I've just joined Zipcar and have never owned a car, so the whole area of auto insurance is new to me. Does it worry anyone that third-party liability coverage (for passengers in your car, passengers in other cars in an accident) is limited to $20,000 each person, $40,000 total (so if there are 3 passengers, coverage for medical care, liability claims, etc, is limited to $13,333 each)?

This seems very low to me. I know when I rent a car, my credit card provides significant extra coverage, but this doesn't apply to Zipcar. Does anyone know if you can get external coverage for this risk?

-- Anonymous, April 11, 2003

Answers

I am not providing an answer which constitutes legal advice, for which you should obtain legal counsel, but everyone (not only automobile drivers) should consider obtaining "umbrella" liability coverage on their homeowner's (or renter's) insurance policy. A decent minimum amount to consider might be $ 3,000,000. You should contact your underwriter or insurance broker for further information.

Further, I am not aware of any credit card which provides any coverage for liability to third parties. Rather, some credit cards provide some coverage for collision damage to the rented vehicle.

Regards,

Edward Reiner

-- Anonymous, April 24, 2003

The limits you described are (or better be) minimum required 3PL limits for the state in which your ZipCar operates. There are a lot of folks driving around with the same limits.

To my knowledge, credit cards often provide collision damage insurance which covers the cost of damage to the car you rent. Only in the situation of corporate accounts do I see credit cards providing supplemental 3PL coverage. After all, if we could all get supplemental insurance above statutory limits for free...why pay the insurance company.

There is a chance your credit card offers supplemental 3PL excess over limits it assumes you have. In that case, you *might* be able to make a case for add'l limits should you use said credit card to pay for your ZipCar. This is a big *guess* on my part and should not be taken as fact. Also, your card may require underlying limits before it offers 3PL limits (i.e. no add'l insurance coverage if you don't have insurance).

As Edward mentiond, personal umbrellas are not out of the question now a days. Consult your insurance broker for pricing details.

-- Anonymous, April 25, 2003

Thank you, Ed, for your general insurance advice. Not only is the homeowners or renters insurance add-on a convenient way to get the additional coverage, but it is often the most economical. I get mine through Horace Mann (Teachers), and it is a real bargain.

-- Anonymous, April 25, 2003