Traffic Talk Ep 2: Rental Car Insurance

Rental Car Insurance: Is it necessary? If so, when should and shouldn’t you buy it?

It’s the new year! We all have lots of goals set and a common resolution is to travel more. What happens when you travel? Well you need something to help you get around right?

 Let’s say you are traveling out of town and need to rent a car to take you around town.

So, of course you head on over to the rental company, finish most of the paperwork, walk out to the car and what is one of the last things they ask you? 

Would you like to purchase insurance on this vehicle? 

We know how hard and how confusing a question this can be. You already pay for your auto insurance. Are you covered with a rental? Well we will answer all of these questions in today’s blog. 

If you are on vacation and need a rental for example- then yes, the limits and deductibles on your regular car insurance policy typically still apply to your rental car-

As long as this is used for personal use only. 

Let’s say you have full coverage (comprehensive and collision) and worse comes to worse and you end up being in an at fault accident. What happens? Well, your coverages will transfer to your rental car. However, do need to file a claim, pay your deductible, and it will show up against you in your insurance. 

Unfortunately, the rental company will need to fix the car that you damaged in the accident. Since you are responsible, your insurance will not cover the rental rates while it is being fixed or cover any downtime during the process of filing for an accident claim. The rental company is losing out of money while the car is in the shop because they can’t rent it out- right? So of course, they want to gain that money back from somewhere and that money will have to come from your pocket. 

If you have only liability coverage and are in the position of needing to rent a car- you are going to need to purchase the rental companies coverage or they won’t let you leave the lot with one of their vehicles. They, of course don’t want the responsibility of someone driving off with a 2020 $40,000 car with only liability insurance with the possibility of getting into an at fault accident. 

As I stated earlier, if you are on a short vacation (2-4 days) and you are not familiar with the type of transportation of the area, the proximity of where you want to go compared to where you’re staying then it would be a good idea to look into a renal. Of course it gets expensive fairly quickly however purchasing the insurance wouldn’t be the worst idea. Why? Because if you choose to spend the extra $30 and unfortunately get into an accident, all you have to do is hand over the rental car keys to the company, and walk away with your hands clean. It’s that easy and that is the plus side of buying the insurance, it is a little bit extra but it’s also an extra piece of mind. 

Remember: If you don’t choose to purchase the companies insurance and you end up using your own, then you are responsible of filing the claim, coming up with the deductible and of course being involved throughout the whole claim process (phone calls, meetups, etc) which is a lot of time and energy that nobody really wants to deal with, especially when it can be avoidable. 

What about company situations? Let’s say you’re going on a business trip where the expenses will fall back on the company you work for. Make sure to speak to your employer and ask them how the vehicle you’re going to use will be covered. You want to make sure this won’t end up coming up on your personal auto policy- it is a business expense, therefore you want to make sure you purchase the damage waiver and have your employer cover that cost or reimburse you. 

If you determined that you do have liability only, however for whatever reason you really don’t want to buy the insurance the rental company provides here’s what you do: 

Call your insurance agent and request comprehensive and collision full coverage for a week or however long you are going to need the rental. This may cost you around $3-$5 for the week mark. However, make sure to keep in mind what we spoke about when it comes to getting in an accident. Since it will be your personal coverages you still have to deal with claims, hassle, etc. But at the end of the day you can weigh the pros and the cons and figure out what solutions fit you best. 

As usual we are readily available for any questions that you may have! 

We hope we made your future car rental experiences a little bit more Easy Peasy.