Rental Car Insurance: Should You Buy It? – Chicago Consumers’ Checkbook

You just landed, happy to start your vacation or anxious to make it on time to a meeting, and head over to claim your rental car. But before you ’ re assigned your ride, you must face THE QUESTIONS about indemnity coverage .
As with your own car, you want to make certain you have adequate insurance coverage for damage to the rental cable car, for price to the place of others, and for indebtedness lawsuits in case you have an accident. So it ’ second worth understanding what coverage you have and what you need to add on before you pick up a rental .
unfortunately, though, you can ’ thyroxine count on receiving utilitarian advice from the representative or even the rental car company ’ south web site ; rather, you ’ re likely to just get a sales pitch. And the coverages rental companies sell aren ’ thymine cheap. For case, for a compress cable car lease from Budget, our shoppers recently were quoted a base monetary value of $ 45 per day ( plus tax and the usual scramble of fees ). Adding Loss Damage Waiver coverage would cost an supernumerary $ 28.99 per day. For another $ 16.25 a day, we could add Supplemental Liability Insurance coverage. ultimately, if we added Personal Accidents and Effects coverage, we ’ d pay an supernumerary $ 9.95 a day. For “ full coverage, ” our total daily rate was $ 100.19—more than duplicate the base rental rate .
Should you spring for this farce ? If you own and insure your own cable car, your personal policy probably protects you against big losses you might incur when lease, so the agile answer is “ credibly not. ” But we detail below some significant exceptions and caveats. And if you don ’ t own a car, there are even more issues to consider.

When renting a car, consider three risks to insure against :

• Damage to the car (physical damage coverage);
• Injuries to others or damage to other people’s property (liability coverage); and,
• The rental-car company’s loss-of-revenue while the car is repaired (loss of use coverage).

For the first two types of risks, most drivers already have sufficient coverage from a mix of benefits on their personal car policies, spare perks from their credit menu companies, and the indemnity rental car companies are required to carry to register their cars. Although few of us carry loss-of-use coverage, as discussed below, most renters don ’ t need it .

Coverage You May Already Have

here ’ s a summation of the insurance protection you may already have :

Under a Personal Insurance Policy

If you ’ ra covered as a driver under your class ’ s personal car insurance policy, and that policy includes collision and comprehensive coverage, it will pay claims for forcible damage to cars you rent, and you will pay your policy ’ second deductible .
similarly, the liability coverage offered by your personal car policy covers you when you rent a cable car .
But most personal car indemnity policies won ’ thymine cover cable car rentals outside the U.S., Canada, and a few miles into Mexico. And personal policies are unlikely to cover any rental car for more than a month .
If you are an employee driving a rental car on company business, your employer ’ randomness car policy policy might provide coverage—but entirely if your employer has paid supernumerary for it. besides, these policies normally cover lone liability, not physical price .

Automatic with the Rental

While the rental cable car companies themselves have to buy indebtedness policy to register their cars, most companies get only adequate coverage to meet the needed local legal minimum, which is much a low restrict .
Although your personal car policy won ’ triiodothyronine screen you when driving overseas, the automatic rifle coverage in some countries is very high. For exercise, Hertz automatically includes coverage up to €1 million per person for rentals in Italy, and rentals in Spain mechanically include outright indebtedness coverage. But, as you might expect, the limits in many early extraneous countries are far lower—for exemplar, less than $ 2,000 per injured person in Thailand and $ 20,000 per accident in Nicaragua. The moral, as common : Check what you get before you pay for supernumerary insurance .

From Your Credit Card Company

If you rent a vehicle using a credit batting order ( as most renters do ), you probably get free physical damage coverage—but not indebtedness coverage—as a release fringe benefit from your credit card company. This coverage is standard on all American Express, MasterCard, and Visa cards. ( Discover recently dropped its coverage perk up. ) But keep in mind :

• You get this protection only if you use the card for every phase of the transaction—to pay for the rental, for any deposit, and, with some credit cards, to reserve the vehicle.
• You must rent the car in your name (rather than pay for someone else’s rental).
• You must decline the rental company’s physical damage coverage.
• Coverage does not apply in certain countries. For example, Visa does not extend coverage for rentals in Ireland, Israel, Jamaica, and Northern Ireland.
• Coverage does not apply to certain types of vehicles. It usually excludes RVs, vehicles designed to carry more than eight or nine passengers, vehicles with fewer than four wheels, and trucks (even small pickup trucks with extended cabs designed to carry four or five passengers).
• Losses that occur while the vehicle is used in a way that violates the rental agreement are not covered.
• Coverage is typically limited to rentals that last no more than 15 days in the U.S. or no more than 31 days in foreign countries. You can’t avoid these limits by returning the car and renting it again.
• Losses due to off-road driving are not covered, including when driving on any surface other than a bound surface, such as concrete or tarmac—a possible problem if you take a rented SUV over dirt roads to reach your campsite.
• Coverage may be limited to a maximum amount—say, $25,000.
• Certain kinds of losses (theft, vandalism) may be excluded.

Evaluating the Coverage Offered by the Rental Companies

If you ’ re still considering buying extra policy auspices from a rental car party, it ’ mho important to understand that the coverage is junior-grade insurance. This means that if you have an accident that your personal car policy covers—which includes most accidents that occur in the U.S.—before you can collect from the lease party ’ s indemnity you first have to file a claim with your own insurance company. In other words, the extra indemnity you bought from the rental car company for physical damage or indebtedness truly covers merely your deductible .
besides, when considering plans find out precisely what you get, specially when renting afield. In Nicaragua with Hertz, for example, paying $ 8 per day for auxiliary indebtedness coverage scantily raises coverage limits above the automatic minimums—from $ 20,000 to $ 25,000 per person, $ 40,000 to $ 45,000 per accident, and $ 20,000 to $ 25,000 for property damage .
unfortunately, it is identical difficult to get details on insurance coverage rental companies mechanically provide and what you get by paying excess. Most company websites provide very few, if any, details, simply providing abbreviated descriptions of available coverage and teach you to inquire at the rental counter for details and price .

The Loss-of-Use Gap

Neither your personal car policy policy nor your citation card company ’ second insurance perks cover “ loss-of-use ” charges rental car companies increasingly enforce. basically, when rental companies blame their customers for wrong to their cars, they make them apt not only for the cost of repairs, but for the theoretical rentals the party can ’ t make while the vehicles are out of perpetration. These penalties are normally excessive. For case, even though you rent a car for $ 19/day, a lease company might charge you an undiscounted $ 45/day “ scud rate ” for the count of days it takes to repair it—even though the company rarely charges that broad rate and even though it might not bother to repair the cable car .
Although the physical price coverage you can buy from rental car companies covers loss-of-use penalties, we advise most drivers decline it. To us, paying an excess $ 20– $ 40 per day to cover the unlikely risk of losing $ 40– $ 100 per sidereal day for loss-of-use fees just doesn ’ thyroxine add up .

If You Don’t Have a Personal Auto Policy or Want Extra Insurance, Buy Coverage from a Third Party

Companies like Allianz ( www.allianztravelinsurance.com ) and Insure My Rental Car sell chief insurance for rentals ( if you have an accident, you don ’ t have to file a title with your personal car policy party ). If you don ’ deoxythymidine monophosphate own a car, it ’ randomness worth considering one of these plans, preferably than paying what are normally higher rates offered by the rental companies. But note that these policies don ’ t include liability or loss-of-use coverage .
If you don ’ thyroxine own a cable car, you can besides buy a “ non-owners ” car policy policy for rentals, which offers the lapp coverage types and limits that you ’ five hundred get if you owned and insured a car. Because these policies aren ’ thymine bum, buying one makes sense alone if you rent often .
If you ’ re an American Express cardholder, it ’ s worth considering enrolling in its “ premium Car Rental ” plan. For a compressed tip of $ 24.95 for each rental you charge to your circuit board, you get chief insurance that covers :

• Up to $100,000 of primary damage and theft coverage for the rental car.
• Up to $100,000 of accidental death and dismemberment coverage.
• Up to $15,000 per person for excess medical expenses.
• Up to $5,000 per person for excess personal property damage, with a maximum of $10,000.

American Express besides offers a $ 19.95 per rental option ( $ 17.95 in California ) that provides slightly lower coverage limits .
apart from providing primary policy, the American Express platform is a better hand than what the lease companies offer in that you pay a ( fairly low ) flat fee for each rental ( for up to 30–42 straight days, depending on the express ). The rental companies typically charge $ 30 or more per day. so while the American Express fee for a one-day rental is not merely less than what most rental companies offer, it ’ s a screaming bargain for longer durations.

Keep in mind that while there is no tip to enroll in the program, once enrolled, you ’ ll automatically pay for the coverage whenever you rent. ( You can, of run, avoid the fee by using a unlike recognition circuit board to rent. )

Avoid Bogus Damage Claims

Checkbook ’ sulfur editor program recently experienced a coarse scenario : When returning a rental car, the company tried to charge him for price that already existed when he picked up the cable car .
While it ’ s impossible to wholly insulate yourself from this problem, there are steps you can take :

• Inspect your car carefully when you pick up. Walk around it look for scratches and dents. Check especially the front air dam and rear bumper, which are frequently scratched or dented. Also inspect the interior.
• If you find any damage, point it out to a rental company agent and document it with a pic. Even if he or she tells you the damage is too minor, insist that it is documented.
• Ask how you can check on the documentation. If there’s a paper form to fill out or a field in software, review what they record to make sure it’s accurate and thorough.
• If you are charged for damage you didn’t cause, ask the company to prove it with time-stamped photos. Ask for a record of rentals after you dropped off the car—if other rentals occurred, it’s possible another renter or the company itself caused the damage. Provide any proof you have (photos, inspection notes) that you didn’t cause the damage.
• If the company is unresponsive, dispute the charges with your credit card company.

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Category : car insurance questions