Is Test Drive Insurance Necessary?

Buying a New Car

The search for a new car takes time and effort. Typically you go from one dealership to another kicking wheels and choosing colors. You may drive many different cars on your quest to find the perfect one. You may wonder whose insurance covers you if you should get hurt in an accident while test driving. First, you hope this never happens and second, you have to be realistic and prepared should an accident happen,

The Test Drive

The first clue to whose insurance is responsible should be easy to spot. When you go to ask the salesman for a test drive, the only thing they ask for is your driving license. It is rare to find a car salesman who wants to see your insurance. This should be because the dealership carries insurance that allows customers to test drive their cars and be covered under their policy. There is always the possibility that the dealer is assuming the driver has insurance since they drove up to the lot to buy a car; however, not everyone drives to the dealership, they may have someone bring them. So, it would be a dangerous thing for dealers to assume that the test driver has auto insurance.

Dealership Policies

Car dealerships are required to carry auto insurance that covers their vehicles in the event of theft, fire, damage or accidents. This insurance also covers anyone who comes to the dealership to test drive a vehicle. Dealer insurance is expensive because it has to have high enough levels of coverage to pay for the worse case scenario. If the insurance were to have low coverage levels and someone died in an accident, the dealership could ultimately be held responsible and possibly go out of business.

Is Test Drive Insurance Necessary?

You don’t want to ask for a test drive and then ask if the dealership has insurance so you should typically stick to reputable dealers that you know would be properly covered. If you choose to test drive a car at a used car lot or a pay-here lot, you might want to go ahead and ask if they have insurance on the vehicles.

Personal Car Insurance

Car owners typically have their own personal car insurance that will also provide some coverage when driving vehicles other than their own. This is added coverage that will be beneficial should the dealership not have as much coverage as they should of if their coverage doesn’t pick up things like any loss of work time that you might have. This is when your insurance will pick up and fill in the gaps. Your own insurance could also be beneficial if you test drive a car at a used car lot that might not have the insurance necessary for test driving cars.

Drive Other Car Insurance

Personal car insurance can have an added clause called the Drive Other Car Insurance clause. This clause allows you to drive other vehicles, including test driving cars before you buy them. Having this clause should help you feel more secure that you won’t be putting yourself in financial jeopardy if you have an accident while test driving a car.  Practically all car insurance policies have provisions for coverage if you are driving another vehicle. You should read your policy and know before you drive if you have additional coverage for driving other vehicles.

Ca Dealerships and Accidents

If you happen to find yourself in the unfortunate position of being involved in an accident while test driving a car, you should make sure you get all the information necessary to ensure that your medical bills are covered and any other damages that might be present. You should get:

  • Copy of the accident report. Although the owner of the vehicle, the dealership, usually gets the accident report, you can ask for a copy for your records;
  • Insurance information from the dealership. You need the company name, policy number, and possibly even the agents name if you would like a direct contact.
  • Salesperson’s information. Most dealerships send a salesperson out with you on a test drive. You need to have this person’s name as they are party to the accident and also a witness.

You probably don’t want to think that you need an attorney; however, depending on who is at fault in the accident, you may want to consult one. The car dealership’s main priority is more than likely going to be the car and damage to the car. However, if you have injuries, you are going to need someone who is concerned with your welfare and financial obligations. An attorney will make sure you are not overlooked in the process of settling the accident.

Testing driving a car should be a fun time, not one filled with worries about whether or not there is test drive insurance on the car. Stick with reputable dealers and feel secure about the cars you are driving.

What is Pay as You Drive Insurance?

Paying to Drive

Everyone who owns a car and drives has to pay in some way, shape or form. If you own a car, you have to pay for insurance, gas, and up keep of the vehicle. However, what about people who only drive when they have to, such as to the doctor or grocery store? These people may not drive very much and yet they still pay for full time insurance. Today, insurance companies are testing a pay as you drive insurance program that would cut the cost of insurance for these people and allow them to pay based on how much they drive.

Premise of Paying as You Drive

The idea of paying as you drive is relatively simple: you pay insurance for the number of miles you drive. However, there may also be other forms of the plan that include paying based on when you choose to drive or where you drive. These plans are usually based on one of three types of plans:

  • Odometer Reading: this plan bases the cost of the insurance on the reading of the odometer which tells the insurance company how many miles the car has been driven.
  • Data Collection: This type of plan bases the cost of the insurance of various information that is collected from the car, including time the car traveled, the speed of the car and where the car was driven. This can be determined using a GPS type device that is installed on the car.
  • Time Driven: This type of policy bases the premium on the amount of time the car is driven. This can be found using radio frequency devices that are installed on the car of cell phone data that alerts a home-base when the car is driven.

These types of plans can be edited and changed to collect data that may change the billing, such as who is driving or how long the car was in movement without stopping, an indicator that the driver could be driving beyond safe time limits without resting. As these plans are tested, insurance companies and consumers will provide input that will help to tweak them. The idea is for people to only have to pay for the true amount of time they need to drive and not be penalized when they don’t drive much.

Benefits and Drawbacks

What is Pay as You Drive Insurance?

As with any program, there are pluses and minuses that will need to be considered. Some of these are outlined here for consideration:

  • Drivers will be more responsible and drive less when they don’t need to in order to save money;
  • Consumers have more choices and are not forced to buy cookie-cutter insurance policies;
  • Insurance companies can better identify risk and thus align their policies better;
  • Drivers pay for their insurance based on their driving record not the overall record of their peers – for example, a young driver who is responsible and drives safe would benefit from a lower rate. Typically, young drivers all pay higher rates simply due to a consensus that young drivers are high risk.
  • This type insurance encourages safe driving in order to get lower policy rates.
  • GPS is used to collect data and since it is already being used for navigation and safety purposes, consumers receive dual benefits from one technology.
  • The downside is that this type of insurance is looking at future risk rather than past risk.  For instance, a driver may have a  bad driving record and yet not have higher premiums because of the plan looking at how they are driving in the here and now. This is a double-edged sword since the insurance companies are taking a risk and the insured is getting a deal.
  • Some of the GPS and RFS systems that are needed to track the information my constitute breach of privacy laws.
  • Budgeting could also be difficult. For instance, if the family budgets x amount of dollars for car insurance and then drives a lot more than anticipated, they could wind up with a financial emergency.

These are some of the most commonly noted negatives and positives surrounding these new types of insurance plans. More studeies re needed to make a final determination on the plausibility of widespread implementation of usage based car insurance.

Implementation

Currently, usage based insurance is in the beta testing phase in many countries including the US and the UK. In the United States there is a federally funded test being conducted in Washington. If testing proves successful and beneficial for consumers and insurance companies, this type of insurance could one day be an option, particularly for people who only drive when they need to go to the doctor or other appointments and are financially strapped when it comes to paying for car insurance.

Pay as you drive insurance or car insurance based on usage is a good idea in theory; whether or not it will work out to become a reality for everyone remains to be seen.

Tips for International Driving Insurance

Driving Around the World

Traveling around the world for business and pleasure can be fun, exciting and expensive, particularly if you have to hire a taxi every time you need to go somewhere. Renting a car and driving yourself around can be much less expensive and provide you with more freedom to go where you want to, when you want to, without reservation. However, do you need to understand and have international driving insurance to protect yourself and your finances should you have an accident in foreign country.

Should you be involved in accident in a foreign country you don’t want to have to try and figure out their legal system and become involved in a chaotic mess. Purchasing international insurance for driving will help you to get through the accident with ease and be back on your way home.

Getting Around in Foreign Countries

Many people are afraid of driving in foreign countries because they are afraid they will get lost and they don’t know the rules of the road in the country. However, if you regularly travel or you can read a map, you can benefit from driving yourself in many ways. In addition to saving money, it is fun to drive around in a new place and see sights that you might not see if you used a taxi or stayed in walking  distance of your destinations.

If you choose to drive in a foreign country, you should make sure that you have adequate maps and some type of guide that will tell you the rules of the road so that you can make sure you are following the law. You should also find out what type of international auto insurance is acceptable and make sure you have the appropriate coverage before you hit the roads.

International Policies

International driving insurance polices allow you to drive in any country and have auto insurance; however, you are still required to make sure you are following each particular countries rules and regulations which may include having additional insurance that can only be purchased in that country. You should find out these things before you travel to the country so that you aren’t caught unawares and wind up in trouble with the law.

Passenger Insurance

Passenger insurance is a little known part of international travel insurance that travelers should be aware of and consider purchasing, even if you aren’t going to drive. In many countries, passengers in taxis are not covered by the taxi drivers insurance. This means that if the taxi is in an accident and you are hurt, you are responsible for your own health care costs. However, international driving insurance has an available option that covers passengers.

Finding International Driving Insurance

Tips for International Driving Insurance

You can find international auto insurance through many of the larger insurance companies or by researching the Internet and using specialized car insurance companies that offer car insurance for travelers. You should, of course, check with your current insurance company, they may be able to provide what you need or send you to a company that they work with to get you insured.

In addition to contacting your insurance company, you should also contact the US Embassy in the country you are going to visit so that you can get all the information you need about driving in the country. The embassy should be able to provide you with a handbook or guide for driving,

Additional Insurance

When purchasing international driving insurance you should ask about additional insurance such as an umbrella policy to cover any added expenses that could arise due to an accident, such as transportation to get back to the United States or added costs involved with fees or expenses that the other party may incur if you are found to be at fault in an accident.

It is much better to have more coverage than necessary when driving in another country to make sure that you are fully covered and can’t be held in the country until someone can send you the funds you need to get home.

Driving Permits

In addition to having international driving insurance you should also make sure you have the necessary driving permits to be able to drive. Some countries will allow you to drive temporarily using your US driving license; however, this is something that you will need to find out before you take your trip. If  you need a permit for the country you will need to find out what is required in order to obtain one and then get it before you start driving.

International driving insurance is a form of protection that every driver who visits foreign countries should consider mandatory, even if the country doesn’t’ require it. This will provide a peace of mind that should the unexpected happen and you find yourself at an intersection within a fender bender with a local resident.