Points to Consider When Renting a Car

One of  our agents, Kenja, suggested I write a blog about car rental insurance.  I thought, “What a great idea!”  Summer is right around the corner and that means people are beginning to plan vacations.  As much as people realize they may be renting cars when making those vacation plans, many don’t think about car rental insurance until they’re standing at the rental counter.  This can lead to some hasty – and costly – decisions.  I have often found myself in this same position – standing there at the rental counter wondering, “Will my car/homeowners insurance cover me?  Do I need the coverage?  If I need the coverage, which of the four types do I need?  Do I need all of them?”  Invoking the old adage, “Better safe than sorry,” I usually end up purchasing all four – and that can often add up to $50 per day!

As I started to do my homework on car rental insurance, I discovered there were many points to consider.  The Insurance Information Institute (III) has a couple of great articles and a podcast dedicated to car rental insurance.  They suggest making two phone calls – one to your insurance agent for his/her advice in determining what is and is not covered; the second to the credit card company you plan to use to pay for the rental, as many credit card companies provide additional insurance.

Below are the four most important types of coverage offered by car rental companies, along with points to consider for each:

• Loss Damage Waiver:  Relieves the renter of financial accountability should the car be damaged or stolen.  Cost runs an additional $7-$20 per day.
  • Points to Consider
    • Do you have physical damage coverage (comprehensive and collision) on your personal automobile policy?
    • What is the deductible?
    • Many Loss Damage Waiver policies are voided if any driving regulations are violated – such as failure to wear a seat belt, failure to use turn signals, the consumption of any alcohol.  Be sure to read your car rental contract carefully.
    • Does your credit card company provide supplemental insurance?
    • Take note that while you may be covered by your insurance company, the rental company will charge your credit card for damages to the vehicle and loss of daily use of the rental while the car is being repaired.  You will incur that cost until the insurance company reimburses you.
    • If you are renting a car out of the country, be aware that most personal auto insurance policies only extend to the United Sates, its territories, and Canada.
• Liability Protection:  Financial protection in case you are sued following an accident with a rental car.  Cost runs an additional $7-$14 per day.
  • Points to Consider
    • What are the liability limits of your personal auto policy? Are they higher than the state limits?
    • Car rental companies are required by law to provide liability protection; however, most companies only provide the minimum state requirement.  Also, the rental company may try to recoup any money they pay out from you.
    • Are you renting the vehicle for more than 30 days? Most personal auto policies do not cover rentals longer than 30 days.
    • If you are renting a car out of the country, be aware that most personal auto insurance policies only extend to the United States, its territories, and Canada.
• Personal Accident Insurance:  Covers medical expenses for you and your passengers if  you are injured in an accident.  Cost runs up to an additional $5 per day.
  • Points to Consider
    • Do you have personal injury protection under your personal auto insurance policy?
    • What is the deductable?
    • Do you have adequate health insurance coverage?
    • And again, keep in mind most personal auto insurance does NOT extend beyond the United States, its territories, and Canada.
• Personal Effects Coverage:  Provides coverage for your personal items stolen from your rental car.  Cost runs up to an additional $5 per day.
  • Points to Consider
    • Most homeowners or renters insurance policies provide off-premises protection.
    • Most insurance companies provide this protection worldwide.

Those are a lot of points to consider when renting a car!  And, calling to mind another old saying, “Forewarned is forearmed,” it would be best to consider all these points before you are standing at the rental counter.  As always, it is a good idea to check with your insurance agent if you are unsure about your coverage.  You spend so much time planning out the perfect vacation…make sure you’re properly insured in advance so you can enjoy every minute of it.