While summer typically means travel and vacations for many of us, this year obviously looks a little different. Given the current state of the world, people are staying closer to home and for those of our clients who are going on vacation, many are choosing to drive to their destinations. Because of that, we are seeing lots of questions pop up around rental car insurance. I thought it would be beneficial to tackle some of them so you know what your answer to "Would you like the additional insurance?" will be before you get to the counter!
Q: If I rent a car or van or truck, do I really need the additional insurance from the car rental company?
A: In most cases, no, you probably don't need to buy the rental car company's insurance. This is because the limits of your personal auto policy will carry over to whatever car you are driving - including rental cars. As long as you have insurance in effect, you are covered for whatever limits of liability you have for your own cars. In addition, if you have comp and collision on your cars, those will carry over too so you'd be covered for any damage or theft of the rental car. Same applies to medical payments and uninsured/underinsured motorists. Again, these are all subject to your personal policy's limits. If you aren't sure what those limits are, please don't hesitate to reach out to us.
Q: But I only have comp and collision on one of my cars, the other is old and so I only carry liability - which limits of liability would apply to the rental car?
A: As long as you have comp and collision on at least one of your cars, those are the coverages that will carry over to the rental car.
Q: I am planning to drive to Michigan/California/Canada, am I covered?
A: Your personal auto policy covers you driving anywhere in the 50 states as well as any US Territories and all of Canada.
Q: I am driving to/in Mexico, am I covered?
A: If you are driving less than 50 miles into Mexico, your insurance covers you but any further and you will actually need special insurance to be covered - regardless of whether it is your car or a rental car. Give us a call and we can walk you through what you'll need!
Q: Great! So my personal auto insurance policy completely covers me 100% for everything if I am in an accident or there are other issues?
A: Not quite! Something that is not covered with regard to you driving a rental car is the rental car company's loss of use. Say you get into a crash and the car isn't totaled but it does need some repair. Your personal insurance covers the bill for the repair but it does not cover the rental car company's revenue while it is out of their fleet being repaired. They can and may charge you for that lost revenue depending on how long the repair takes and that is not covered by your personal auto policy! While it happens incredibly rarely, it does happen so that is something to consider as the rental company's insurance does cover that loss of use.
Q: Anything else to consider?
A: Remember, if you file a claim for a rental car, it will go on your own insurance just like a claim for one of your personal cars would. Given your household's past incidents or claims, it may affect the cost of your insurance next time you renew so that is something to consider. Also, your deductibles will apply if you file a claim with your own insurance. Just a couple things to keep in the back of your mind as you try to decide whether to decline their insurance.
So that covers the basics - did I miss anything? Have a question around rental cars that I didn't cover? Feel free to reach out with any additional questions you might have!