Car Rental Insurance
One of the most frequently asked questions about auto insurance
is: Am I covered if I rent a car, and should I buy the insurance
the rental company offers?
The answer is not so easily given. If you currently have an auto
policy with liability limits acceptable to the rental car company,
and you are renting a car for personal use, then you're probably OK
as far as liability coverage goes.
If you are renting a U-haul or or other types of trucks, or if
you are renting a pickup or van for business purposes, then you
should probably talk to your agent because you probably will NOT
have coverage under your personal auto policy. In these cases, you
should purchase both the CDW and liability coverage from the rental
company.
Whether or not the car itself is covered and whether you should
buy the Collision Damage Waiver offered by the rental car company
gets a little trickier. If you carry comprehensive and collision
coverage on one of the vehicles insured on your auto policy, then
this coverage should extend to the rental vehicle.
There are however, some compelling reasons to purchase the CDW
from the car rental company. I could go into the reasons here, but
William Wilson, the Director of Education of the Independent
Insurance Agents of Tennessee, has done a great job outlining the
Top 10 Reasons to Purchase the Collision Damage Waiver When Renting
a Vehicle. I'd recommend reading this before renting a vehicle,
and you agents out there might want to print out a copy to keep on
hand the next time you are asked about it.
Several Final Caveats
Make sure you read the CDW you sign at the rental company. Many
CDW's will only provide coverage under certain restrictions. Some
common restrictions include:
Only listed drivers are covered. Make sure you tell them about
everyone who may drive the vehicle, and then don't loan it out. A
good rule of thumb to remember here is: "If you don't own it, you
can't loan it."
Geographical restrictions: ie.- you're not covered on that long
winding road that goes up between the mountains on the Big Island of
Hawaii and similar dangerous passages. The only options here are:
1) Don't drive there or
2) Go ahead and do it anyway (like I did), and use your own policy
if anything happens. (It was a nerve-wracking, yet breathtaking
drive, by the way).
Also, on your own policy, be sure to find out who is covered when
renting a vehicle. Oftentimes, it is the NAMED INSURED, or a "family
member" who is covered when renting a vehicle. Your resident
girlfriend or boyfriend may be listed as a driver on your policy,
but they probably won't have coverage for rental vehicles. The same
would go for ANY resident non-family members in your household.
As always, talk to your agents about it. Make sure you tell
him/her exactly what type of vehicle you are renting, what it will
be used for, and who will be driving it. Also, be sure to call them
sooner than 1 hour before you are leaving for the airport. This can
be a complicated matter, and they may need to do some quick research
to give you an accurate answer.
