Rental car insurance is something many of us don't think about until we get to the rental counter. There we break into a sweat, wondering what our own auto insurance policy covers and whether we really need this extra insurance. We often resort to guessing and hope for the best.
Don't leave your decisions to guesswork. The truth is you probably don't need everything they are selling. Here’s what you should know to be prepared for your next rental company encounter.
Step 1: What coverage do you have?
The first step is easy. Call us to confirm what coverage you have through your personal auto insurance, meaning what coverage extends to a rental car, truck or trailer. Ask about exclusions, limits, liability insurance, and see if there is a loss-of-income provision for the rental car company.
Will you rent a vehicle for vacation, moving things or business? Your existing coverage might be adequate or maybe your employer has travel insurance that covers your business rentals. Some policies pay for a rental car only if your own car is being repaired due to an accident. They may not pay for a vacation rental. Ask us to clarify the specifics.
If you rent vehicles frequently, consider purchasing a rental car endorsement if your insurer offers it. You can buy the endorsement even if you don't have collision or comprehensive coverage.
Step 2: Know what to expect at the rental counter
Whether you're renting a car, truck or trailer, most rental companies will offer you a variety of options. One is a Collision Damage Waiver (CDW) that covers collision damage to the rented vehicle.
CDW isn’t insurance. It's a waiver saying the rental company will waive the contract provision that makes you liable for:
• Losing or damaging the vehicle while you are renting it, whether or not it’s your fault
• The cost to repair or replace the rented vehicle
• The loss of income to the rental company while the rental vehicle is being repaired
When you take the CDW, your liability is taken on by the rental car company. The waiver can be voided under some circumstances, so ask what they are.
If your personal auto comprehensive and collision insurance do cover a rental vehicle, the coverage handles only the cost of damage or replacing the vehicle. It doesn't cover a loss-of-income provision. When in doubt, the Ohio Department of Insurance (ODI) suggests you pay for this waiver.
Another alternative is to turn to your credit card company for secondary, CDW-like coverage, but if you choose to get the rental company's CDW, this coverage may be void. Some credit cards offer collision coverage if you use the card to pay for the rental vehicle. Their level of coverage and exclusions can get complicated, so call the credit card company to verify the details if you go down this route.
Other types of insurance
The rental clerk will also offer you some variation of these insurance choices:
• Liability or supplemental liability insurance. Your personal auto policy probably covers liability while driving a rental. Check with us, and ask if your liability insurance applies if another family member drives the rental vehicle.
• Personal Effects Insurance. PEI covers damages to or loss of personal belongings in your rental car. Homeowners insurance might cover those belongings to an extent, but find out the amount covered, if there are excluded items, and the amount of your deductible. Then you can decide if you really need this insurance.
• Personal Accident Insurance. This covers medical and ambulatory costs related to accidental injury or accidental death while renting the vehicle.
For each type of insurance, you should receive a factual brochure with full details of the insurer's coverage, exclusions, limitations, provisions, how to file a claim and more. Review the brochure before deciding.
Please note these are just general guidelines. ALWAYS contact your own insurance company to get the right answer for your situation. If that's us, call us. Or contact us a different way.
Concerned your auto insurance may not provide what you need? Call us. Or contact us. We're glad to help!