Wednesday, September 19, 2018

Rental Car Insurance: 3 Facts You Didn’t Know

Have you ever rented a car and the agent asks you if you want to purchase their insurance? Are you confident in your answer? Here’s what you need to know…

Accidents happen, unfortunately, and let’s say you have an accident while driving a rental car. Now what? There are three items you should keep in mind: personal liability, damage to the rental vehicle and loss of use. 

Item #1
Personal Liability
Liability Insurance protects you in the event that you cause an accident that results in injury or property damage. If you have auto liability insurance of your own in force, this would apply to your rental car, so you’re covered!

Item # 2
The Vehicle
Most companies consider a rental vehicle to be a “substitute” for the one you usually drive, and so they would cover the actual loss of the vehicle, minus your deductible. For physical damage to apply to a rental you must carry physical damage coverage on at least one vehicle on your auto policy. You may find that accepting the rental company’s insurance could be a good choice because there is usually no deductible, and you would not have to turn in the claim to your own insurance.

Item # 3

Let’s say the rental car gets damaged. Loss-of-use is the rental company’s loss of revenue while the car is being repaired. Although your own auto insurance may cover the liability and physical damage, it may not pay for the loss-of-rental-income.

Some insurance companies will cover loss of use, but it is sometimes limited in terms of how much they will cover each day. Let’s say you rent a vehicle for $50 per day and your insurance company only provides coverage for $20 per day; you would be responsible for that $30 per day difference.

Bonus Tip!
Did you know? Your credit card may provide coverage!
If you have a credit card that offers travel rewards, check your benefits. Some cards will offer physical damage coverage and loss-of-use coverage if you booked the vehicle rental with that specific card.

If you’re wondering what’s covered under your policy give us a call for a free review.
~ Logan Kirk
Logan Kirk, Insurance Advisor