Monthly Archives: March 2016

The jaw dropping odometer on Rajah Sellathurai's 2001 Toyota Corolla - which required only regular servicing and new tires to achieve! (CNW Group/Toyota Canada Inc.)

When buying a car, one of the first things people do is check the odometer. After all, the mileage is one of the key factors in determining how much a vehicle is worth. Buyers know it and sellers know it. That’s largely why over 450,000 vehicles are sold each year with incorrect or faulty odometers, according to the National Highway Traffic Safety Administration (NHTSA).

Even though sellers are required by law to include an odometer reading, and if the odometer is not correct, a statement to that effect must accompany the sale. However, vehicles ten years and older are exempt from the written disclosure requirements. The NHTSA has created s a list of tips to help car buyers determine if an odometer reading is correct.

  • Ask to see the title and compare the mileage on it with the vehicle’s odometer. Be sure to examine the title closely if the mileage notation seems obscured or is not easy to read.
  • Compare the mileage on the odometer with the mileage indicated on the vehicle’s maintenance or inspection records. Also, search for oil change and maintenance stickers on windows or door frames, in the glove box or under the hood.
  • Check that the numbers on the odometer gauge are aligned correctly. If they’re crooked, contain gaps or jiggle when you bang on the dash with your hand, walk away from the purchase.
  • Examine the tires. If the odometer on your car shows 20,000 or less, it should have the original tires.
  • Look at the wear and tear on the vehicle — especially the gas, brake and clutch pedals — to be sure it seems consistent with and appropriate for the number of miles displayed on the odometer.
  • Request a CARFAX Vehicle History Report to check for odometer discrepancies in the vehicle’s history. If the seller does not have a vehicle history report, use the car’s VIN to order a CARFAX vehicle history report online.

With digital odometers, it is more difficult to determine accuracy. A vehicle’s condition and a detailed history report are the best clues a buyer has. Just use a little common sense and remember “let the buyer beware” and you should be OK.

gap 4Thinking about trading your old clunker for a better model? You know you probably won’t get anything for your current heap, but the dealership is offering extended financing and zero down payments, so you figure “what the heck.”  But as you are signing your loan documents and getting your insurance in order (full coverage, you know), you may want to consider gap insurance.

If your car is totaled or stolen, gap insurance will cover the “gap” between how much your car is worth and how much you still owe on it. Say you are driving around a vehicle with a market value of $20,000. Since you still owe $23,000 on it, that extra $3,000 (plus any applicable deductible) is coming out of your pocket. Now gap insurance won’t pay the deductible, but it will cover the $3k.

According to the Insurance Information Institute (www.iii.org), you should consider purchasing gap insurance if you: Made less than a 20 percent down payment; Financed for 60 months or longer; Purchased a vehicle that depreciates faster than the average; or Rolled over negative equity from an old car loan into the new loan.

For a leased vehicle, gap insurance may make the most sense. Since you are not paying the vehicle off, just paying to use it (in a sense), those payments will be smaller than those for a conventional car loan. Less vehicle equity will be paid and the gap between what the car was worth new, what it is worth now, and how much you have paid on it.

When you are discussing full coverage options with your insurance professional, also mention gap insurance and if it is right for you.

medical insignia 1We all buy our auto insurance like the responsible drivers we are. Some opt for minimum liability coverage as required by California law and others decide that 15/30/5 isn’t enough. Especially when a minor fender bender will probably cost more than the $5,000 in property damage a minimum limits policy will pay for. What about the other two numbers? Do you believe $15,000 per person and $30,000 per accident is plenty? Remember this coverage applies to the “other guy.” You are not covered at all.

There is also another coverage called Medical Payments to Others, or “Med-Pay.” This is an additional coverage some people consider dropping to save money on their auto insurance premiums.

Med-Pay will cover your medical bills up to your coverage limit for you, your family and others involved in an accident which riding in your vehicle. This coverage moves with you — walking, riding in another vehicle, or on public transportation — and with your insured vehicles, regardless of who’s driving. Policy limits refer to the uppermost financial coverage available to each covered injured individual, and not a total limit.

There is also another coverage called Personal Injury Protection (PIP) that is similar to Med Pay in that both coverages will pay for physical injuries caused by an accident and because neither is concerned with who was at fault. PIP is more comprehensive but can be more expensive than Med Pay.

Remember that Med Pay only covers injuries pertaining to a particular accident and is in no way a substitute for personal health insurance. In fact, many insurers require that Med Pay limits be exhausted before your health insurance kicks in.

Talk to your insurance professional to see what coverages you are lacking, but will be happy you have if need be. Most people don’t worry about insurance until they need it. Of course, then it is too late to discover you are underinsured, or not insured at all.

business vehicle 3People using their personal vehicles for business has been happening since ice routes. Well maybe not that long ago, but certainly since documents needed to be sent by messenger and pizza needed to be delivered.  Certainly since telecommuting fell into vogue as another way of doing business and home offices became a deduction on your 1040 form. But what about your car? How much is it a business tool and not your personal vehicle? Where does insurance paly into it?

The most obvious indicator that you are driving a company car is the registration. If you are leasing (or own) in the company’s name, you very likely need a commercial auto policy. Just using it to driver to and from work, with an occasional delivery or client visit, probably just requires a personal policy. If it is dual-use – for both business and personal use – you should keep trip and mileage records. If your business use is over 50 percent, you should look into a commercial policy or at least an endorsement on your personal insurance.

Making deliveries with your vehicle as a primary job is another issue. If you use your car for a primary delivery vehicle, you will likely need to obtain a commercial policy. If it is a delivery-heavy business, like a pizza place, the shop may have a liability policy that covers its drivers. Of course, that doesn’t cover your vehicle. There are commercial policies for delivery drivers. If you are using your car and getting reimbursed by your company for upkeep and mileage, how does that impact your insurance responsibility?

Travelling on company business – to a convention, business meeting, even a company-sponsored retreat – could be another area of contention with your insurance company.  Say you get into an accident between the convention hall and your hotel room. Does the company bear the liability or do you? What if you dropped by the local sports bar in between to catch the last part of the game? Then what?

If you are an Uber or Lyft driver you need additional insurance. No need to go any further.

There is no need to guess wrong and have a claim denied. Meet with your insurance professional and look at what kind of liability you may be incurring by using your car for business reasons. Talk about your situation and get the protection you need.

motorcycle riding 2Not sure if you need to insurance your motorcycle? An easy rule of thumb is if your motorcycle needs a license plate, you need to have a minimum liability policy. Just as with any other motor vehicle operating legally on the street, that’s California law. This is to help ensure that drivers and riders are able to pay for damages or injuries they may cause to others in an accident.

Liability insurance will pay for property damage and bodily injury suffered by others in a crash that you caused. Here are the minimum liability coverage limits the state requires: $15,000 for injury/death to one person; $30,000 for total injury/death if multiple people are hurt in the accident; and $5,000 for damage to property.

Bear in mind that 15/30/5 are the maximum payments your insurance company will make, so think about how much medical procedures cost and how far $5,000 in property damage will go. Also keep in mind that liability motorcycle insurance will not cover your own injuries or property damage. That requires comprehensive and collision coverage.

Remember California requires all operators and their passengers to wear an approved safety helmet at all times when on the road. Also, please assume that other drivers probably cannot see you, so be sure not to ride in their blind spot (the left and right rear of the vehicle).

Check with your insurance professional to see if you are carrying the required coverage for your motorcycle, and if you need to be a little more protected. Also ask if completing a motorcycle safety course will reduce your premium. Enjoy your ride!

tree on houseYou are a diligent, responsible homeowner who has purchased what you believe is adequate coverage for your house. If you are like a lot of people, you have a decent knowledge of what is covered and what is not. How about tree damage? If a tree fell on your home or property, would your policy cover that kind of damage?

For the most part, the answer is yes. This is not limited to your main residence and would include a detached garage, a guest house, shed, or anything that is not specifically excluded in your policy. This includes any contents as well. The tree can be felled by natural disaster (windstorm, lightning, etc), but if your tree came down due to neglect, that may not be covered.

Whether you own the tree or not doesn’t matter as far as filing a claim goes. Especially in cases of a windstorm where branches, bushes and whole trees can be projected from great distances, ownership isn’t something that could be readily assessed.

Standard home insurance policies also provide coverage for damage to trees and shrubs due to fire, lightning, explosion, theft, aircraft, vehicles not owned by the resident, vandalism and malicious mischief. Coverage is generally limited to up to five percent of the amount of insurance on the structure of the house. Generally, most insurers will limit the coverage to about $500 for any one tree, shrub or plant.

Of course, if the tree was located on your neighbor’s property, your insurance company may attempt to collect from your neighbor’s insurance company, especially if the tree fell due to poor maintenance. You may be reimbursed for any deductible. If a tree fell on your property but did not damage anything, it is unlikely you will receive anything to pay from removal. Exceptions could be if it is blocking your driveway or some other egress.

Why not talk with your insurance professional to go over all of your insurance policies and see if it is time to update your protections? Make sure you are covered for everything you think you are, and some things you have not thought about at all.