Credit Card Rental Car Insurance is Secondary Coverage!?

The Consumerist posted some information about rental car insurances and credit cards with a great list of the coverages (based on whether it’s a Discover, American Express, MasterCard or Visa card). I thought that perhaps the individual issuers (like Citi, Capital One, Bank of America, etc.) might build off the base insurance so I did some more digging. It turns out that the auto rental insurances offered by your credit card is secondary coverage, not primary coverage.

When I looked at the list of auto rental insurance coverages for Citi cards, I saw that the basics matched the table on the Consumerist. However, this paragraph stood out for me:

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My Insurance Philosophy: Catastrophic Protection

When it comes to insurance, my approach is that insurance protects you against catastrophic events that would otherwise leave you broke. It’s for covering your car against being totaled, covering your home against that one big earthquake or fire or tornado that’ll level it, and for covering the unforeseen medical emergency where your life depends on you pulling out all the medical stops. It’s like the backstop or net at a baseball game. The ball has to get past the batter, catcher, and umpire before it’ll hit the backstop. In most games it’ll never gets that far, but for the one time it does, I bet those fans are glad that net is there.

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 Cars, Insurance, Personal Finance 

Does Marriage Affect Car Insurance Premiums?

When I was younger, I always thought that there were two things that really made a big difference in your insurance premiums:

  • Turning 25,
  • Getting married.

Everyone always told me that my premiums would drop when either one of those things happened because they were strong indicators of safety. Right before I turned 25, I recorded my premiums and then compared them to the premiums after I turned 25. I discovered that my premiums fell by a whopping 20% just for turning 25.

So, when I got married to the most wonderful woman in the whole wide world this year, I thought my insurance premiums would fall as a reward for making her an honest woman. As I went to make adjustments to my policy last week, I discovered there was no field for marital status! I’m not a rocket scientist but something says that I won’t be getting another insurance discount because I can’t even tell Geico I got married.

I went to Kanetix, where I did a series of comparisons to see how personal details affected your premiums, and that form had marital status (quite detailed options too) so I’m surprised Geico didn’t care. Is this true for other insurers as well or was I looking in the wrong place?

 Personal Finance 

Optimizing Medical and Auto Insurance

One of the things I’ve been looking at lately, given the upcoming wedding, was how to optimize our insurance policies because, as we all know, multi-policy discounts are one of the best ways to get a discount. Two auto insurance policies with one insurer generally costs less than two separate auto insurance policies with two different insurers. In actuality, only the medical and auto insurance policies can be optimized because you don’t really share any others. Anyway, I was taking a look at our options and here’s what I came up with.

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Ever Heard of Nonowner Auto Liability Policies?

I hadn’t until I read about nonowner auto liabilities policies in a Baltimore Sun article this past weekend. Nonowner auto liability policies are for folks who don’t have cars but find themselves renting them often enough that having their own insurance is better than taking the one offered by rental companies. According to the Insurance Information Institute, it costs only about $200-$300 a year and is a better alternative than the often $20+ a day prices from rental companies. By comparison, my insurance through Geico, which only covers liability, costs me $605 a year for a 2003 Toyota Celica. Nonowner Auto Liability policies are liability only, which means they only cover damage to the other car and not your own. Luckily, if you rent the car with a credit card, your credit card might offer a collision benefit (which one reason why you should decline the insurance offered by the rental company and rent with a card that offers insurance).

A brief look at on the Geico website didn’t yield any information about nonowner auto liability policies and when I tried with Kanetix (an auto insurance search engine I used when I tried to figure out the relationship with personal information and insurance rates) it wouldn’t let me continue without putting in vehicle information. I think that if you want to take advantage of this you’ll probably have to call up the insurance company directly.

Has anyone heard of this before or know someone who has used it? Seems like a good idea for people who live in cities.


Medical Services More Expensive Without Insurance

This week I went in for a routine dental visit to get my semi-annual cleaning and passed the checkup with flying colors. Today I saw the claim hit my dental benefits website and the disparity between the Fee Charged and the Fee Paid (that is the negotiated price the insurance company agreed to) was a lot larger than I ever expected. My out of pocket expense was a nice $0, as expected for my routine cleanings, and this was the first time I ever looked at my dental claim so I was surprised to see how much less the negotiated fee was compared to the fee charged. (% Diff was calculated as $ Diff divided by Fee Charged)

Line Item Fee Charged Fee Paid $ Diff % Diff
Additional Intraoral Film $21 $4 $17 85%
Intraoral X-Ray $24 $14 $10 42%
2 Bitewing X-Rays $42 $20 $22 52%
Periodic Oral Evaluation $43 $22 $21 49%
Cleaning – Adult $76 $48 $28 37%
Total $206 $108 $98 48%

This was something my friend first pointed out to me whenever he had work done on his car after an accident, that the fee you would normally pay for service is generally higher than the fee you would pay if the insurance company pre-negotiated the fee, but I didn’t think the difference was this high. But, if nothing else, gives you ammunition (and a big of confidence) if you’ve ever considered negotiating fees with your doctor. If the insurance company can get a 48% discount, by haggling a little bit you should be able to knock off a little from the starting price.

The biggest surprise was the “Additional Intraoral Film” item. I accidentally swallowed when they took the first X-Ray so they had to take another X-Ray of my front teeth. To think that it would’ve been $21 to pay for it on my own and a mere $4 otherwise is pretty ridiculous, an 85% difference!

This is a double-whammy for anyone who want to self-insure themselves because not only do they have to pay out of pocket, they don’t pay insurance company negotiated rates, they pay rack rates (to use a hotel booking term). So, if you’re thinking about self-insuring, certainly keep that in mind (and the fact that you have much more leeway than you probably expect when it comes to negotiating the fee itself).


GEICO Paid Out A Fraudulent Claim

I had written a post in which I talked about some companies I love and one of them was GEICO, mostly because they were cheap, and bostonmichelle left the following comment:

You like Geico only because you’ve never had a claim or any other problem. Someone put in a fraudulent claim against me, and [Geico] just went ahead [and] paid them even after:

  1. I submitted professional photos (at a claim shop) documenting the total lack of damage to my car.
  2. I submitted my own photos of my car backed up against a truck of the exact same model of the claimant’s to show there was no way my little car could have damaged his huge truck’s back bumper, and
  3. I spent 2 hours on the phone with various people there begging them to look at the photos and tell me how I possibly could have caused that damage.

So, they pay anyway, and my insurance record gets dinged cuz they did so. I had to pursue this case because there was NO WAY I was going to pay higher insurance because they are so stupid. After spending many hours talking with MANY stupid, lazy people at Geico, I finally get a guy whose wife had a fraudulent claim against her. HE got it and fixed my insurance record. It still showed they paid out, but I was now shown as “not at fault.”

Idiots. I’ve gotten the best deal and the best service of my life going through Costco (one of your other favorites). They use Ameriprise, which has been wonderful so far. Plus, you can pay your premiums with a credit card. I bet you could save even more money with them – plus you won’t risk your sanity, insurance record, or finances should you actually need to use your insurance.

I was pretty surprised to hear this mostly because insurance companies aren’t in the business of paying out a lot of money needlessly, they’re usually on the other extreme, looking for ways to get out of paying for something. So I asked for more details and bostonmichelle provided:

The claim they paid was about $450. It sure would have been cheaper to listen to their customer and not the claimant (they lost me as a client immediately, and I’ve been telling my story ever since), but I’m sure they had their reasons.

There was no police report since we both agreed at the time that there was no damage. I hit the guy while I was rolling from a standing stop – about 1 or 2 miles per hour. He had a dented bumper on his tall SUV, but my bumper (on my short little Sentra) was far too low to do that damage. I had hit his tow package hanging down below his bumper. We both agreed there was no damage. Neither of us had a camera in our cars.

He later sent me a quote for $700 or so from a repair shop. It listed his make & model, so I went to a dealer who let me park up right next to the back of the same model and take photos. I had clearly hit the tow package. If he had no tow package, the front of my car would have gone clear under his truck, which certainly might have damaged MY car -but not his.

I sent those pics in AND I went to Geico’s claim shop which put a measuring tape on the front of my car and took their own pics. There was absolutely no damage to my car at all. They sent those pics in. When I talked with the various Geico people, most didn’t have access to the pics. And, no one WITH access ever called me back.

The one guy who helped me knew what it was like to have a fraudulent claim. He didn’t see the photos either. He just had been through it himself and was sympathetic. I don’t know the insurance business, so I can’t answer your questions any more than that. You can post this email if you like. Anyone who wants to help share the pain of dealing with Geico on a claim is doing a good deed, that’s for sure.

By the way, I have NEVER had an accident – one that was my fault or someone else’s. And, I’m 36 and have my license for 20 years.

Again, I would get the hell out of there, if I were you. At least look into Costco’s service. I think you’ll be pleasantly surprised.

Basically it sounds like the person she hit pulled a fast one on Geico and they fell for it, leaving bostonmichelle holding the bag. While you can’t do anything after the fact, this is why it’s crucial to keep a camera nearby (nice if you have a cell phone camera) to take pictures at the scene of the accident in order to have some sort of proof. Your word is nice but evidence is nicer.


Major Insurers Offer 5 Year Accident Forgiveness Policy

All-State has been touting their accident forgiveness policy, going so far as to use President David Palmer as their spokesperson (24 rules!), but did you know a lot of companies offer this benefit? In fact, All-State’s accident forgiveness plan is only better than the competition if you have their more expensive levels of insurance (7-15% more expensive). With their standard policy, you get the same level of forgiveness as most other insurers – one forgiveness in the last five years.

Who else offers one free accident every five years? Basically every one else.

Here’s GEICO’s accident forgiveness policy:

Accident forgiveness eligibility — In most states, many customers who haven’t had an at-fault accident in the previous five years of being insured with GEICO may qualify for accident forgiveness. GEICO will not increase your premium as the result of your first at-fault accident after qualifying for this benefit. (source)

You’ll notice the “most states” part (which will appear in every insurer’s mention of accident forgiveness), that’s actually not a restriction made by Geico but one made by the state regulators themselves. Some states have regulations that change the rules regarding accident forgiveness but a lot of other insurers offer accident forgiveness for five years of insurance.

That’s one more reason, outside of potential loyalty discounts, why you might want to stick with one insurer instead of going with the cheapest option every few years.

Does anyone know if accident forgiveness is required by some state laws? I see mention of how the rules for accident forgiveness depend on state law but I couldn’t seem to find anything for Maryland when I searched.

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