“Should I buy the insurance the rental car company is trying to sell me?” We get this question a lot, especially during summer travel season. The honest answer is that it depends on what you already have in place — and most people are surprised by what they find out when they actually look. When renting a car, there are three areas of coverage to think about:
Liability – In most cases, the liability coverage on your personal automobile policy will extend to a rental car used for personal travel. This protects you if you cause bodily injury or property damage to someone else. If you are comfortable with the limits you carry on your own vehicle, there is generally no need to buy additional liability from the rental company.
Physical Damage – This is where things get more complicated. Your personal auto policy may extend physical damage coverage to a rental car, but only if you carry comprehensive and collision coverage on your own vehicle, and only for personal use rentals. Keep in mind your regular deductible will still apply, so if you have a $1,000 deductible and ding a bumper, that’s coming out of your pocket. Credit card coverage can also come into play here, but the fine print in most card agreements contains enough restrictions that we would not count on it as your primary protection.
Loss of Use – This is the one that catches most people off guard. If the rental vehicle is damaged, the rental car company can charge you for every day that car sits in the shop and is not being rented out. These charges add up fast, and in most cases your personal automobile policy will NOT cover this.
In light of the loss of use exposure alone, we generally suggest purchasing the physical damage coverage the rental company offers. The peace of mind is worth it, and if something does happen, all you have to do is hand over the keys and get on with your trip. If you have questions about how your current auto policy applies to rental vehicles, give us a call before your next trip and we can walk through it together.
