4 years ago
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by
Kris Castle ·
Comments Off on Do I Need to Buy Extra Insurance When I Rent a Car?
It’s time to discuss the years-old debate on rental car insurance. Everyone who has rented a car has been asked to buy the rental companies insurance. Renting cars can be expensive. So naturally, skipping out on the add-ons can be an easy way to lower your costs. And if you have your own car insurance policy, do you really need it?
Here are the facts:
Most full coverage policies extend coverage to non-owned vehicles.
This means when renting a vehicle, your liability, collision, and comprehensive coverages are extended to the rental car. If you are involved in an accident or incur damages to the rental car, you can still file a claim on your policy. This is subject to the same deductibles and limits as your personal vehicle.
If you do file a claim for a rental car, it will show on your driving record, as any and all claims do.
One reason to buy the additional insurance is to avoid having to file a claim on your personal insurance for any damages to the car.
What your personal insurance policy won’t cover on a rental car.
Rental car companies only make money when their cars are out on the road. If you damage one of their vehicles, they are going to lose money for the time it is off the road being repaired. Some companies will attempt to recoup the money they have lost by charging the one who was renting the car when it was damaged. A rental car often will lose value once it has been in an accident, and they can stick the driver of the vehicle with this cost as well. Your personal auto policy does not cover loss of use or diminished value for non-owned cars. If you do plan on purchasing additional rental car insurance, make sure to ask about these add on coverages.
Another helpful add on coverage can be “loss of personal effects” This will often cover you if your personal belongings are stolen while renting a car. If you carry comprehensive coverage on your policy and your rental car is stolen, your insurance policy will pay to replace the stolen car, but not any of your property.
What’s the conclusion?
Some credit cards offer rental car insurance as a benefit. They will offer some of the same additional coverages rental car companies sell, but without cost to the cardholder. Check with the bank that issues your credit card for more details. Some cards may only offer actual cash value for the rental car and not replacement cost. Ensure that your card benefits are comparable with what the rental car company offers before you use it as a substitute.
While you do not always have to purchase additional insurance to rent a car, their policies do offer more than a standard “full coverage policy”. By getting the additional coverage, you are ensuring that you won’t be hit with any additional out of pocket costs if your rental car is damaged.
Always check with your personal insurance agent to find out specifics of your policy and situation.
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5 years ago
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by
Kris Castle ·
Comments Off on Does My Auto Insurance Cover Rental Cars?
Blog by Erie Insurance
When it comes time to rent a car, here are two common questions that customers often ask us:
- Do I need to buy the insurance offered by rental car companies?
- If I am in a car accident and need to rent a car, am I covered?
Let’s find out the answers.
INSURANCE OFFERED BY RENTAL CAR COMPANIES
You’re standing at the rental car counter and the person helping you asks if you want to buy insurance through them. Do you need it? Ultimately, it’s up to you but in most cases, you probably don’t, as your personal auto insurance should have you covered for liability claims, but your ERIE Agent can tell you for sure. Additionally, If you have collision and comprehensive coverage, you may also be covered for damage to the rental car.
Auto insurance from Erie Insurance is designed to suitably protect you and your family for incidental use of a car that’s not your own, such as a short-term rental of less than 45 days. The coverage extends to cars in the U.S. or Canada. That said, it’s a good idea to check with an insurance adviser like an ERIE agent beforehand since auto policies vary from person to person.
Here are a few questions to ask your agent about insurance and rental car coverage:
Q: When I rent a car for a combined business trip and a personal vacation, am I covered?
A: Your personal auto policy may not cover you, but your employer’s insurance might.
Q: If more than one person is driving the rental car, am I covered?
A: Your auto insurance likely only covers individuals that are on your policy, such as spouse or kids. So, in this scenario, coverage from the rental company could be a good idea.
Q: If my luggage, purse or personal possessions are stolen out of my rental car, am I covered?
A: Maybe. This depends on the details of your individual auto policy. In many cases, personal property may be covered by a homeowners or rental insurance policy, but not by your auto insurance. It may be worth asking an associate from the rental company what their policy is regarding personal property stolen from their vehicles.
Another option to consider: Many credit card companies offer rental car insurance if you pay the rental fee using their card. Just know that this coverage typically only covers physical damage to the rental car, so you’ll still need separate liability coverage. Get in touch with your credit card company to ask for details.
With liability coverage, there are a few things you should consider. Most states have a required minimum amount of liability coverage, which rental car companies are required by law to offer, but that still may not give you enough protection. If you have personal auto insurance and have opted for higher liability limits, you’ll be better protected.
INSURANCE FOR RENTING A CAR AFTER AN ACCIDENT
If your car needs to be in the shop for a while after an accident, you may need to rent a car. Most auto insurance policies offer rental reimbursement coverage for a nominal extra charge, but sometimes auto insurance shoppers skip adding it to their policies.
With ERIE, basic rental car coverage is automatically included in most states if you’ve purchased comprehensive coverage. That means if your car is disabled because of a fire, theft, glass damage or another comprehensive type claim that may be covered under your policy, you’re covered for a compact sedan rental car. If you need a bigger rental vehicle, you could buy additional coverage (details below).
Related: When is a car considered “totaled”… and what happens when it is?
To have rental car coverage while your vehicle is being repaired from collision losses, such as hitting another car or a fence, building or pole, you would need to purchase collision coverage and add the rental car coverage to your policy.
At ERIE, this add-on coverage is called Transportation Expenses. It allows you to select a class of vehicle you want. It’s a nice benefit, because if you are a family of six… a compact sedan is probably not going to work. There are six classes* from which to choose:
- Class 1: Compact sedan
- Class 2: Traditional sedan
- Class 3: Small SUV or pickup truck
- Class 4: Minivan or midsize SUV
- Class 5: Luxury sedan or large SUV
- Class 6: Specially equipped vehicle that can be operated and accessed by an individual with a disability.
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