What about Rental Car Insurance?
You know the drill. You’ve been here before. You’ve just come off the plane, picked up your baggage and gone to the rental car counter. What fun! You’re tired from the flight, about to begin an ambitious vacation or a challenging business project in a place you’ve never been before.
The first question: Do you want rental insurance? Of course you don’t “WANT IT”!
But maybe you should.
There isn’t a fast and loose answer. However, for maximum peace of mind you should decide on rental car insurance based on consideration of these questions
1. What Type of Rental Car Insurance can I buy?
Collision damage waiver – The rental car company will not charge you for a damaged or stolen vehicle when you buy this. They won’t charge you for the loss in rental revenues while their car is in the shop and not out earning. They won’t charge you for all the transport, storage, clean-up, and other miscellaneous charges.
Added Supplemental liability protection – Electing this will ensure you’re covered for costs to others if you cause an accident in the rental. Your own policy’s bodily injury is available for use here. So this may be an added layer.
Added Personal accident insurance – This coverage will pay for injuries or death of the driver and passengers of your rental car. Your own life policies would be available here as well as your health insurance. This might be a good idea in injury situations because it might be used to cover deductibles.
Added Personal effects coverage – Reimburses you for stolen personal items while renting the car. Your homeowners insurance or rental insurance will most likely kick in here. Just make sure the limits will cover what you are taking. Your personal insurance agent can review this with you.
2. What Coverage Might I Already Have that would help with a rental car?
As touched on above, start with your personal auto insurance. It’s likely that your policy will provide the same level of coverage for your rental as it does for your own car. That usually includes liability insurance, and, depending on the policy you purchased, may include collision, comprehensive and medical payments, too. There are exclusions, however. Some insurers won’t cover rentals in a foreign country or rentals that are being used for business. Get in touch with your personal insurance agent to verify your coverages.
Next, there’s your credit card. Most cards offer some degree of coverage, but it varies widely. Coverage is usually secondary, designed to step in and pick up where your auto insurance leaves off, and it tends to be mostly confined to collision, damage, and theft. For coverage to apply, most cards require that you decline the rental company’s collision damage waiver and pay for the car in full with the card that provides the protection. Again, contact your card company to find out exactly what is covered.
Then, consider your health and life insurance, too. If you’re in an accident involving a rental car and you have these policies, you likely have coverage for your own costs. Plus, with your homeowners insurance, you may have personal property coverage to help repair or replace valuable belongings that are lost, damaged, or stolen while you’re in a rental. Your deductible and policy limits will apply, and the same goes for renters insurance or condo insurance.
3. What Rental Coverage Might I Be Missing?
In the event something does happen to the rental car, you may be looking at the loss of use and diminished value fees, and your regular policy may not cover them. Loss of use is the income that the rental agency loses due to the vehicle being in the shop for repairs, and diminished value is the calculated reduction in a vehicle’s resale value as the result of an accident. Credit cards sometimes cover these but be aware that they may require documentation that rental agencies can be reluctant to provide.
So, before you make that next trip, give your personal insurance agent a call and check with your credit card company. That way you’ll be ready to make an informed decision when you get to the rental car counter.
You can call us too, even if you’re not one of our customers, and we’ll help you understand what you have and what you may need to have the peace of mind.
