ZipCar needs to learn from my dad
I love my dad. Even though I don’t tell him that enough, I really do. Despite that, he drives me crazy repeating lessons that I learned from him long ago, probably just in case I didn’t really learn them. (Dad, are you reading this?) One lesson I have taken to heart is “Insure against the catastrophe, not the occurrence”. In short, when you buy insurance you want to be the kind of customer insurance companies love. You happily pay premiums for decades and, hopefully, never file a claim. The idea is to have high insurance coverage for the once-in-a-lifetime accident that costs enough to wipe you out financially. For smaller accidents, you share in the risk by carrying a higher deducible. In exchange, your insurance company will give you higher coverage for the same, or even a lower premium. This encourages you to be a safer driver and provides financial protection for a *really bad* crash.
According to Ron Leiber at the New York Times, ZipCar carries a $5 Million liability policy in case one of their cars gets into an accident. If, for example, ZipCar failed to maintain a car properly and as a result it crashes, ZipCar’s liability would be covered up to $5 Million. Sounds comforting, right? The trouble is, that coverage is for the ZipCar corporation, not the individual member. To keep member rates low, they only purchase a measly $300,000 liability policy for the member. I know $300,000 sounds like a lot, but it’s not. It’s barely above most State mandated *minimums*. What happens to your financial future if you crash into the side of a school bus and injure a bunch of kids or run over multiple pedestrians in a crosswalk? These are horrible and unthinkable accidents, right? You’re a safe driver and would never do this, right? But you never know what can happen. Maybe you’ll have a seizure and hit a bus or pass out at the wheel right as you’re heading into a school zone with kids everywhere. You just don’t know…
I purchase an “Umbrella” policy in addition to my auto insurance that covers my family up to $2 Million. That may sound excessive, but at $305 per year for the umbrella policy, it’s relatively cheap compared to the possibility of being wiped out financially. That’s a pretty standard policy and is easy to find from multiple companies. For the “car-free” out there, you may need to search a little harder. So, if you’re using ZipCar on a regular basis, you should talk to your insurance agent about supplemental coverage, because you never know what can happen when you’re behind the wheel.