Another call I get a lot from clients, is when they are getting ready to go on vacation and they are renting a car; they always ask me “Am I covered?” as they are standing in the rental car agency about to sign the paperwork.
A good idea is a review your personal car insurance policy prior to renting a car. In some cases, the coverage you have on your car extends over to a rental. So a majority of the time the insurance that you would buy from the rental car company would be duplicate – a coverage you already pay for.
However, sometimes the rental companies coverage is a good idea to purchase – so its good to know what is covered, and what the rental company is offering.
Your personal auto insurance policy includes liability coverage and any additional coverages you’ve opted for, such as comprehensive or collision. Those coverages may extend to your rental car.
In addition to your auto insurance, some credit cards offer extra insurance if you pay for a car rental using that card – and some dealerships offer a ‘free’ rental if your car is in the shop due to repairs (especially if it’s under warranty) it’s always good to check.
If you want to check about extra rental car insurance through your credit card, call the 800 number and explain your situation so they can give you the details and what is covered. Most credit card ‘insurance’ is secondary, to your primary insurance company. I also suggest getting it in writing.
Rental car agencies typically break out their extra insurance offerings such as;
Liability coverage is the same as you have have on your auto policy.
Collision/loss damage waiver isn’t technically insurance. If you damage the rental car, this waiver may help cover the cost of repairing it. The waiver typically excludes coverage for damage caused by speeding or driving on unpaved roads.
The biggest issue with NOT purchasing the rental agency insurance is ‘loss of use’. This is loss of rental income for the car that they would normally have rented out, while it’s been repaired in a shop due to the accident that you had. Your auto policy will NOT reimburse for this – so this would be something that you’d be responsible for. Which, in summer when most cars/vans are booked well in advance, can get costly. Be sure to read the rental agreement to clarify what kinds of charges you could incur, and if there is a max.
Personal effects coverage may help cover your personal belongings, such as your laptop or clothing, if they’re stolen from the rental car. If you have renters or homeowners insurance, the personal property coverage on that policy typically helps cover your personal items through what’s known as “off-premises coverage.” Off-premises items are usually only covered up to a certain percentage of your personal property coverage. The deductible on your homeowners or renters insurance will apply. Check with your agent about the limits of your coverage.
Personal accident insurance may help pay your and your passengers’ medical bills if you’re injured in a rental car accident. The III says if you have health insurance, medical payments coverage or personal injury protection on your car insurance policy, you may already have coverage comparable to what the rental company offers. Medical payments coverage and personal injury protection (not available in all states) may help pay for medical bills due to a covered car accident.
If you’re not sure whether buying rental car insurance makes sense for you, it can help to weigh your options prior to picking up your rental.
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