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Berger & O'Neal Insurance Group Blog

All You Ever Wanted to Know About Insurance

Rental Car Waivers & Protection: To buy or not to buy

You’ve got that trip planned to tour the wine country in sunny California. What would be better than driving the coastline with the top down in your rented convertible? We have more choices, options and deals available for car rentals than we’ve ever had before. But do you know if you’re covered if you accidently veer off the road while admiring that beautiful coastal scenery?

A little research is all that is required to ensure you’re adequately covered so you can enjoy that vacation with peace of mind.

Contact your Insurance Agent

If you have a copy of your personal auto policy, you can read through and determine which coverages would apply to a rented vehicle. But unless you speak insurance, you are not likely to fully understand so we recommend that you call your agent and discuss your coverage. Most personal auto policies will provide the same coverage and deductible limits to a rented car for personal use. However, there may not be coverage available if the rental company holds you accountable for “loss of rents”, “diminished value” or administrative fees.

Contact your credit card company

Many credit card companies provide benefits when purchasing or renting property. Insurance benefits offered by credit card companies differ depending on the company and/or the bank that issues the card. You may be eligible to receive some coverage; however coverage may be limited and again, may not cover “loss of rents”, “diminished value” or administrative fees.

Call the 800 number on the back of the card you plan to use for the rental. If there is some coverage available, ask for a copy of the coverage in writing. Keep in mind that any coverage provided by a credit card company would be secondary to coverage through your personal auto policy.

Review the rental car company website

You don’t want to be put on the spot or feel pressured to purchase something you don’t need so read up before your rent. Most rental companies will provide information regarding available waivers and protection on their website. Read about each option before renting your car or picking up your car. Some of the standard options are:

  • Damage Waiver is offered for a daily charge. Damage Waiver may also be referred to as a collision damage waiver, and is not technically an insurance product. It is designed to reduce or “waive” renters of financial responsibility if their rental car is damaged or stolen. In most cases, waivers also provide coverage for loss of use, towing, storage, fees and diminished value.
  • Liability Insurance is offered for a daily charge. By law, rental companies must provide the state required minimum amount of liability insurance coverage. However, these limits are extremely low and may not provide adequate protection if you injure someone or their property. If you have a personal auto policy, your limits of liability will apply. Be sure your limits are high enough to cover losses based on today’s high dollar vehicles and medical costs. If you do not own a vehicle, you may want to consider purchasing a non-owner auto liability policy which will provide you protection when renting a car or borrowing someone else’s car. For the most coverage, everyone should consider a personal umbrella policy. Typically, just a couple hundred dollars per year will buy you at least $1,000,000 worth of liability coverage.
  • Personal Accident Insurance is offered for a daily charge. This covers the driver and passengers for medical and ambulance bills for injuries caused in a car crash. It may also provide some accidental death benefit. In most cases, a personal auto policy would provide coverage for medical expenses subject to policy limits.
  • Personal Effects Coverage is offered for a daily charge. It provides insurance protection for the theft of or damage to items from a rental car. A personal homeowners or renters policy would provide coverage to these items, but may be subject to an off premises limit. A personal articles floater would provide additional coverage to expensive items. To summarize, rental car companies will likely hold you accountable for not only the damage to their auto, but the towing of it as well as the lost income of not being able to rent it while it is repaired. Additionally, they may hold you accountable for the diminished value to the damaged vehicle. It is best to understand the coverage you have already purchased through your own insurance company, understand what the rental car company will present to you and select coverage options which will protect all of your assets in the event of a significant loss. In the end, spending an additional $10-$25 per day may be necessary to keep your home and retirement accounts protected in the event of a large loss. Have questions? We’re happy to guide you through interpreting your coverage options and needs. Call us before you rent your next vehicle.

Berger & O’Neal Insurance Group, Alpharetta