There are more options for renting a car than ever before—bricks-and-mortar, peer-to-peer and membership-based car sharing services. While this means more choice for renters, it also creates more questions about insurance coverage. Use these tips to properly insure yourself when renting a car, and avoid wasting money on duplicative coverage.
If you're looking to rent a car, depending on your needs and location, there are a number of alternatives—the traditional brick-and-mortar companies, peer-to-peer car services and car sharing programs—each with its own insurance parameters. It pays to understand your existing coverage first, and then look at your rental insurance options.
No matter what company or what kind of company you're renting from, the most important step is to read and understand the car rental or car sharing agreement. Most companies clearly state what is covered as well as the supplemental coverage that can be purchased. If you don't understand, have the rental or car sharing company representative walk you through.
If you're renting a car, check your own coverages first
Before you enter an agreement with any type of rental service, maximize use of the insurance you're already paying for and avoid paying for duplicate insurance.
If you own or lease a car and/or have homeowners insurance, call your insurer to first check the following:
- How much coverage you currently have on your own car – In most cases, whatever auto insurance and deductibles you have on your own car would apply when you rent a car (providing you are using the rental car for recreation and not for business).
- If you still have collision or comprehensive – If you dropped these coverages on your own car as a way to save money on your car insurance, you may not be covered if your rental car is stolen or damaged. Insurance rules vary by state, so it is best to check with your insurance professional for the specifics of your policy.
- If you are covered for administrative fees, loss of use or towing charges – Check to see whether your insurance company pays for—or provides a rider for—additional fees.
- Whether your homeowners or renters insurance covers the loss of possessions – These policies (not your car insurance) generally cover your belongings if they are damaged or stolen out of your vehicle.
The credit card you use to rent a car may also provide some insurance. Though coverage is likely to be limited—for example, it may only cover the deductible if you make a claim—it's worth knowing what protections it will provide.
- Know that benefits differ – Insurance coverage can depend on the company or bank that issues the card or even the level of card. For example, a platinum card may offer more robust coverage than a green card. If you have more than one card, you may want to compare what insurance they offer for car renters.
- Contact the credit card issuer to find out what they cover – If you are depending on a credit card for insurance protection, ask the company or bank that issued the card to send you their coverage information in writing.
- Credit card insurance benefits are usually secondary – That is, they will kick in after your personal insurance policy or the insurance coverage offered by the rental car company are utilized.
If you have any more questions on renting a car, your insurance coverages, or any of your insurance needs you can contact us today.
Source: Insurance Information Institute