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Thursday, June 27, 2019

Should You Pay for Extra Rental Car Coverage?

By Catherine Powell

Image courtesy picserver
With summertime comes vacation time, the time of year when many of my customers jump on a jumbo jet to visit far off places.  It’s also the one time of the year that almost guarantees you’ll elect to rent a car, since you can’t fit the family sedan in the overhead compartment.  That being said, many customers ask me whether they should opt for added rental car coverage that’s offered at the counter of every rental car agency on the planet.  My answer is always the same.  That depends.

Won’t My Auto Policy Cover a Rental?

While it’s true that your current auto insurance policy can be used to cover any car you choose to rent, there are a few caveats you should consider before refusing added coverage.

1.      How high is your deductible? – If you carry a $1,000 deductible, this makes sense for the car you drive if you have a spotless driving record.  The problem is, unless you rent the same car you normally drive, the learning curve could cause you some grief should you dent a bumper while backing up or have someone else hit your rental car while you’re away from the vehicle.  Even a slight fender bender can easily cost more than $1,000.  This should give you pause to consider spending a few dollars for added coverage that could save you a grand if something untoward were to happen to your rental.

Image courtesy flickr
2.      Does my credit card company provide added rental car insurance? -  On the other hand, some credit card companies automatically provide customers with added coverage on any rental car they charge.  It wouldn’t hurt to touch base with your credit card companies to find out if they provide added coverage, so you won’t have to. Just make sure you also ask what kinds of vehicles the added coverage includes.  While some cards only cover a rental car, others provide supplemental coverage for motor-home rentals, motorcycle rentals and even truck rentals. 

3.      Collision Loss Damage Waiver (LDW) – If you should damage or destroy your rental car, the LDW may exempt you from having to cover the cost of repairing or replacing the vehicle.  This works much like the comprehensive coverage on your existing auto insurance policy.  While your comprehensive coverage may seem up to the task, the one thing it won’t cover that an LDW will is loss of income incurred while the vehicle is being repaired. (The devil’s in the details, so you need to either purchase added coverage, or read the fine print on the rental agreement that stipulates what you will be charged should the vehicle be out of operation for some time to come.)

4.      Liability Coverage – If you should injure someone or damage their property while driving that rental car, you’re liable to cover property damage and medical costs.  That’s the bad news.  The good news is that your current auto policy could provide sufficient coverage so that you won’t need to purchase added coverage.  The trick is determining how much coverage your current policy provides in order to determine whether the amount should be sufficient for your needs.  (Consult your insurance agent before you plan any trips that necessitate renting a car, motor-home, motorcycle, or truck.)

The Case for Added Coverage

While people hate to pay for anything extra that they probably won’t need to use, there are some pluses to considering spending a little more to buy added rental car coverage:

Image courtesy pexels
      1.      If you do get in an accident or have your rental car stolen, having added coverage means you won’t have to worry about your current auto policy increasing the cost of your premiums, since the supplemental insurance precludes your current insurance carrier from having to pay a dime.

      2.      If you don’t currently have either homeowner’s or renter’s insurance and items are stolen from your car, your current auto policy will not pay to replace these items.  Supplemental rental insurance usually will cover these losses.

      3.      While your current auto policy’s PIP coverage will help you pay medical expenses for you and your passengers should they be injured in an accident involving your rental car, the limits on your current policy may fall short of the actual costs.  The personal accident insurance coverage on supplemental rental car insurance could help you cover any added medical expenses should your current coverage fall short.  Depending on the supplemental insurance provided by the rental agency, you may not even have to involve your current insurer to cover these medical expenses.

Before You Sign on the Dotted Line

Just as no two snowflakes are alike, no two insurance policies are the same.  That’s why you need to take the time to find out what kind of coverage you currently have on the family sedan.  Then you need to determine any shortfalls your current policy has, as well as the terms offered by supplemental rental insurance.  The best way to solve both these issues is to consult with your friendly local insurance agent before you rent a vehicle, since he or she can help you make the best decision as to whether you need to consider paying for added rental car coverage or not.  The last thing you want is to have your dream vacation turned into a nightmare because you refused to secure added coverage that could have saved you a fortune.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com/

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