Insurance advice from Cullity Insurance, Manchester New Hampshire. Visit our website at

March 06, 2006

Does my auto policy cover me when I rent a car?

Your personal auto insurance policy’s liability coverage applies should you cause an accident while driving a rental car. In addition, your personal auto policy provides coverage for physical damage losses to non-owned autos such as rental cars.

This doesn’t mean you’re in the clear, however. Unless you purchase the collision damage waiver offered by your rental company, you might be left owing hundreds or even thousands of dollars in out-of-pocket expenses if your rental car sustains any physical damage while you’re driving it.

According to the Independent Insurance Agents and Brokers Association of America, here are a few good reasons to buy the collision damage waiver when you rent a car:

- While a car rental agreement may obligate you to reimburse the rental company for the “full value” of the vehicle if you have an accident, your personal auto policy covers only the lesser of the “actual cash value” of the vehicle or the amount necessary to repair or replace the vehicle. Your auto policy also does not pay for any “betterment” (increased value of new parts replacing old ones) of the vehicle, nor any “dimunition” of value (if the market value of the vehicle after repairs is less than that before the accident). Unless you buy the collision damage waiver, you could be left paying such charges.

- Because your auto policy gives your insurer the right to inspect and appraise the damaged vehicle before its repair or disposal, the insurer could deny coverage if the rental company fails to comply with this condition and makes immediate repairs. Purchasing the collision damage waiver usually allows the renter to walk away without the headaches involved in adjusting an auto claim.

- Unless you purchase the collision damage waiver, you will most likely be responsible for the rental company’s loss of rental income on the damaged car and various administrative expenses such as towing and appraisal. Your auto policy may have limited or no coverage for these items. Moreover, your rental agreement may require immediate reimbursement for damages, and it is customary for rental companies to charge your credit card, potentially creating significant debt or surpassing your credit limit.

Cullity Insurance agrees with the IIABA’s recommendation that in general, consumers should purchase the collision damage waiver when they rent a car. Doing so could save you a lot of inconvenience, time and money.

February 15, 2006

Does my auto insurance protect me from uninsured drivers?

In New Hampshire, every personal auto insurance policy includes uninsured motorist coverage, which pays for bodily injury damages you are legally entitled to recover from the operator of an uninsured motor vehicle who causes an accident. As the named insured, you and family members living in your household are covered while driving or riding in an insured or non-owned auto. Any other passengers in a vehicle insured under your policy are also covered, as are you and your family while traveling as pedestrians.

An uninsured motor vehicle is an auto with no bodily injury liability coverage at the time of the accident or with bodily injury liability limits that do not meet the financial responsibility requirements of the state in which the insured’s auto is garaged (in New Hampshire, the bodily injury limits required to meet financial responsibility requirements are $25,000 per person/$50,000 per accident). Hit-and-run vehicles whose owner cannot be identified are also considered uninsured motor vehicles.

Uninsured motorist coverage also provides coverage against underinsured motorists – that is, drivers who cause an accident and have some liability coverage but not enough to pay damages. Underinsured motorist coverage pays the difference between your liability limit and the amount recoverable from the underinsured’s driver’s policy. If the amount paid is less than damages awarded, the at-fault driver would be responsible for paying the remaining damages.

New Hampshire law mandates that the liability limits for uninsured motorist coverage in a personal auto policy match the policy’s bodily injury liability limits – for example, if your bodily injury limits are $250,000 per person/$500,000 per accident, your uninsured motorist limits will also be $250,000/$500,000.

January 20, 2006

What are “collision” and “comprehensive” coverage?

In a personal auto insurance policy, “collision” and “comprehensive” coverage are offered in addition to liability coverage. The collision and comprehensive portions of the policy provide coverage for physical damage to vehicles insured under the policy. Collision and comprehensive coverage are subject to a deductible – in other words, the policyholder agrees to pay for a portion of any loss (usually $250 or $500) before insurance coverage would apply.

Collision coverage pays for physical damage to an insured vehicle caused by a collision with another vehicle or object (such as a bridge or tree), or by upset or overturn of the vehicle. One notable exception: Damage caused by a collision with an animal is covered under the comprehensive portion of the policy.

Comprehensive coverage pays for physical damage to an insured vehicle caused by perils other than collision (and thus is sometimes called “other than collision” coverage). Common causes of loss covered by the comprehensive portion of the policy include fire, theft, explosion, windstorm, flood, vandalism and glass breakage.

Cullity Insurance recommends collision coverage for all vehicles except older cars with a low book value. Carrying a higher deductible (such as $500) reduces your annual premium. We also recommend comprehensive coverage for all vehicles. Because glass breakage is covered under comprehensive, we advise drivers to carry a lower deductible of $250 – that way, you won’t end up paying out-of-pocket for all or most of a shattered windshield.

December 19, 2005

Should I have an umbrella policy?

A personal umbrella policy provides liability coverage in excess of that provided by an individual’s primary insurance policies. A personal umbrella offers individuals additional liability protection of $1 million or more above the limits of liability of their personal auto, homeowner’s and watercraft policies. And in many cases, the personal umbrella policy provides coverage that is broader than that of the primary policies.

With a $1 million personal umbrella, an individual whose personal auto policy has bodily injury liability limits of $250,000 per person/$500,000 per accident would have increased protection of $1,250,000 per person/$1,500,000 per accident. Similarly, if the same person’s homeowner’s policy has a personal liability limit of $500,000, he would have increased protection of $1,500,000 with a personal umbrella.

In today’s litigious society, it is important to protect your personal assets from exposure to a lawsuit. Cullity Insurance recommends personal umbrella policies to customers who own a home and/or other significant assets with value exceeding the liability limits of their primary insurance policies. We also recommend commercial umbrellas to business owners with valuable business assets.

November 21, 2005

Can I buy identity theft insurance?

Insurance companies have responded to the identity theft epidemic by offering coverage for identity theft expenses. Usually offered as an endorsement to a homeowner's policy, the coverage reimburses you for expenses incurred to restore your credit history if you become a victim of identity fraud. Such expenses typically include notarizing and mail costs, loss of earnings, loan application fees and certain legal fees.

A limit of liability and a deductible apply per each identity theft occurrence. While some companies add the coverage to homeowner's policies at no charge, others charge a nominal annual premium (usually around $25).

While there are many measures you can take to protect your identity - such as guarding your social security number and other personal information closely and shredding documents containing this information - having identity theft expense coverage can minimize the financial impact should you become a victim. Cullity Insurance recommends this coverage to clients, and our insurance professionals are available to discuss the coverage in more detail.

November 07, 2005

How much homeowner's insurance do I need?

Many print and TV news outlets have reported recently on the trend of underinsurance among homeowners. Because of rapidly increasing construction costs, especially here in New England, it's a good idea to review your homeowner's coverage if you haven't done so lately.

Homes are insured on a replacement-cost basis - that is, the cost to rebuild a home to its current size and construction quality. Replacement cost is different than a home's market value, tax-assessed value or mortgage amount. It is based strictly on construction costs and does not consider the value of the land on which the home is located.

In New Hampshire, most homes have a replacement cost in the range of $100 to $200 per square foot of living area. Because every home has distinguishing variables and features, two homes with the same size living area can have different replacement costs.

At Cullity Insurance, our insurance professionals can assist you in estimating the replacement cost of your home. Insuring your home for its replacement cost provides you peace of mind in knowing that should you experience a total loss due to fire or another catastrophe, you will receive a proper insurance settlement that will enable you to rebuild.

October 24, 2005

What auto liability limits should I choose?

Auto insurance is not just for your auto. It protects your personal assets should you be involved in an accident that is your fault. This coverage is especially important if you own a home or have other significant assets.

A personal auto policy provides liability coverage for damages that you become legally obligated to pay another party for bodily injury or property damage arising from an auto accident. Examples of such damages include medical expenses, the cost to repair or replace a damaged vehicle, and money awarded for pain and suffering.

In addition, the policy pays for bodily injury damages you would be legally entitled to recover from an uninsured motorist, underinsured motorist or a hit-and-run driver. It also pays reasonable medical expenses you and your passengers incur in any accident. Moreover, the policy covers your legal defense costs in addition to any stated liability limits.

Without adequate auto liability coverage, a serious accident could put your personal assets in jeopardy. To protect your home and other important assets, Cullity Insurance recommends a personal auto policy with the following minimum limits of liability:

- Bodily injury liability: $250,000 per person/$500,000 per accident
- Property damage liability: $100,000 per accident
- Uninsured motorist liability: $250,000 per person/$500,000 per accident
- Medical payments: $10,000 per person each accident

If the value of your personal assets exceeds $500,000, we recommend an umbrella policy, which provides excess liability coverage of $1 million or more.


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