“Do you want to purchase insurance coverage on the vehicle?”
What do you do??
Well, there isn't one answer that fits everyone. What we can say is there's a few important things you should consider when making your decision.
Does my current car insurance extend to cover a rental car?
In general yes. The coverage's from your personal auto policy will extend to cover a replacement vehicle, such as a rental car, with the same coverage as the broadest or “best” covered car on your policy.
Will my credit card cover damage to a rental car?
There's a possibility that you have a credit card that does offer some coverage for rental cars. However there are many conditions to this coverage so I wouldn't count on it, especially without reviewing the credit card contract.
Does my current car insurance cover "everything" if the rental car is damaged?
There are two big items that are not covered by your car insurance policy that are important when dealing with a rental car- Loss of Use and Diminution in Value.
- Loss of Use: If you're in an accident with the rental vehicle, your car insurance will pay for the cost of the repairs to the vehicle. However while the rental car is out of the company's rental fleet getting repaired, you will be charged the daily rental rate for the rental car. This "loss of use" is not covered under a personal auto policy.
- Diminution in Value: Many rental contracts allow the rental company the option to not allow a significantly damaged rental vehicle to be repaired. Rather the vehicle is taken out of their fleet and sold “as is” and the client is responsible for paying the difference in the before & after value of the rental car
If I buy the insurance from the rental company does it cover everything?
No insurance policy covers “everything” but the rental car company's policy is the most comprehensive coverage you can carry on a rental car. Purchasing the car rental company's insurance greatly simplifies the process in the event the rental car sustains damage.
How to Proceed:
If you weigh the benefits gained by purchasing insurance from the car rental company against the cost of the coverage, many people feel that buying the additional coverage is the best way to go.
This is especially true when you rent a car in a different city than your home area. Without the insurance from the rental company your future travel plans could be at risk. If there's an accident you may be forced to remain in the city where you rented the car to deal with repairs to the rental car. This can put airline tickets, hotel reservations or cruise plans in jeopardy, not to mention the additional cost of accommodations, food or other fees you may incur.
If you are considering not purchasing the offered rental insurance you may want to do some additional homework before selecting the rental company to do business with.
- Investigate the rental contract online to understand what responsibilities the contract contains.
- Review the rental company's car insurance contract online.
- Calculate what your potential “out of pocket cost” could be if the rental vehicle was out of service for 7-12 days for repairs.
- Confirm with your insurance agent what coverages would extend from your car insurance policy to the rental car.
- Finally weigh all of the items above against the cost of the rental insurance.
In the event that you have questions regarding rental car insurance please feel free to give us a call and we will be happy to discuss the topic further.
It is understood that any contractual or insurance terms, descriptions and definitions are meant for general informational purposes. For a complete description of coverage and/or terms the actual contract language or policy contract language should be reviewed. This document is for a demonstrative example only and does not extend or supersede any other contract in any way.