Making sure that a rental car is properly insured may not be an easy decision for some people. It does not help that a lot of people arrive at the rental company before thinking about it. Not being prepared can cause renters to get coverage they do not need or gaps in coverage. Before renting, it is recommended that you speak with your car insurance agent and, if you pay with a credit card, your credit card company.
1. Your auto insurance agent
You need to know what coverage you have on any vehicles you own. Many times, your coverage in your car insurance policy goes with you when you rent. If you use the rental for business, though, that may not be the case.
If you have removed one or both of two coverages (comprehensive and collision) to help lower your auto insurance premium, then your car insurance policy will not be able to offer you any coverage if someone steals your rental or if it becomes involved in an accident.
You may also want to find out if your car insurance company helps you pay for towing charges, loss of use and/or administrative fees. There are companies that have insurance riders available to their insureds to help them cover some of those expenses, and it can be cheaper than acquiring coverage via the rental company. However, a lot of insurers do not cover diminished value, which happens after a vehicle is damaged in an accident and then repaired.
2. Your credit card company
Which bank you have your credit card with and/or your credit card company effect which insurance benefits are available to you. Even your credit card level may be a factor. A platinum level card may come with better insurance coverage than a card with a silver or gold level.
Typically, credit cards only provide coverage if a rented vehicle is lost or damaged. There may not be any coverage available for possessions, other cars or items that belong to others. The credit card may also lack coverage for any liability in the event that anybody gets hurt or dies. It is possible that there could be some coverage for having your rental towed, but it is unlikely that you would have any coverage in regards to administrative fees or if the car has a diminished value. Knowing what coverage you have through your credit card is important so that you do not accidentally assume you have more or less coverage than you actually do.
Credit cards have a toll-free number on the back that you can use to inquire about what you are covered for and how much coverage you have. If you are thinking of depending on what you have through your credit card, it would be wise to request that they send you a printed copy of their coverage information. Usually, any benefits available to you through your credit card would be secondary to your car insurance policy or any insurance you purchase from the rental company.
If you happen to have multiple credit cards, you could call each to find out which one offers you the best level of protection.
3. At the rental company
Insurance is regulated on a state level so your coverage and how much it costs may vary. Renters, though, usually have the following coverages to choose from:
a. Loss Damage Waiver (LDW)
Technically, this is not insurance. It does, though, help “waive” all or some of the financial responsibility if the rental is stolen or becomes damaged. In a lot of cases, there is coverage for “loss of use”, which is when the renter is charged by the rental company for time a damaged car cannot be used. There also might be coverage for administrative fees and towing.
However, any waiver may be voided if speeding, driving on non-paved roads or drinking while driving led to an accident. If your car insurance policy has coverage for comprehensive and collision, call your insurance agent to ensure you do not pay for something you already have. LDWs tend to cost somewhere from $9 to $19 per day.
b. Liability Insurance
Rental companies are required by law to provide at least the minimum amount of insurance set by the state. But, that amount tends to be low and provide little protection. If your car insurance policy has a better level of protection, then you could go without. The extra insurance may cost $7 to $14 per day.
What could be more cost-effective is an umbrella liability policy. This coverage sits on top of your insurance for your car and/or home and provides extra protection, like when you have an accident in your car or in a rental. This policy may cost $200 – $300 for one year of $1,000,000 of coverage. Additional coverage is added in million dollar increments and could cost $50 to $100 for each additional million.
For anybody that does not own a car yet frequently rents vehicles could look into getting a non-owner liability policy. It provides liability protection when renting a vehicle or when driving a borrowed car.
c. Personal Accident Insurance
In the event of an accident and injuries occur, this offers coverage to you and any passengers for medical bills and costs for an ambulance. Per day this could cost about $1 – $5, but if you have good health insurance or you have personal injury protection through a personal car insurance policy, you may not need it.
d. Personal Effects Coverage
This comes into play if anything you own is stolen from the rental. This may not be needed if you have off-premises theft coverage on a home insurance policy or a renters policy that would cover costs minus your deductible. Otherwise, this coverage could be $1 to $4 per day.
If you are a frequent traveler and take expensive items with you, look into getting a personal articles floater under the insurance policy for your home. This floater protects valuables while at home or while traveling anywhere in the world.
4. Other things to consider
Age matters. States have age requirements and rental companies have their own age requirement which may differ from the state. Some rental companies may also look into your driving and/or credit history so check with them before arriving to pick up the vehicle.
If you will be leaving the country, call your car insurance agent and a travel agent (if used) to see what you need to do if not already adequately insured. For example, rising crime rates in Mexico are a concern for rental car companies and it might be difficult to rent a car to get there. The minimum insurance requirement for Mexico is civil liability insurance in case you cause damage or become injured. Our liability insurance is invalid in Mexico when it comes to bodily injury, although some policies may cover physical damage. But, do put in a call to your Miami insurance agent to confirm what coverages do and do not go with you to Mexico. Some towns near the border offer Mexican rental car insurance in case you want to be as protected as possible.
Note: If traveling abroad and want to rent a car, some countries may require an international driver’s license.
Vehicles are rented every day whether it be for business or personal use. When it comes to being protected, not everything may be affordable but it is important to do what you can. In most cases the majority of people that rent a vehicle may not have any accidents, cause any property damage or have their vehicle stolen but the future is always an unknown and it is better to have insurance coverage and not need it than to need insurance coverage and not have it.
At Filer Insurance, Inc., we have been providing Home, Auto and Business Insurance in Miami and South Florida since 1919. We would very much like to have you as one of our customers. Please give us call or come by our office for a free quote on your insurance.
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