Most people think that when they rent a car, they don’t have to purchase rental insurance, but that is not always the case. You might want to consider purchasing rental car coverage from the rental agency for several reasons.
First, do not be confused about the rental reimbursement on your policy and purchasing rental car coverage if you rent a car. There is a difference between the two, and both are paid out for different reasons.
Rental reimbursement is coverage on your automobile policy that will pay you a certain amount of dollars a day up to a maximum amount of days to rent a car if your vehicle is being repaired due to an automobile accident.
Rental Car Coverage is extended to a rental car you rent for personal use. Most insurance companies will allow you to extend your current automobile policy coverage to the rental vehicle up to the policy limits. You may still want to purchase extended coverage as your current policy limits may not be suitable. You can usually purchase higher limits from the rental agency for a minimum cost.
Depending on what type of policy you have makes a difference in what kind of coverage will be extended to the rental car. If you do not carry collision or comprehensive coverage on your policy, that coverage will not open to the rental car. So if you are in an accident of any kind, damage to the rental vehicle WILL NOT be covered, and you will be liable for repairs.
Even if you have collision and comprehensive coverage on your current policy, coverage is not guaranteed to extend. The type of insurance carrier you have makes a difference as well. Most standard insurance companies have a clause in the policy that states that policy limits will extend to a rental car; however, not all insurance companies are the same. Some Non-Standard companies, regardless of coverage limits, will not extend coverage to a rental car. So it is up to you to purchase the coverage when renting a car.
As a consumer, you must check with your agent to see what type of policy you have so that you can make the right decision when you are faced with whether or not you want to purchase rental car coverage.
Don Westerfeld has been active in the field of Insurance and Financial Planning since 1997. Don grew up in Indiana later moving to Lakeland Florida where he continues to reside with his wife and children. When he’s not in the office you can find him enjoying the great outdoors. He has served on several charitable business and non-profit organizations and continues to provide guidance, advice and support to local charities.
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