Does My Parents’ Insurance Cover Me If I Rent a Vehicle?

Name: Noyes Hall & Allen Insurance
Address: 170 Ocean St, South Portland, ME, 04106
Telephone: 207-799-5541

Posted on April 27, 2017March 27, 2019 by Bob O'Brien

You may be listed as a driver on your parents’ insurance policy. The car you drive may be on that policy, too. But you may not be covered to the same extent your parents are.

Note: This information is based only on personal auto insurance policies in the State of Maine using ISO coverage forms. Most insurers that sell through independent agents use these forms. Many “direct writers” use proprietary forms, which may differ. Check with your own agent to be sure.

Are You a “Resident”?

That’s the big question. If you’re a member of your parents household, you have all of the coverage that they do. If you’re not considered a “resident”, then you’re only covered to drive the vehicles listed on your parents’ policy.

So, what’s a “resident”? That line can be tough to define. If you’re a full-time student who returns home between school terms, you’re still a “resident”. If you’re not in school, and have a place of your own with a lease or utilities in your name, you’re not a resident of your parents’ household. Those are the two ends of the spectrum. The middle can get muddy.

Renting a Car

If you’re a “resident”, you’re covered on your parents’ policy just like they are. For Maine residents, that means the liability and physical damage coverage applies to a rental car (in the U.S. and possessions, and Canada). You may be responsible for other expenses, and there are some holes in coverage. But, many Mainers take their chances and waive the rental company’s insurance.

If you’re not certain that you’re a “resident”, we recommend that you buy the insurance from the rental car company. You don’t want to be responsible for damage repairs, lost income and any liability from an accident while you’re driving the rental car.

If you’re thinking of renting a car, and you don’t have an insurance policy in your name (not just a driver), contact the insurance agent or company whose name is on that policy. They can advise you about your personal situation. If you’re driving a vehicle insured by Noyes Hall & Allen, call us at 207-799-5541. One of our agents will be happy to help.

Should I Pay a Small Insurance Claim Myself, or Report It?

Posted on April 25, 2017March 27, 2019 by Bob O'Brien

You clip your mirror on the garage door frame. Your daughter hits a golf ball through your neighbor’s window. Your shower drain leaks, staining your kitchen ceiling. Should I file an insurance claim, or just pay it myself? How much will my insurance rates go up if I file a claim? Clients often ask us questions like this.

The answer may depend on your individual financial circumstances, insurance policy and who else was involved.

Definitely File an Insurance Claim If:

There’s even a CHANCE anyone was injured. Even if someone says at the scene that they’re “fine”, they can always claim that the injury wasn’t apparent until later. Sometimes, that’s the truth; other times it’s bogus. Insurance adjusters are experienced at weeding out legitimate claims from fraudulent ones. If you delay reporting the claim to your insurance company, you may jeopardize their ability to adjust the claim. They can refuse to honor your claim or defend you in that case.
The other party seems antagonistic or dishonest. Difficult people are hard to satisfy; and not everyone is as honest as you are. You may think that their damage or injury is minor, and offer to pay it, only to have them increase their demands. If you promise to pay something, and then turn it over to your insurer, you’ve taken away their ability to settle properly. You may find yourself on your own to pay.

Think BEFORE Reporting an Insurance Claim

Once you report a claim, it’s on your record – even if it ends up being uncovered, below your deductible, or you end up paying it yourself. And insurers consider claims when pricing your policy. Some insurance companies even charge you more for claims when nothing was paid.

Wait…I get charged extra for saving the insurance company money by paying for my own damage? Is that fair? It sure seems wrong at first thought. Insurance companies might argue you’re more likely to have a claim if you’ve already had one. And the next one might not be so small. They need to collect more premium with the expectation of that future claim. You might say “what’s the point of having insurance in the first place?”

We’re not defending the insurance companies that charge for “no payment” claims. But, as independent insurance agents, we can advise you which companies DO charge, and how reporting a claim might affect you.

Here’s the thing: if you talk to an insurance company about a claim, they have a record of it. And, it may be used against you. If you buy your insurance directly from an insurance company (instead of an agent), you’re talking to an insurance company employee EVERY TIME you call, email or go onto their web site.

How Much Will My Insurance Go Up After a Claim?

It really depends. An accident surcharge is a percentage of your premium. So, if you’re paying higher rates (because of expensive vehicles, young drivers, prior accidents or violations, etc.), your increase will be bigger than someone with a lower rate. Every insurance company charges a different percentage, and for differing terms. We’ve seen increases as small as 5% for 3 years, and as high as 50% for 5 years. Unfortunately, insurance companies don’t publish accident surcharge info, which would allow us to quote “what if” scenarios. But, we have enough experience to know which companies surcharge the most.

So, Do I Pay a Small Claim Myself, or Not?

That’s an individual decision, based upon your financial situation, risk tolerance and insurance status. You and your neighbor may make very different decisions. You might even make a different decision next year than this year. Your agent can provide as much information as they’re able, but the decision is ultimately yours.

If I’m Not Going to Put in a Small Insurance Claim, Should I Increase my Deductible?

Now you’re thinking. Higher deductibles even reduce the temptation to file a smaller claim. You also save money by choosing higher deductibles. Some companies offer larger savings than others. Your insurance agent can quote “what if” scenarios for you. Obviously, you don’t want to choose a higher deductible than you’re comfortable paying “out of pocket”. But, deductibles can be a useful risk financing tool.

Live in Southern Maine and have questions about your auto or home insurance? Call a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541, or click the chat button below. We represent many different insurers. We’re independent and committed to you.

What is Accident Forgiveness on an Auto Insurance Policy?

Posted on April 21, 2017March 27, 2019 by Bob O'Brien

You’ve probably seen the insurance company ads on TV. “We won’t raise your rates after an accident”. Insurance companies call that “accident forgiveness”. And it’s REALLY important for drivers who rarely have accidents.

What Is Accident Forgiveness?

Auto insurance companies raise your rates for 3 – 5 years after an accident. Some insurers waive the extra charge if it’s your first accident with them, and you’ve insured with them for 3 or 5 years. Some only waive the rate hike if your driving record is squeaky clean. This rewards good drivers who have one bad moment. It’s also intended to encourage your loyalty to the insurance company.

How Much Does An Accident Raise My Auto Insurance Rates?

An auto insurance accident surcharge is a factor, not a flat dollar amount. Each insurance company decides how much and how long to surcharge. So, the cost varies by company and by client. We’ve seen increases from $100 to $600. The average is about $225 per year for 3 to 5 years.

Do I Lose Accident Forgiveness if I Switch Insurance Companies?

Yes, but you might be able to buy it back. Our South Portland Maine insurance agency represents 9 major auto insurance companies. Of those:

TWO allow you to “earn” Accident Forgiveness by not having claims. They don’t charge more for that benefit, but it takes 3 – 5 years to qualify.
FOUR sell optional Accident Forgiveness to new customers. That waives your first accident even if you’ve only been insured by that company a short time.
THREE don’t even offer Accident Forgiveness; they raise your rates after an at-fault accident.

How Much Does Accident Forgiveness Cost?

Of the four insurers we represent that sell Accident Forgiveness, only one sells it a la carte. The other 3 include it in a bundle of optional coverage. Either way, it costs between $80 and $120 per year to add Accident Forgiveness to a multi-vehicle policy. That’s about half of the $225 average rate hike after an accident.

The Secret That Makes Accident Forgiveness So Valuable

Many people don’t know this: most Maine auto insurance companies surcharge for not-at-fault accidents in addition to at-fault ones. This is a recent development, and it baffles people.

Why does the insurance company raise your rates when it wasn’t your fault? Insurers have convinced the Maine Bureau of Insurance that folks who’ve had any accidents – even not at fault – are more likely to have another. We can’t defend the data, and we don’t make the rules. But we can advise you how to play the game.

The “not-at-fault” accident charge can be almost the same as an at-fault accident. We’ve seen increases from $125 to $300. The average is about $225.

Accident Forgiveness, is a “get-out-of-jail-free” card that allows you to avoid the rate hike. That makes Accident Forgiveness even more valuable. Interesting side note: the insurance companies that don’t offer Accident Forgiveness are the same ones that don’t charge for not-at-fault accidents. They also tend to have smaller rate hikes after an at-fault accident. All are smaller, regional insurance companies.

If you live in Southern Maine and have questions about your auto insurance, call Noyes Hall & Allen at 207-799-5541 or click the chat button below. We’re independent and committed to you.