Rental Car Insurance
When thinking about rental car insurance, you need to take into consideration that most of the private vehicle insurance companies’ coverage transfers over to the rented car during the time the rental is utilized by you. Keep in mind that if you decide to allow other drivers that are not on your personal policy, you will be in a serious risk as if the other persons that are using the rented car get into an accident, they will not be covered. For this reason, you need to ask your insurance company about their policy regarding this situation.
If the policy you have offers a minimum level of coverage, you may want to compute the value of the damage or loss of a newer car (the rented one) and figure out if you want to supplement your coverage. The personal car policies that will extend collision coverage to a rented automobile only give a coverage limit equal to the value of your own car. However, if your car’s value is less in comparison to the value of the car you have rented, you might be obligated to pay for some of the damages that might occur.
Check with your credit company to find out if it offers rental car insurance coverage if you use their card for paying the rented car. Don’t forget to ask them about the requirements for getting reimbursed. To give you an example of a possible problem – you might not be reimbursed if you do not tell the company within a certain period of time after the accident. In most of the cases, for a credit car insurance to work, the car that you rent must be paid in full with it, and you must refuse the rental company’s collision waiver, and at the same time be the primary renter of the vehicle (of course, additional added drivers will also be covered).
If you plan on going on a business trip, check with your insurance company as some of them will not cover you in this situation. More than that, most of the companies will not cover any car use that involves delivery for business purposes of people, supplies, materials, food or papers. For the long-term rentals, the coverage might be limited and most of the companies cover cars rented for up to 30 days. In addition, don’t forget to check if the coverage is available in a foreign country – most likely it will not be. Pickup trucks, campers, exotic car as well are other rented vehicles might not be eligible for coverage.
In the event that you are not adequately covered by the credit card company and/or the insurance policy, you might want to take into consideration the options offered by the rental company. Why? Because any insurance is better than no insurance. We recommend that you pay a nominal amount per day in comparison to having to pay even thousands of dollars over years in a payment plan for property damage.
In case you are involved in an accident in a rental vehicle and your personal car policy transfers over to the rental, it means that the extra insurance you purchase from the rental company is considered excess to your own regular car policy. In this situation, your policy will pay out first and any of the potential damages over the limit will be covered by the rental carrier. Of course, this is with the exception of impact on the rental car. For such kind of damages, you will be obligated to pay your deductible in order to repair the rental, and your carrier will have to pay the remainder. You will be excused from this only if the other person involved in the accident is at fault or you have opted for the additional insurance, due to the reason that the additional insurance will cover the damages to the rented car, but not for the property damage of others, with the exception of an excess capacity.
If you are one of those people that do not own a car or if you rent them very often, we recommend that you ask your insurance agent about purchasing a non-owner liability policy as it will provide comprehensive coverage for multiple rentals and might be able to prove to be a better bargain in comparison to the damage waivers offered by the rental firms. However, do not forget that if you cause damage to the car that you have rented, it will cause your regular vehicle insurance premium to go sky high.
Regardless of the rental car insurance you choose, remember to read the fine print of your card agreement. Most likely, the coverage is only secondary and this means that after you pay out of your own wallet for the damage, then you have the possibility to try to collect from AMEX or Master Card. Taking into consideration the fact that they are not in business to donate money, you’ll most likely get nothing from them.
If your credit card can cover some of the damage, they will most likely either take an apportioned (prorata) amount of the damages along with the rental agency above or excess to the limits of your policy, or they’ll say that they will cover anything that is beyond what it is not paid by the other two entities.
Regarding the credit card coverage for insurance, be careful because it is only given to the cardholder and it might not include your wife – if she was driving the car at the moment of the accident.
As you can see, getting rental car insurance can be a little bit tricky as you need to take a lot of things into consideration before choosing what you need. As we said before, any type of insurance is better than no insurance. As they say, better safe than sorry – no point on risking when it comes down to getting insurance for a rental car.
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