Ready to hit the road for a summertime trip? If you plan on taking that trip in a rental car, take a moment and get the reader’s digest version of what you need to know in plain English instead of Insurance legalese before you sign the rental agreement. Follow these steps and you will be sure to know what to do when it’s time to go.
1. Do you have your own active auto insurance policy with Bodily Injury Liability protection?
√ Yes—First and foremost you will want to check your coverage limits, options, and extend to a rental car if that is an option. Most standard insurance companies will extend your liability protection to a rental car, but there are some non-standard companies that do not.
Secondly, if you have Collision and Comprehensive on your personal policy, you need to verify whether the physical damage will convey to the rental car if you should cause an accident or it’s stolen.
- If not, you may only need to purchase the physical damage coverage from the car rental company.
- Keep in mind that in either case, you are still subject to pay the deductible.
- You may be responsible to pay the loss of use to the rental company for days the car was unable to be rented out due to repairs.
Last, but perhaps most important, you will want to explore the difference in cost to maximize the amount of liability protection you carry. If you only have your state’s minimum coverage, you could be very under-insured. You might be driving on unfamiliar roads, which increase your risk. Often a difference in $25,000 and $50,000 Bodily Injury Liability is pennies a day.
√ No—you have two choices: Buy the rental car company’s insurance plan for both liability and physical damage or compare rates against a “Non-Owner” liability policy through an insurance agency.
If you intend to rent a car for more than a couple days, it might be worth a comparison look. Depending on all the usual things (age, experience, history, credit, location) Non-Owners insurance can be very inexpensive.
The advantages of a six-month Non-Owners Insurance policy:
- You build liability insurance history for better rates if you decide to buy a car after continuous six months and no lapses in coverage. Keep the policy in force until you purchase a car.
- You will have liability protection any time you rent a car or borrow a car as long as the policy is active.
- Depending on the state and your coverage options, you may even have better protection as a passenger in a car.
NOTE: Your Non-Owners insurance will not cover physical damage to the rental car so you must buy that portion of coverage from the car rental company.
2. Are you making your rental car purchase with a major credit card?
Before you set off on your journey, find out what protection is offered through your credit card company. Sometimes they will reimburse some losses as long as you claim it within the time frame they request.
You may be fortunate to find that there is some protection from the card; however, clarify all the fine print. Often they are peppered with restrictions and expectations for following up with a claim. You have to use the credit card for the full payment of the rental vehicle to have protection.
3. Don’t sign the agreement until you have fine-tooth-combed it
Don’t sign anything until you fully understand every word on the paper and you verify all the information they entered for you, including payment method. Make sure that all drivers are listed. If someone is not listed and they drive, you could be fully responsible for any loss, damage, lawsuits, or injuries.
4. Do you need the collision damage waiver?
The waiver is unnecessary in most cases when you have your own full coverage insurance policy. However, if your insurance company does not pay for loss of use to the rental car company, know you will be responsible for that amount. Otherwise, definitely skip it because it will cost nearly as much as your daily rental fee.
5. Do you need the supplemental liability protection?
The supplemental liability protection is just an extension of the amount covered for bodily injury and property damage. You are far better off to increase the liability on your own auto insurance policy rather than spending a great deal more on the one from the car rental. Increasing your liability on your existing auto is much less expensive and offers much better protection that you should always keep.
