Following his return from being in the United States, LMI MD, Dr Allan Manning has shared some experiences he had when it comes to insurance in the US, particularly in regards to motor.
Trap with US hire cars when it comes to policy excesses
September 20, 2017
I have been over in the United States over the past month and during that period I had to hire a car twice. The first time they asked if I wanted to buy down the deductible and I said no, I have travel insurance for this.
As part of our corporate travel cover we have A$5,000 which is more than enough for any rental agreements I have seen in Australia.
The second time, I needed the car longer but just to be sure I mentioned I had $5,000 cover and I was then told the self retention was US$17,500. My first thought was how could it be so high, the second was thank goodness I did not have an accident with the first vehicle.
Morale of the story is double check the self retention of any hire car, in any country and pay the extra for the buy down if you do not have sufficient coverage under your own travel insurance.
Also, like an insurance policy, a hire car contract is a legal document and you should read it before you sign it so you are not caught!
Another lesson learned from the US when it comes to motor
September 21, 2017
Like many things in the United States, and particularly when it comes to insurance there a lot of differences. I am looking at motor insurance.
No matter how old you are and/or your level of driving experience you may have in another country, if you are an expat or new resident, it counts for nothing and you start from scratch as if you are a new driver.
In my case, my daughter has been living in Chicago for 5 years studying for her doctorate. Living in the ‘loop’ (central business district) in this city with loads of public transport there was no need to have a car. To complete the degree she has to do a one year residency and she selected Phoenix Arizona as her number 1 choice and got it. Phoenix is like LA in that you need a car to get around. The cost of insurance however, due to the penalty for not having US driving experience is cost prohibitive. She worked out she could catch an Uber to and from work every day and getting groceries etc delivered it would be less than the cost of insurance let alone petrol (gas) depreciation and having the hassle of selling the car when she returns to Australia.
Had she got a US licence when she first went there and had a 5 year clean driving and accident record it would have been around 1/3rd the cost and she may well have got the car for the convenience sake.
The other issue that she discovered was like home insurance, the basic liability coverage limits are ridiculously inadequate. The standard is $15,000 for bodily injury under a comprehensive motor insurance policy. You do not have anything with your registration. If you consider the really high cost of hospital and medical treatment it shows how inadequate such a limit is.
Similar standard low limits apply for third party property damage. I would hate to have the $15,000 limit and cause a semi trailer to overturn.
Yes, you can buy more but to get it to even a $1 million coverage significantly adds to the cost.
When compared to our level of coverage, we are way better off in Australia and New Zealand.