When it comes to insurance policies, we typically think about the perils the policy covers to protect our most valuable assets. Many times, we make our coverage selections based on what the law requires, satisfying our lienholder or mortgage company’s insurance requirements, or we base our decision purely on rates. When using these reasons to choose our coverage, we tend to overlook some of the smaller endorsements that can add value to the policy for a minimal additional premium. The following is one of the most commonly recommended optional endorsements available on the Personal Auto Policy.
Endorsement NC 03 02 is Extended Transportation Expenses Coverage. When there is a loss to a covered auto on your policy, the company will pay, without application of a deductible, up to the per day amount. This amount cannot exceed the maximum limit of coverage selected for Transportation Expenses incurred by you or for loss of use expenses for which you become legally responsible for in the event of a loss to a non-owned auto. The covered auto or non-owned auto must be out of service for more than 24 hours and the loss caused by a collision or a peril listed under the policy’s comprehensive coverage. The coverage options for this endorsement are $15 per day up to a maximum of $450, $30 per day up to a maximum of $900 or $50 per day up to a maximum of $1,500. The payment for the use of a rental car will be limited to the period of time reasonably required to repair or replace the covered auto. I would like to point out that the $15 per day maximum of $450 is automatically going to apply to covered auto thefts after a 48-hour waiting period, as this specific coverage is written into the policy and provided under Part D (Comprehensive) Part of the Personal Auto Policy.
For example, I have a collision loss from an accident in my covered auto listed on my personal auto policy. It is in the body shop for five days, which is the approved reasonable time to repair the vehicle. The insurance company would pay up to my daily amount for the use of a rental car for the five days.
My experience has been that policyholders expect a rental car to be provided in all circumstances when a collision or comprehensive claim occurs, but that isn’t the case unless you have this endorsement on your policy. Endorsement NC 03 02 is strongly recommended for single-vehicle policyholders or for anyone that does not have a secondary vehicle to use if a covered claim were to occur.
This is just an overview of the NC 03 02 Endorsement. Consult with your local Farm Bureau agent for additional questions concerning this endorsement, to learn about the underwriting requirements to add this endorsement to your Personal Auto Policy and to get quotes on the different coverage levels available.
– Allan Williams
