Ask Mike: Initial Here, Please
Hey Guys,
Gas prices and airfare are ludicrously high, but folks still want to travel during the summer. Often that involves renting a car. But before the rental company lets you crank the A/C and zoom over speed bumps at 35 mph, you have to answer a very important question: Do you want the insurance?
I admit that I never know what to say to this. I seem to remember hearing that regular car insurance policies and most credit cards will cover accidents that occur in a rental car. But is that the truth or merely wishful thinking? I stumbled upon a question from gameboi and checked out the responses.
Not surprisingly, the answers varied. One community member says you should always get the insurance, because its better to pay $20 now than $2,500 later. Maybe so, but other folks wrote that a driver’s regular insurance policy will likely cover anything that happens in a rental.
The truth, I suspect, is somewhere in between. The answer will vary based on the person’s own insurance policies and credit cards. The key is do your homework before you find yourself at the rental car counter initialing your life away.
First, check with your auto insurance carrier and ask lots of questions about deductibles, collision insurance, and whether you’re covered if the car is stolen. Also, as I alluded to before, check with the credit card company you use to rent the car. Often, they will provide a level of coverage, and it’s smart to find out the specifics. For example, are you covered if you’re traveling abroad? The Insurance Information Institute offers a nice checklist to work through.
The frustrating truth is that it all depends. Maybe you’re covered. Maybe you’re not. So, skip the surprises and check.
What about you guys? Do you always get the insurance when you rent a car? Have you ever declined it and then regretted it? Leave a comment and share your experiences below.
Thanks for reading,
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i think if your traveling this summer you should just drive. yes it really depends on where your going, but with them charging so much for the ticket, baggage, and more i think its just cheaper to drive. then you dont have to deal with rental car junk lol
You carry your liability with you into any car you have the owner’s permission to drive, is what my own insurance agent told me. A policy that had fine print saying it didn’t do that, would be a ripoff, IMO. Also, when you give someone permission to drive your car briefly, it’s covered. The insurance offered at the rental desk that I hesitate to decline is Loss Damage Waiver, which costs something like $10/day (not by mile) and covers the rental vehicle itself. That is, if the car is scratched or dentedm or totaled, while you have it, LDW covers you. Up to $25000 or something like that – it’s supposed to be total coverage. As I understand it anyway, you could trash the car and not have to pay, if you bought LDW.
I used to buy it, but now I take my chances. It’s a big addition to a rental bill, especially I am not driving that much in the car. I think you just have to gamble, and base your decision on the same things insurance companies do: how old are you? what’s your driving record? What does your own car look like? and how far & where & under what circumstances will you drive the car?
My amex covers me 100 percent abroad but NOT all countries
Here, My insurance covers everything and the Amex
or most credit cards become secondary ie your deductible only
Liabilty goes with you on any car IN the US
The only gap is loss of use by the co
My amex got them to waive that in a claim I had in Europe years ago
So
It shoul be a combo of your policy and your credit
unless abroad where if its a covered country
the credit card is the only coverage you have !
I just wanted to address something the previous commenter said.
“You carry your liability with you into any car you have the owner’s permission to drive, is what my own insurance agent told me.”
This is actually going ot vary depending on where you live. I know that when I lived in California many, many years ago this was true. After that I moved on to the state of Virginia where the policy actually applies to the individual car, as well as to some extennt, the driver. For instance, my parents have three drivers and three cars on their policy and each person is assigned a vehicle, but any person is covered driving any vehicle. The assignments really only aid in keeping the premiums down. If I were to visit them, as an out of state driver, and be involved in an incident in one of their vehicles they would be liable, not me.
As fate would have it i had upped our deductible, and sure enough we had a minor accident, (whew) no other vehicles invloved, etc…..from $250 to $500 so that was a minor ouchie, after the accident on a mountain road no less, we were still able to drive the car back from TN to Ohio…….fortunately no major hits to the car, just our pride a bit…….ALWAYS drive very cautiously on mountain dirt roads!!!
AAA was really great, a fellow came within an hour of the ‘ahem’ accident. and pulled our car back onto the road, it was sideways in the ditch on the mountain side (hill) if it had happened on the other side of the drive we’d have probably gone over the edge and it would have been ‘bye bye’ ………..once in a while we recall what happened and it is just amazing, that within two -5 mins of the incident we had assistance from another person who lived in that immediate area and the AAA fellow was very helpful…………ALWAYS HAVE AAA coverage no matter how much or how little you drive, the cost is worth every penny of the knowledge that you will have help availalbe day or night, and SLOW DOWN when driving, keep within the speed limit, your life and the lives of others is sooooooooo important, HAVE A GREAT DAY. Sharon T. from oHIo……….land of the Buckeyes and other worthless nuts, lol
GO BUCKEYES!!!
I used to work rental car, and I can tell you, take the damage coverage. It doesn’t cost that much, and it allows you to completely destroy that car in an accident, and walk away, your fault or not. Most people assume that their own insurance will cover them, but this may not be the case. You must have a clause in your coverage that states coverage of other vehicles. As for credit cards, that card will only cover you if you use it to pay for the vehicle, you are the driver at the time of the accident, and sometimes not even then. It is a nice selling point for them, but your credit card usually does not cover the rental. If you damage the rental in any way, from a major accident, to a small ding, you are responsible. Would you rather pay the 20 dollars (typically) and be done with it, or would you rather pay for the repair with your insurance, have your rates increase, and have paid for a car you will never see again. Also, having worked for several rental car companies, if that car is damaged, the rental company will take it to the best body shop in town for repairs. This means that you will be paying the maximum amount of money possible to repair this vehicle. It all comes down to how much time and money you are willing to spend. An extra $100 dollars and 5 minutes? Or Thousands of dollars and months of your time?
Your insurance probably covers any liability as far as another vehicle is concerned but, unless its comprehensive, probably doesn’t cover the vehicle you are driving. If you’re like me and drive a paid up vehicle most of the time on which you only carry liability, then when you rent a car you get the insurance. Not for the coverage of the other car, but to cover the car you are driving. Because, rental companies are not shy about charging/suing you for the damages regardless if you did it or not.
1. Check with your insurance agent—have them write you a brief letter as to the coverage.
2. Check your homeowners insurance…sometime covered there..
3. Use a credit card that offers free insurance automatically…my mastercard pays for anything that my insurance company won’t…
4. Don’t fall for the line that you will need coverage to cover your deductible…
5. I have had two small accidents (very minor) and my insurance covered…they even handled all the paperwork. My daughter had a fairly significant one and the same thing held true…her insurance covered her 100%…
6. I rent cars 5-6 times a year and have NEVER paid for insurance at the counter.
I worked at an insurance company. Bottom line is if you have full coverage on your personal auto insurance, that same coverage is extended to the rental, you don’t need to buy the extra insurance. However, if you don’t have auto insurance, then you should buy the insurance.
yes,better to be safe than sorry
yes,better to be safe than sorry
get a life mike
don’t take the insurance if you are covered by your own.
Insurance is simply a gambling bet between you and the insurance company. You ante in $20 and bet that you’re going to get in an accident. They are betting you won’t. It’s a cheap bet, do it.
Decline all the coverage, and buy the gas that’s in the car. Your insurance covers everything and the cost of the added coverage is guaranteed to be a rip-off (why else would they offer it?).
I’ve rented LOTS of rental cars over the last 30 years and my total cost as a result of not having the insurance is $140. And even that was only half the $280 repair bill because I argued the problem was a warranty issue on the car, not anything I did. So they let me pay just half.
I’m sure I would’ve paid way more than $140 for all the coverages over the years. So I’m way ahead.
On a related note, you should decline all the extended warranties they offer you on consumer electronics. Same deal — cheaper to buy a new one then pay for all those warranties.
I f you rent a car that is worh much more than your own car. Many people with older cars or smaller cars rent cars therefore.
I’d take the colision damage waiver because.
I think your colision is limited to your coverage on your regular auto’s value and no more.
What if you rented a car worth 25,000.
Now you drive a six year old toyota worth less if you totaled your toyota would your company pay you for a new one i doubt it.
I am renting my first car next week and I have checked with my insurance company and was told that my rental car would be covered and plan to decline the insurance offered to me when I pick up my rental car.
I used to work for a car rental company and then and now will always get the collision damage waiver.
Yes, for most people, their own insurance will transfer over to the rental car…MINUS the deductible. That means that regarless of fault, the rental car agency has the right to collect your collision deductible when you return a damaged vehicle. If the accident was not your fault and you have 3rd party information, the rental car will then pursue the other driver. If it is proven that you were not at fault and the rental car company can pursue the other party for damages, you will get your deductible back. If it was a hit and run, vandalism or the accident was your fault, you will not get that deductible back…you are responsible for that out of pocket..the rest will be collected from your insurance company. A collision damage waiver will protect your deductible and will make you fault-free. Your deductible will not be collected and even better, your insurance company will NOT be notified..therefore you will not be charged premiums or have points added to your driving record. Before I worked at the rental car company I rented a car in CA and wanted to use my VISA collsion coverage…BAD MISTAKE…after my windshield was damaged and I was back at home, they asked me for all sorts of paperwork and photos that I did not have and only told me after I had already left CA…they said it would take them months to investigate..in the mean time I was told by VISA I HAD to charge the rental bill and the collision deductible to my VISA card in order to receive their service. This balance accumulated interest over the months that they had me waiting for an answer, and that’s when i realized they were a SCAM. Even if they do end up reimbursing you for your collision deductible, they do so from the money they just made by charging you interest fees on the balance you had from your rental.
On top of that, it’s a HASSLE. For anybody who does not have time to waste and spend it on hold with a credit card company, I would highly suggest to NOT DO IT.
I usually don’t purchase the extra liability, because every rental car in MOST states HAS to carry liabilty (i think exception NH??)..therefore you are covered for the minimums…now, if there is damage over your minimums your insurance can still be pursued.
In states like NY, where there is no cap on liabiltiy (meaning, someone can sue you for all you’ve got in case of an accident), purchasing the extra liability insurance is advised.
I personally will always purchase the collision damage waiver, mainly because I HATE dealing with insurance paperwork and would much rather just hand them the key and be on my way…AND…I would not want to risk my premiums increasing because of a stupid fender bender on a car I will never see again.
wow, Amanda’s input was very helpful & made a lot of sense. I think i’ll consider the damage waiver from now on!
I would get it, car rental companies are like the mafia boss, if you dont get insurance, lets say there are reprocussions. Prior small damages will be scrutinised more carefully, the vehicle will be inspected more carefully, because the bill is on you.
I have always purchased the liability waiver for a rental car. I would not do it now though – thanks guys.
This column from the AARP says it all about insurance and rental cars. It appears some rental car agencies are billing customers for “damages” that the customers did not cause.
http://www.aarpmagazine.org/money/on_your_side_MJ08_rental_car_damages
AARP (American Association of Retired Persons)
i work for AVIS Rental Car. if you pay Avis for insurance then anything that happens to the car avis will be reliable to pay to have it fixed,. If your own insurance covers an accident then you insurance provider will pay for damages. the catch is that, if your own insurance pays for the damages then your insurance rate will rise. as if you got insurance through avis, no other charges will be charged to you. hope this makes since.
99.9% of insurance companys cover your rental CAR one thing to remember most wont cover a rental TRUCK, so still pay for that insurance when you rent a u-haul etc!!!
okaiiiy
g
j
thanks bro for that sweet and important post
Thanks, Mike, for posting this question and answers. The question perplexes many. The answers, particularly those of Amanda and Okaiiiy convince me I should always buy the insurance offered by the car rental company.
I asked my insurance agent about this very thing and she told me that my auto policy would indeed cover a rental minus my normal deductible. An agent at a car rental agency told me they can charge me for loss of use were it to be in an accident. I asked my insurance agent about that and she told me if that were to happen, my insurance company would ask for proof that the rental agency was 100% rented out on any day which the car I rented was in the shop. If they can not provide proof that they were 100% rented out they can not make you pay for loss of use. My insurance agent told me it’s extremely rare for a rental agency to be 100% rented out. I have full coverage insurance with State Farm and I live in Missouri if that helps. Based on that info, I do not get the insurance coverage offered by the rental agencies. Hope this helps:)
I worked for one of the top auto insurers for about 6 years in the claims processing department and we had TONS of claims involving rental cars. Here’s one tip: if you already have an auto insurance policy and you’re renting a standard sized car, you will never ever ever need to buy the extra insurance if you call and ask your insurance company,”Are rental cars covered?” and the answers usually yes.
It’ll actually state all this in the policy manual they send you but of course, noone can read or understand the policy manuals. They buy the policy assuming certain things are covered (and believe me, they ALWAYS assume) or not knowing that a rental can be covered. It’s right there in the policy. Also, when you start dealing with all of those multiple coverages for the rental i.e. your own policy, the extra insurance you buy, and the insurance some credit card companies provide, some of those won’t even apply unless you rental some Hummer or something. One’s going to be the primary coverage and then the secondary, etc. Hope that helps. Honestly, they should teach an insurance policy course in high school since you will be required to have some kind of insurance in your life. No one understands insurance. It’s insane.
Typical rental car insurance is a hidden built in profit bump on the sale. Make no mistake, having you and the rental car insured is critical. All rental agencies require a credit card to rent, you might as well select a card that has rental car insurance as part of the credit card company perks. This way, you’re not paying additional premiums at the time of rental. Do not waive the rental company coverage if you use a credit card that does not offer rental car insurance. If you have a claim that’s your fault, you will be stuck with the entire repair bill and any medical injury costs if you are at fault.
Why is it that when anyone else asks a question like this on the Q&A Board it gets removed for being too chatty?
Always say yes…Because the difference is that there car insurance is paying for it instead of your’s and you never have to worry about it again.
Your probly not covered in the rental car unless your name is on the insurance. You better check with your insurance agent. If your name is not on the insurance policy then you better buy their insurance.
There is a bottom line here. Skip the rentall car insurance and and claim something on your own and your rates may rise. Make another claim later on your personal vehicle later and you will be smacked with rates enough to make your head spin.
Sorting all of this out without rental insurance will cost you some serious time and even money.
Get the insurance. If you can;t afford it figure something else out.
Just to let everyone know and THIS IS FACT!! Your insurance may….. I said may.. cover most but what they wont cover is the “down time”. MAny people dont know that if you total a car and the comapny has no car to rent… you now pay rental fees. If you wipe out the front end and the car is in the shop for 4 weeks…. your a 4 week renter. This is not a joke the only thing that will save youis buying their insurance. This is from someone who has excellent insurance, paid on their visa and learned the hard way… yeah bad but take the insurance.
Our insurance company suggests we call them from the rental company and find out if we are covered. Our credit card company has given us a number to check also.
Yeah gas prices suck. I always get the insurance.
now, when are you guys going to spend the time you use to create stupid blogs to actually answer our emails in person?
i think we ought to blame the opec for escalating gas prices.
……………………………………………
saralee
http://www.christian-drug-rehab.org
I worked in insurance for ten years. We always told our clients to buy the rental car insurance from the company you are renting from. Why, if something happens you walk away! If you rely on your personal auto insurance it could keep you snarled up in a mess for weeks, months, and even years. If you don’t like the cost just keep in mind that if something should happen what would it be worth to walk away and finish your vacation vs wasting the rest of your time and money on a car accident. Even if there is a person that gets “hurt” you just let them take care of ALL of it! I think it’s the best money you can spend for a vacation without hassels!
These comments show how uninformed people are. Mosts auto insurance policies cover you when you drive a rental. So when you drive a rental you have the same insurance as when you driver your own car. Now you have a deductible on your own car, say its $500. Would you pay $11/day to not have to pay the 500. if you have an accident. In order to break even, you’d have to have an accident every 45 days. So unless you expect to have 10 accidents a year, the insurance is just a waste of your money.
GOOD WAY U PIUT THINGS YOU MAKE IT SO EASY TO UNDERSTAND AND NOT SO HARD TO UNDERSTAN AND THINK YOU FOR HELPIN WITH OUR QUSTIONS AND PUTING IT EASY!!!!!!!!!!!! XOXOOXOXOXOXOXOXOOXOXOOXOXOXOXOXOXOX
We are currently being sued by a car company for $25,000 to pay for a rental car that our insurance company is refusing to pay for because it was stolen. We thought that theft was covered and it was – as long as a whole list of conditions are met. We didn’t meet one condition so they flat out refused to pay even part of it. Now, the rental agency is coming after us.
Worse still, it was rented for corporate business and the employer won’t pay for it either.
I had an accident in a rental car sevral years ago. My credit card company paid the $1,000 deductible and my insurance company paid the balance (probably $500.00). If you rented a car for company business, your employer IS responsible. My company has a rule: Do NOT buy the insurance. The company’s policy covers rental cars used for company business. The only time I could have a problem is if I stayed over for a day and took a side trip on my own time. If you do that, make sure your policy covers you or buy the insurance. It’s expensive, but what’s $20 a day compared to thousands if you have an accident?
With experience as a claims adjuster for commercial accounts and exposure to personal auto claims as well, it is obvious to me that auto insurance is rarely adequately explained to the consumer.
Business and personal auto insurance differ considerably. Terms and conditions for business are more detailed than personal. A personal auto carrier will deny any claim for a vehicle used for business purposes UNLESS there is no other coverage afforded for the vehicle (i.e. business auto policy or rental agency). The carrier will likely deny liability coverage as well (i.e. damage to other’s property or injury to others) but many carriers pitch in or settle in the end. The key is to file a claim with everyone involved immediately. The rental company, the credit card company, your personal carrier, the business carrier, etc. Once they are on notice the statute of limitations in the state where the loss occurred applies. Your claim could be denied if you fail to report it right away. Don’t assume you are all set, file with everyone and let them figure out who pays.
Circumstances differ. Talk to your agent, the vehicle owner’s agent AND the carriers. I could tell you about agents selling coverage they do not understand. There are too many forms to remember everything. Talk to your carrier as well, different companies interpret parts of the policy differently and small differences in legalize can cause big headaches later.
Some states have a waiver of deductible for rental vehicles in the personal policy form. Residents of those states are fully covered in a rental vehicle within the continental United States if use is within the policy conditions. Most states it’s simply that your current coverage and deductible apply to a rental vehicle. BEWARE if you do not carry collision or comprehensive on your own vehicle and opt to not purchase the LDW. You will be on the hook for damage.
If you are driving a vehicle that you do not own (or did not rent) with the owner’s permission then the owner’s insurance is primary. Your personal insurance would be excess coverage. The reason being that a driver with permissive use is defined as an INSURED under most personal and business auto policies. There are exceptions, educate yourself before you jump in that driver’s seat.
Margaret…maybe speak to your agent, your state’s insurance authority, and/or an attorney to resolve the issue. Certified letters to all parties involved reviewing the facts of the loss, the individuals involved (including the business), and the financial liability as you understand it may help you. File a claim to reserve your rights under the policy coverage. Don’t just let someone tell you it isn’t covered. Ask for it in writing.
tMarie, down time in the policy is covered as “Loss of Use” and normally has a set limit in the policy terms. There is a daily cost limit and a limit for the number of days covered. Most rental agencies will settle with your carrier and not charge the customer the difference. If they try to charge, negotiate. What are the chances the vehicle you had was out 365 days a year? Can the agency support they are losing all that revenue and it’s justified for them to charge you on top of what your insurance company already paid?
Bottom line…don’t pay for something you don’t need, find out what your coverage is. You could just throw me the money you’re trying to give away…
From personal experience…
I’ve had two incidents while renting cars. When I returned to the rental agency I pointed out the damage (both involved plastic pieces, one under the front bumper, one ran the length of the car under body panels), and as I had purchased the insurance it was “OK, you’re good to go”.
I’ve had one incident involving my personal insurance. I’ve had this policy for years, it was my first claim, and it took months and a lot of “communication” to finally be reimbursed. Which added points to my policy.
My advise? Get the rental insurance and be worry free. No surprises, no personal policy rate changes, you’re just covered.
The CDRP Plan allows you to lower your existing automobile insurance premiums without having to change you insurance company or agent. The CDRP eliminates the need for you to pay a “Lump Sum” collision deductible out of your pocket again.