It’s good news that the economy grew so rapidly last quarter. But for a bit more perspective, click here for the web page of the Center for American Progress. Perhaps even sign up for the daily e-mail (just what we all thirst for, more e-mail) – to my mind, among the best of the web.
Jim Grant, a surpassingly smart and eloquent guy, thinks the Everbank Chinese-denominated CDs mentioned Friday may not be so dumb – as he writes here. (The irony, for those too young to catch it, is that ‘Chinese money’ used to be a synonym for ‘funny money’ . . . which used to be, and still is, a synonym for, basically, bogus money . . . and here, now, are the Chinese economy and currency, symbols of strength.)
LuckyinCalifornia: ‘Your article in Sunday’s PARADE on car insurance may lead to disaster. You are correct that if your car insurance covers rentals, you probably do not need extra rental insurance. However, if you drive an older car without collision insurance and then rent a car, you won’t be covered for collision on the rental car – a set-up for disaster should you have an accident. For years I followed your advice on both these counts, then realized what could happen. The small annual charge for collision (even in California) was much smaller than extra rental car insurance and well worth it. The best advice is to have the collision insurance unless you are certain you will never rent a car.’
☞ Good point – though in many cases you are covered by the credit card you used to rent the car. As suggested here, you need to check the credit card’s fine print to be sure.
John Douglas: ‘The car rental companies sell very expensive insurance at the counter, especially when annualized, but they sell this insurance by always staying one step ahead of the insurance available. The current method to force you to buy their insurance is known as “Loss of Use”. Should you damage, or total, the rental car, the rental car company will take that vehicle out of service until repairs are complete. The lessee will then be charged (on his credit card) the loss of income the lessor would have earned had the vehicle been in service. Coverage from your own insurance policy will typically not pick this up. Unfortunately we have to spend a little more at the counter . . . but it is better ‘spend a little to save a lot.’ And, as I’m sure you are aware, studying the car rental contract at the counter with a line behind you can be daunting.’
☞ Thanks, John! Fascinating about loss-of-use. But don’t the odds still favor not taking the insurance? If the car is out of commission for two weeks at the $350 weekly rate – which strikes me as a lot – you’re buying a policy to cover a $700 risk. What does that cost – and how often do you have accidents? Every tenth day you drive? Every thirtieth day? Many of us can go a full 100 days without having a single accident! I heard of one guy who went 200 days. At $14.99 a day plus tax for collision coverage, that guy would in effect be paying more than $3,000 to avoid the $700 loss-of-use charge when he had an accident on the 200th day. Of course, to someone who can’t afford the risk of having the accident on, say, the first day instead of the 200th, all this is academic. But most people who rent cars can probably afford $700 risks.
Bryan Jurgensen: ‘I think you should reconsider your advice on liability insurance. Specifically this statement: ‘When it comes to liability coverage, take the legal minimum if you have little to be sued for.’ Wouldn’t you agree this is morally irresponsible? The legal minimums are usually well below the possible damage that can be caused by a motor vehicle. How many permanently disabled people suffer every day because some irresponsible driver didn’t have enough insurance to adequately cover their medical expenses? I think you should write a short essay in PARADE retracting this statement and giving the reasons it’s the right thing to carry the maximum amount of auto liability insurance. I don’t sell insurance and have never been in a personal injury car accident, I just know what is right and what is wrong.’
☞ The auto insurance system in this country (except Michigan, which has it largely right) is DREADFUL. But telling a person earning $16,000 a year with no assets to protect – struggling to feed a family – to spend $2,000 to take high liability limits to protect ME, while good for me, is not really good advice for her. For much, much more on this, hie thee to the library to read My Vast Fortune.
Tomorrow: President Bush, the Reluctant Warrior; John Lewis, Warrior for Civil Rights [Don’t Forget to Vote!]
Quote of the Day
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.~Adam Smith, The Wealth Of Nations
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