Once you’ve found that great rate for a car rental, you’ll inevitably be offered coverage by the car rental company -- which could potentially double the cost of using the vehicle.
Is it worth it?
Coverage from your own auto insurance policy typically applies when you are using a rental car for personal purposes. But there are other considerations, says Pam Hansen Alfred, a State Farm agent in Great Falls.
“This has gotten a little bit more complicated over the years,” she says. “It used to be if you rent a vehicle and you have comprehensive coverage and collision coverage on your own vehicle that it would extend to that rental car. But there are other charges that the rental car companies charge now if one of their vehicles get into an accident.”
One of those is loss of use.
“Loss of use says because that car was damaged, they can’t rent it out,” she says. “So they’re going to charge you for it.”
Hansen Alfred advises adding an endorsement to your own auto insurance policy to cover loss of use.
“It isn’t usually a standard coverage that is written,” she said.
Even more critical, Hansen Alfred says, is avoiding being on the hook for diminished value.
“Most rental cars are new. You wreck a rental and it can be repaired properly,” she says. “But when the car rental company goes to trade it in they’re saying it isn’t worth as much because it’s been in an accident. They want the customer who wrecked that car to pay diminished value. So it’s critical to find out if your insurance company covers that.”
If the policy doesn’t cover it, you might be able to get coverage through the credit card used to pay for the rental, she says. Credit cards often automatically cover rental cars rented in your name. It’s secondary coverage, so your auto insurance policy will pay out first.
“If that doesn’t work, then maybe you should consider buying the car rental company’s insurance coverage,” she says. “The advantage is that if you do wreck the rental car, you don’t have to pay a deductible. The disadvantage of that is that it’s terribly expensive.”
You might consider buying the rental insurance if:
- Your personal car insurance has a very high deductible, doesn't include adequate collision or comprehensive coverage, or doesn't cover rental cars.
- You have no other source of coverage. For example, if you don't own a car and have no personal car insurance policy, and you're not using a credit card that offers rental car coverage.
- An accident might cause your insurance rates to go up or lead to cancellation.
- You're traveling for business, and your personal insurance policy won't cover you.
- You're traveling in another country and the insurance agreement or local laws prevent you from leaving until you've fully paid for any damages that might occur.
Pam Hansen Alfred’s office at 2817 10th Avenue South in Great Falls provides auto, home, business, property, life and health insurance. A visit to www.pamhansenalfred.com or call to the local office at 406-453-6010 or 800-823-3620 will provide more information about coverage options.
2817 10th Ave S
Great Falls, MT
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