffreport.com and ConsumerAffairs.com are just two out of hundreds of sites that offer you a chance to vent, express your frustration, and warn your fellow-consumers to stay away from the fraudulent company. And some claims made are really outrageous: you should certainly get wary if the same issue was encountered by a high number of customers who purchased the same product or service; or when money was paid but no service received; or when a bait-and-switch approach was used. But it’s important to differentiate true scam from perceived – there will always be customers who are simply hard to please, ready to write their negative feedback for a 15 minute delay in service or similar minor issues.
Think of a well-known brand and search for it in Google – but for experiment’s sake add “scam” right after the brand. And immediately you will see a bunch of results full of negative reviews claiming that this brand is the biggest scam on earth. Geico has it, New York Life Insurance has it, State Farm Insurance has it, Dell has it, Direct Buy Scam…. It seems like there isn’t a single brand left for which Google would fail to produce some angry consumer reviews in search results. Because that’s in the human nature: if we get an exceptional product or service, we take it for granted (how many of us take the time to go to the review-type of sites to write about our positive experience?), but if our expectations weren’t met, we make sure to do everything to hurt the company that we believe has hurt us.
Don’t ignore bad reviews all together, but always take them with a grain of salt. Think of thousands of happy satisfied customers who are certainly are out there, else the company would be out of business. Ask questions – is Geico right for me? Will I save money with Direct Buy? Is this the insurance policy I am looking for offered at such a good rate by State Farm? Do not hesitate to bug your sales agent or customer service representative – always inquire about hidden rates, or ask for the terms and conditions to be given to you in a written form before shopping for life insurance or any other financial services. No company is 100% perfect – there will always be slip ups, but they shouldn’t be labeled immediately as “scam” or “rip off”. As long as the ratio of positive vs. negative experience remains reasonable, the company deserves to be in business and service your needs.
