By Catherine Powell
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| 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.
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| 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:
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| 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.
Spend a little to potentially save a lot? Not a bad idea.
ReplyDeleteLooks like a small amount of extra cover can go a long way to protect you.
ReplyDeletegood job....should you give your water heater a vacation?
ReplyDelete