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Check for adequate Zipcar coverage

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NEW YORK (5/2/11)--Car-sharing services like Zipcar, or Hertz’s Connect, are filling a customer need in some cities and on college campuses. Too bad there’s a potential gap in customer exposure to huge legal judgments if users have a serious accident (The New York Times April 22). Is total liability of $300,000 per accident enough protection when renting a Zipcar? Right now the company caps liability insurance coverage it provides for members age 21 and older at $300,000 an incident. Other providers, like Connect, offer even less coverage. Hertz sells better coverage but only for traditional car rentals. It may make sense for some drivers to get their own nonowner liability or to use an umbrella liability coverage to supplement the car rental offering. Granted, $300,000 coverage has been adequate for almost every accident since Zipcar began operations--93% of accidents have been for claims of less than $10,000 and 99% for claims of less than $50,000, Zipcar says. And about 2% of bodily injury liability insurance claims in the U.S. are for more than $300,000, according to ISO, a data provider to insurance companies. So if you’re happy with those odds and don’t have many assets or much income to protect, the comprehensive $300,000 Zipcar offers may be sufficient. But if you want more coverage, you can buy something called a nonowner’s auto policy. For an added $200 or so you can bump that liability coverage up to half a million dollars. Or you can make sure you have umbrella liability coverage in your homeowners insurance. Whether you drive your own car, or a shared or rental car, it’s wise to have these items in the car in case of accident (Money Mix April):
* Current insurance card; * Pen and paper; * Basic first aid kit; * Disposable camera if you don't have a camera phone or don't consistently carry your phone with you; and * Emergency contact information and special medical requirements (in case of an injury crash).
For more information, read “Review Insurance to Ensure Proper Coverage” in Home & Family Finance Resource Center.