Florida Insurance Network

If you’ve got a job (congrats), you might be taking a vacation from it this month and renting a car to help you get away.

In that case a helpful and charming rental-car rep is sure to get around to asking the big question: “You want the insurance on that?”

Many savvy travelers think the smart answer is a firm “no.” They have personal car insurance, which covers them in rental cars. The rental-car company’s insurance is just another $50 or more on the credit card for nothing they don’t already have.

All the fine print and insurance jargon jammed on to the rental agreement doesn’t help. And neither does knowing that your “agent” probably isn’t an expert and wouldn’t give you the straight story, even if he was.

So, here’s a little help. Your personal auto policy probably does cover your liability behind the wheel of a rental car. That means it probably will pay the guy you rear-end at the light because you were busy programming GPS coordinates.

But let’s suppose you smacked into the back of a garbage truck and did a real number on the front end of your rental rig. Let’s say that unit is out of commission for a while or, heaven forbid, a total loss. What then?

Well, this is an example of where you might have been smarter to pay for the rental-car company’s insurance, or at least the loss damage waiver, also known as the collision damage waiver.

Maybe your personal car insurance would pay for damage to the rental car.  Some policies do. What it might not pay is revenue lost to the rental-car company as a direct result of your at-fault encounter with the Tourist Town Municipal Waste transporter. If that piece is coming out of your hide because you didn’t buy the insurance, it could add up to a lot of dough in a little time.

So, here’s my advice. Before you vacate, take a few minutes to understand what your car insurance shall and shall not cover relative to rental cars. Then, when they pop the question at the rental-car counter, you can make an educated decision that won’t have you working to pay off the rental car company from now until your next vacation in 2015.

Like a noxious neighbor, State Farm is expected to dump hundreds of thousands of Florida homeowners on the state’s bedeviled property-insurance market during the next two years.

State Farm insures a huge percentage of Florida homes. State of Florida worries that other companies won’t pick up enough slack, forcing state-run Citizens Property Insurance (the so-called insurer of last resort) to accept too much risk exposure.

The roof caves in, of course, if a major hurricane hits us. That’s when Florida might have to levy billions of dollars from millions of Floridians to cover claims that no one else can pay, including Citizens Insurance. Expert bean counters fear a bad hurricane season might even produce a fiscal disaster of historic magnitude.

Naturally, Florida wants to avoid this nightmare by spreading as much risk as possible to other insurers. That’s why state law requires insurance agents to write homeowners policies for at least one property insurance company before it permits them to write homeowners policies for Citizens.

The logic behind this is sound. We don’t want agents taking homeowners business straight to Citizens and loading it up with risk exposure. We want to help other insurers get a crack at the business in order to spread as much risk as possible.

The rule makes sense and it applies to all agents, except State Farm agents.

What?

Right. It’s a good rule but it doesn’t apply to agents who represent by far the single largest property insurance company in the state, which happens to be dropping all of its property insurance in Florida. Does that sound a little strange? Wildly contrary to good public policy? Bat-shit crazy? Wait … it gets even battier.

State Farm agents are so-called captive agents. State Farm won’t allow them to write homeowners insurance policies for other companies and, of course, it’s won’t provide any new property insurance of its own. That’s a bum deal for everyone.

So what does the sovereign State of Florida do in response? It not only made an exception to allow State Farm agents to take their clients property insurance directly to Citizens, it let them offer discounts on State Farm auto insurance as a reward for doing exactly what the law is intended to prevent.

We’ve heard of bending to the winds of adversity but do we have to bend all the way over?

Ask yourself this: Why would anyone shop for property insurance from other companies, using an agent they don’t know, when their friendly, familiar State Farm agent can obtain cheap insurance through Citizens and cut their car insurance as a reward?

Answer: they wouldn’t.

Maybe this works well for someone other than State Farm and its agents but we don’t know who.