Insurance

greenspun.com : LUSENET : zipcar : One Thread

After much discussion with Zipcar people, it looks like liability insurance is not what I thought it was. If you drive a Zipcar in Massachusetts and hit somebody, you are insured for the state minimum in liability: $5000 of property damage to someone else's car and $20,000 for injuries, etc. to a person.

After that, presumably the lawyers can come after your bank account and your home and future earnings.

I never drove with such minimal coverage in my life and I can't continue to do it in the future. I have cancelled my Zipcar reservations and changed to the Occasional Driver Plan, for emergencies only.

The cost of buying a "Named Non Owner Policy" from an agent is almost as much as insurance if you own a car, if you can find an agent who will even sell you one. It's not a good option. The only solution I see is going to the big commercial rental companies and paying the liability insurance supplement, about $12 a day.

Zipcar, state minimum insurance is not enough. Are there other members who feel this way? I hope you can come up with a solution, because I have really liked the convenience and the whole idea of Zipcars.

-- Anonymous, November 23, 2004

Answers

This is a very disturbing thread indeed. After reading this, I looked through the Zipcar site to verify whether this is true and couldn't find anything to the contrary. I use Zipcars in New York and wonder what the limits are here. I am hoping Zipcar will clarify this for us. In particular, why aren't more substantial liablility insurance packages (similar to the ones offered by big commercial companies) offered by Zipcar as optional coverage at additional cost? I'm assuming that many Zipcar users see the service as a way to avoid owning a car and use Zipcars often. I may have been willing to "take the chance" for a quick trip to the grocery store here and there, but feel less comfortable about the limits of this plan as my primary auto insurance liability coverage.

-- Anonymous, November 24, 2004

Thanks very much for finding this information, even though it's worse than I thought. I've asked Zipcar several times over the years about insurance coverage but had never gotten an answer. I'm not wealthy, but minimal coverage like this won't do it for me.

I'm very much a Zipcar fan and like the concept of car sharing and think Zipcar is a good company, even if I don't agree with its current direction, but I wish Zipcar would be more forthcoming with information such as this. Now I wonder what other surprises are in the Zipcar membership contract.

-- Anonymous, November 27, 2004


I did a little research. The minimums are a little higher in NY State, but judge for yourself if this is enough (or correct me if I'm wrong) - $25,000 for serious bodily injury to one person, $50,000 to two people. $50,000 for death to one person, $100,000 to two.

-- Anonymous, November 28, 2004

Zipcar has been working with our insurers, currently Liberty Mutual, since the company started in 1999, to consistently review and provide levels of coverage that are cost effective, reasonable and safe. During the past 3 years, as our membership has grown and we have more experience with insurance losses, we have been able to strengthen our negotiating position with our insurance providers. Because of this strength, we have been able to provide the same level of coverage, in an insurance market where premiums are increasing over 10% per year, without significant impact on our costs or the prices you pay.

We provide a level of coverage mandated by the state in which you live in. Our goal has been to provide traditional insurance coverage to members, suitable to both their vehicle ownership status (usually none) and driving profile (low annual mileage). It is important to note that our coverage does not stop there. Unlike traditional rental car companies who elect to cover drivers only as a secondary insurer, we have chosen to act as the primary insurer for you and the vehicle. It costs us more, but Zipcar coverage is like having your own auto policy, deductible and all. For most members (95%+) this coverage is more than adequate.

But, as you would expect, as a membership service, we continually listen to your/member requests. Recently, we have been investigating providing additional insurance coverage to members that request it for a small fee. While nothing is in stone yet, we expect to begin piloting these products in early 2005.

In general, our advice to members has and continues to be:

1: Look at the fine print on your credit cards. Many cards (Such as some of the American Express cards) provide additional levels of liability coverage including a deductible waiver. So review the fine print and use the card that provides you with the most coverage for all of your reservations. It's an insurance policy above and beyond the coverage we provide.

2: If you feel that you need additional coverage, have questions, or have additional needs, consult with an insurance broker. A licensed broker is the only agent qualified to assess your individual needs and risk exposures.

We also need your help. One way for Zipcar members to help keep insurance costs down is to monitor and report any damage to vehicles when you start your reservation (remember, it's a Zipcar "rule of the road"). It helps us to reduce un-collected repair costs. It's simple, if there is damage, just call 866-4ZIPCAR when you are on your reservation and leave a message be selecting the "Report Damage" option . It will automatically route your report to the necessary department who will attend to the issue immediately.

We recognize that some of our members have special insurance needs and we will continue to look for ways to help you address those needs. Happy driving, and thanks for being a member.

-The Zipcar Staff-

-- Anonymous, December 22, 2004


Stephen...thank you for your response. I look forward to the new insurance pilot program in the coming year. I'm still a Zipcar supporter and I hope you can resolve the issue.

A couple of questions about your answer: are you sure Amex or other credit cards offer liability insurance? If so, please let me know what card program you're talking about and I'll apply for one right away. I've never heard of anything besides collision, theft, and loss- of-use coverage from credit cards, never liability insurance.

Also, I'd love to hear about an insurance broker who really understands this issue. I've talked to a half dozen who don't know what I'm asking about, then either tell me they don't sell non-owner insurance, or come up with an expensive policy geared towards people who drive company and government cars.

At any rate, I don't think this is such an exotic request, or that state minimum insurance satisfies 95% of Zipcar users. If people thought about the risks of a liability lawsuit, they probably would be afraid of a $20,000 maximum. Thank you for working on a solution.

-- Anonymous, December 22, 2004



This is progress.

As for the credit card coverage for rental cars, I'd look into what it will cover before using it. My MasterCard agreement is now written in plain English but a lot is still not clearly stated and a lot is still left out.

For example, one of my coworkers got into an accident with a rental car and tried to get his credit card company to cover the losses. Turns out he missed one of three deadlines for supplying information about the accident so the credit card company would not pay for the accident. He had to get an attorney and two years later, the attorney got the rental car company to drop the claim over an obscure consumer protection technicality.

Another example would be exemptions from the credit card agreement that are specific to some states. These don't appear in my latest credit card agreement, but Massachusetts used to have several. If I didn't know about those exemptions back then, one or more of the rental car thefts that I had would have been my responsibility. I don't know if the credit card companies still have these exclusions.

Credit cards might not be an easy solution for the Zipcar user.

-- Anonymous, January 25, 2005


I was just looking at my MasterCard credit card agreement and it covers "rental cars" or "replacement cars" but never mentions "car- sharing".

Zipcar describes itself as a "car-sharing" service and uses the term "Zipcar vehicle". The only time "rent" appears on the Zipcar web pages or documents is in the many press releases where the media articles refers to "renting" cars, but Zipcar itself never uses the word "rent".

Is a "rental car" the same as a "Zipcar vehicle" or a "car-sharing" vehicle? Will a credit card cover a "Zipcar" or a "share-car"?

-- Anonymous, January 27, 2005


Moderation questions? read the FAQ