We are getting into Winter and bracing ourselves for the cold. Hopefully some of you have a fun trip planned somewhere warm. For many trips that may involve renting a car. As you complete your car rental contract, the associate renting you the car will remind you of your responsibility for the car and offer supplemental insurance. Before you get that deer in the headlights look, here is some useful general information on the average car rental situation.
The Good News
In most situations, the same coverage you carry on your personal auto will extend to a rental car. Your personal auto liability coverage would cover bodily injury or property damage caused by you while driving the rental car. If you carry full coverage, your auto insurance will cover damage to the vehicle itself subject to your deductible.
Wait Just a Minute
I’ve told you the good news that your personal auto insurance extends to a rental car. So what’s the problem? There are a couple of situations not covered by the standard personal auto policy.
Loss of Use- If your rental car is damaged while in your possession the rental car company may charge you for loss of use. This is the rental company’s loss of rental income while the car is being repaired.
Diminution of Value- Diminution of value is the decrease in value of a car after it has been wrecked. For example, let’s say a car is worth $20,000 before it is involved in an accident but is worth $15,000 afterward. You would be responsible for that $5,000 difference.
Some More Good News
We’re talking about your vacation here. I can’t end this blog on a downer. There is more good news. Many of our personal auto insurance carriers offer auto insurance endorsements providing a package of extra coverages. Two of the common coverages included are loss of use and diminution of value for rental cars. The cost of this endorsement is often as little as $20 or $25 per vehicle per year.
So should I buy rental car insurance?
If you have full coverage and are insured with a company that offers the coverage endorsement mentioned above, you probably don’t need to purchase coverage through the rental company. Definitely call your insurance agent to see how your policy will respond.