Summer is here, which means that we will be traveling both domestically and abroad this season and many of us will be renting cars. A perplexing situation that many of us end up in more frequently than we’d like is when we’re renting a vehicle and are asked whether we want to buy insurance. Most people will opt to purchase the rental car insurance for that peace of mind, but in some cases, they may already be insured through their regular insurance. Your personal insurance policies and/or your credit cards might already be protecting you, too, so what should you do?
So, here is some helpful information about this subject, brought to you by all of us at Mike’s Auto Body.
When you rent a vehicle and are offered the chance to add on some insurance, there are typically up to four kinds of coverage to consider:
A loss-damage waiver or collision-damage waiver: If you’re in an accident in a rental car (or it’s stolen), you are typically responsible for the financial loss, which could be costly. With this coverage, the rental company waives that responsibility, relieving you of it.
Liability insurance or supplemental liability insurance: This coverage offers protection from any lawsuits that might arise from any incidents occurring during your rental period.
Personal accident insurance: This coverage is designed to pay for medical costs you (and any passengers) might incur in an accident while renting the car.
Personal effects coverage: This coverage, typically running between $1 and $5 per day, insures your belongings that are with you in your rented car.
The plans listed above might all sound reasonable and even necessary, even though they may cost you a total of $40 or more per day, which can add up over the course of a few days. Fortunately, there’s a good chance that you don’t need any or all of them — because you’re already covered!
You can prepare for the question at the car rental counter by doing a little research before you leave home. Look into your various insurance policies and also your credit card agreements, to see what rental car protections they offer.
If you own a car and carry auto insurance on it, you may have all the collision protection you need in your current policy, as many policies extend such coverage to cars you rent.
Liability insurance is a different matter and is actually required of drivers in most states. The amount of the coverage can vary, though, so know how much you’re covered for and decide whether it’s sufficient — not only for the rental of a car but also for when you’re driving your own car.
Finally, look into your credit card agreements. Many cards these days offer certain rental-car-related insurance policies. The amount of coverage might not be generous, though, and it’s often secondary, meaning that you’ll need to involve your insurance company.
Whether you should buy or decline the insurance offered at the rental car counter will depend on several factors, such as what coverage your other insurance policies and credit cards might offer. If you’d rather keep things simple and safe, buy the coverage. If you’re confident that you’re sufficiently covered elsewhere and are willing to put those policies in action should an unfortunate incident occur, decline it.
Jerry Stone is the owner of Jack Stone Insurance in Brentwood, CA and represents Safeco Insurance and Mercury Insurance. With more than 40 years of experience in the insurance industry, he is an expert on every aspect of the business, including rental car coverage. “With most of the policies we write, especially for people with just one vehicle, we automatically include rental car insurance for our clients,” he said. “That way, they get that peace of mind and they don’t have to deal with it when they’re at the rental counter. In most cases, we can save them money on the rental, as long as they are renting a car that is similar to what they currently drive. When you’re on vacation, you don’t want to have to worry about your car insurance and that’s why we always suggest that you incorporate car rental insurance into the plan we write for them.”
If you don’t have car rental insurance through your insurer, it can easily be added at any time, Stone said. “Some people say they don’t want it, but once they realize they will need it, they will call us and put it in their plan. Also, if you have a policy that is liability only, you have to get it or risk going out of pocket if something happens. Insurance is here to protect you, so keep that in mind and avoid taking unnecessary risks, especially when you’re on vacation.”
Kevin Hennessy has been an insurance agent for Farmers for the past 15 years, so he is more than just casually familiar about the topic of rental car insurance. “At Farmers, we always offer our clients pre-negotiated rates and it ends up being a favorable deal,” he said. “They still have to pay their deductibles, so when our customers rent a truck or van for one or two days to move, for example, we suggest that they buy the renter’s insurance on top of our coverage. That way if something happens, they won’t have to pay their deductible and or cover the loss of the vehicle to the rental company. In the end, we want to protect our clients and limit their exposure and that’s a great way to achieve that.”
Hennessy knows that everyone covets the protection that comes with any type of insurance, including rental vehicle insurance. “I always tell people that the goal is to purchase insurance that will hopefully never be used,” he said. “If you are ever unsure about any aspect of your insurance, call an expert to have your questions answered, rather than finding out after the fact.”
Enterprise Rent-A-Car Regional Area Manager Joe See discussed the different types of coverage offered by his company and talks about the benefits of each. “In the end, we want our customers covered so that they won’t run into trouble down the road,” he said. “In many cases, people who rent cars from us are not familiar with these particular vehicles. They may be larger or smaller or different in some way from their regular vehicle and that’s why it’s important for them to be insured. In many cases, the collisions associated with our rental cars are fenders benders, where people back into another vehicle or hit a wall or a pole, for example. They’re not familiar with the car and that’s why these accidents usually occur.”
Purchasing rental car has its own set of advantages, See said. “We offer a wide range of different plans for our customers to choose from,” See said. “Our Supplemental Liability Protection covers up to $1 million in liability claims; we also have special road assistance plans. One of the best things about our insurance is that you won’t have to pay a deductible. In addition, we feature Personal Accident Insurance (PAI) that covers the renter and passengers in the car. It also covers medical expenses, such as an ambulance, potential hospital bills, etc. Or people can opt for our Collision Damage Waiver (CDW) that covers up to the value of the car. Another great thing about buying rental car insurance is that your rates will never go up if you get into an accident.”