Will Your Auto Insurance Come into Play If Your Child Gets into an Accident When Delivering Pizza?

Here's a PIZZADVICE for you about car insurance. If your child plans to use the family car on his or her part-time pizza delivery job, you'll need to check with your auto insurance provider to see if you'd be covered if your loved one were to get into a fender-bender in the line of duty. Insurance trade group officer Don Griffin is among the industry executives who would urge you to find out the answer to that before you hand over the keys to your teenager.

"If your child is delivering pizza as part of his part-time job and is driving your car for business then it's your personal auto insurance policy that's on the hook if there's an accident or some other incident that could result in a claim being filed," according to Don Griffin, vice president of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Ill.

Griffin's advice? "Notify your auto insurer in advance that you're going to let your child use the family car to deliver food as part of his or her part-time job. The insurer will probably charge you extra, but that'll be a small price to pay when considering that if you fail to notify your insurer in advance and your child gets into an accident driving the family vehicle on the job, you may get an unpleasant surprise of no coverage when you file a claim."

Ohio insurance agent Brad Vermilion said many insurers will shy away from covering your child using your family car for delivering pizza. "This type of job creates a lot of risk," points out Vermilion. Uncertainty about determining insurance pricing is a key reason why auto insurers aren't necessarily enamored by the idea of covering a vehicle used to deliver pizza.

"The car is driven to a lot of places at different times of the day and night, and it would be difficult for the insurer to be able to accurately price the risk," observes Vermilion. "You might have to shop around to find a company that would provide protection under that set of circumstances. That could entail purchasing a commercial auto policy, which would figure to be significantly more expensive than your private passenger automobile policy. But it'll definitely be worth the extra money. You'll have some peace of mind knowing that there will be insurance protection if junior gets in a fender-bender backing out of the driveway of one of his pizza delivery customers."

A cautionary message comes from Dave Snyder, vice president and assistant general counsel, of the American Insurance Association, in Washington, D.C. "Maybe," says Snyder when asked about whether your auto insurance policy would come into play in the pizza delivery scenario. "Check with your insurance agent or your insurance company about possible policy exclusions that would be applicable in this situation. There's no substitute for checking with people in the know regarding your personal insurance situation."

Acts of Nature Could Cost You If You Rent a Car

It "Hertz" to tell you this, but major car rental companies like America's largest are passing along the costs of repairing vehicles damaged by "acts of nature or God." (The words in quotes come from text at www.hertz.com.)

Guess again if you think Hertz is inventing the wheel with its policy or traveling a different path than its competitors on this matter. "This is not new for us," points out Richard Broome, Hertz vice president of corporate affairs, in Park Ridge, N.J. "That provision has been in our general contract for about the past year," Broome noted. "Our competitors such as Enterprise have been doing this for quite some time, and now we're implementing this for all our other customers as well," said Broome.

Insurance industry executives Dan Kummer and Janine Gibford weigh in with practical coverage advice. For starters, Kummer issued a cautionary message on the subject of major car rental companies that have changed their contracts to discontinue coverage of damage to vehicles caused by "acts of nature or God" such as earthquakes or floods.

"If you don't check (rental agreements) carefully before signing on the dotted line, you could get burned," said Kummer, director of auto insurance for the Property Casualty Insurers Association of America (PCI), an insurance trade organization based in Des Plaines, Ill.

On the plus side, "acts of God" typically are covered under an auto insurance company's comprehensive coverage, Kummer continued. However, Kummer urges rental car customers "to make sure that you have that protection written into your contract and be sure to ask about that if you have any concerns in that area."

Whether or not you file a claim over damage caused by acts of nature, auto insurance rate increases down the road could occur because of Hurricane Katrina. "That wouldn't surprise me," acknowledged Kummer who said that all sizes and types of insurers "took massive claims hits in the aftermath of Hurricane Katrina's devastation" in Louisiana and elsewhere in the South. (Katrina in 2005 caused some $38 billion in insured property losses and reportedly produced about $1.8 billion in motor vehicle losses in the South.)

There's no shortcut to reading the rental car agreement, according to Janine Gibford, vice president of state affairs for the American Insurance Association, in Sacramento, Calif. "These contracts are often very long and not written in plain language, so that can make it difficult for the car rental customer to understand all the terms and conditions." says Gibford.

Adds Gibford: "It's a good idea to read through the contracts even though they are not exactly written for a layman's edification. If you have questions, find out from your insurance provider what coverages from your personal auto policy will extend to the rented vehicle and then ask the rental car sales representative what portion of the rental car policy covers exposures that your personal auto policy doesn't address."

Here's one last piece of advice from Gibford. "Ask the rental car company what are the coverage exclusions specified in their contract such as damage caused by acts of nature. Do not be afraid to ask questions when the rental company asks you if you want a 'collision waiver.' A 'collision waiver' is something a customer pays extra for, and you probably won't need that protection from the rental car company because that exposure probably will be covered in your personal auto policy. However, that's something you'll want to check with your insurance provider before agreeing to anything about that with the rental car company."

It'll Cost You if You Run over a Nail and Get a Flat Tire

There's bad news and worse news if you run over a nail on your way home from the gym and get a flat tire. First the bad news: You'll probably have to go through the time-consuming process of waiting for a tow truck, buying a new tire, getting it mounted, etc. And now the worse news: You'll likely have an easier time using a toothbrush to clean your windshield in the rain than getting your auto insurer to reimburse you for the cost of the replacement tire.

That's the consensus among insurance industry executives Dave Snyder, Don Griffin and Brad Vermilion. "That's an expense you'll likely have to bear, but the inconvenience of having a flat tire can be mitigated if you have roadside assistance either under your insurance contract or purchased separately," says Dave Snyder, vice president and assistant general counsel, of the American Insurance Association, in Washington, D.C. Snyder says that roadside service typically doesn't cost that much. "But it would be money well spent if you get a punctured tire and have to wait on the side of the road for a tow truck operator who might otherwise charge you quite a bit of money to tow your car a few miles down the road to an auto tire dealer or auto repair shop."

Insurance trade organization vice president Don Griffin brought up a scenario under which a punctured-tire incident just might be covered. "Make no mistake, there is no coverage for a punctured tire sustained on the roadways," emphasized Griffin, vice president of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Illinois.

On the other hand, Griffin continued, "if you hit a nail that is attached to a chunk of wood, and that board flies up in the air and cracks your windshield, the physical damage portion of your insurance contract would pay for the windshield replacement. But you're still out of luck on the tire."

Ohio insurance agent Brad Vermilion takes the hitting-the-nail scenario one step farther down the road. "If you run over a nail or other object, and then sideswipe another vehicle as you try to maintain control of your car, that's when your auto insurance would come into play."