If renting a car is part of your summer vacation plans, the good news is you have a lot of options, according to the Insurance Information Institute (I.I.I).
“You can now rent a car by the week, day or hour, from almost any location, or even sign up for a car-sharing service for a quick getaway to the country or the beach,” said Jeanne M. Salvatore, senior vice president and chief communications officer for the I.I.I. “While these rental options mean more choices for consumers, it also means more questions about insurance coverage.”
In order to financially protect yourself while avoiding wasting money on duplicate coverages, the I.I.I. recommends that you make two important calls before you rent:
Your Insurance Professional
If you own a car, find out how much coverage you already have. In most cases, whatever insurance and deductibles provided by your auto policy would apply to a rental car, providing you are using the car for recreation, not business. However, if you have dropped either comprehensive or collision on your own car as a way to reduce costs, you will not be covered if your rental car is stolen or damaged in an accident.
Check to see whether your insurance company pays for administrative fees, loss of use or towing charges. Some insurance companies may provide an insurance rider to cover some of these costs, which would make it less expensive than purchasing coverage through the rental car company. Keep in mind, however, that in most states diminished value (the reduction in a vehicle’s market value that occurs after a vehicle is damaged and then repaired), is not covered by insurers.
If you do not own a car and are a frequent renter, ask about a non-owner liability policy. This would provide liability insurance when you either rent or borrow another person’s car.
Your Credit Card Company
Most credit card companies provide some level of insurance for rental carsto find out the details of what is covered, call the toll-free number on the back of the credit card you will be using to rent the car and ask them to send you rental car coverage information in writing. In most cases, credit card benefits are secondary to either your personal auto insurance policy or the insurance coverage offered by the rental car company.
Insurance benefits differ widely by both the credit card company and/or the bank that issues the card, as well as by the level of credit card used. Credit cards generally do not provide personal liability coverage. Some credit card companies may provide coverage for towing, but may not provide for diminished value or administrative fees.
Read the I.I.I.’s Rental Car Insurance article for detailed information on how to insure a rental car from a brick-and-mortar car rental service, a car sharing service or a peer-to-peer rental siteas well as for guidance on deciding what coverage you need and what you can safely decline.
Video: Rental Car Insurance