Insurance Policies and Driving Rental Cars Author:    Posted under: Auto InsuranceAuto Insurance by Car TypesAuto Insurance questions answered

Everybody needs a sense of security, especially when the time you spend during your day means having to get in a car and drive to work, school, and wherever you need to be. Insurance takes care of these things for you, and it does pay to have that peace of mind, just in case anything untoward happens.  It goes the same for renting cars.  Whether you’re in a different city, or your car is stuck in the repair shop, you’re going to need to make sure that your insurance will work for you given a situation.

So how should you decide, whether to purchase that additional insurance that rental companies have, or sign the waiver offered by the company as well?

Know your policy. In most cases, your insurance will cover you even when driving a rental. But, it really still depends on what you have signed up for in your policy.  As always, like any insurance policy, it is best to review the terms with your agent and make sure that all loopholes and questions are answered.  If in the event that you know that driving rental cars will be unavoidable in the year of your coverage, it is best to discuss these matters with the expert.  Not only does it depend on the insurance company, but it also depends on the state which you live in.  Depending on these factors, you now have to decide whether to get additional insurance for your rental, or depend solely on your own policy for coverage.   If in case of an accident, the rental car company will be responsible for contacting your own insurance company for the claims.  You may have to pay a deductible to the car company, and in some instances, the insurance may also have to pay for litigation in case the rental company will file for penalties.

Rental Car Additional Coverage. Policies may differ from one company to the other.  The common coverage offered by a rental company includes a Damage Waiver, should your rental car be damaged or stolen.  It also covers Supplemental Liability, should someone file a claim against you while you are driving the rental.  (Note that you shouldn’t purchase this additional coverage if you are insured with adequate liability policies on your car insurance.)  Lastly, it covers Personal Effects Coverage, and Personal Accident Insurance.  However, with PEC and PAI, only you and the passengers of the car are included in the claim.  It does not extend to any third party affected by the accident.

Rental Reimbursement Coverage. Understand that rental reimbursement coverage in your policy does not mean that the insurance company will pay for damages caused by or to the rented car.  This only means that the insurance pays for the rental fees, in case your car is left indisposed because of a previous accident, or in need of repair.

Alternatives. If in case your insurance does not cover rental cars, you can also opt to avail of the insurance that these rental car companies will offer.  It will cost you a little more than your regular insurance policy, but it is better than to have none at all.  Spending a little more will save you the worry of having to go through a financial disaster, should you encounter an accident.  In some cases, premium credit cards also offer insurance if you use that card to pay for your rental.  Like anything else, make sure that you inquire through their customer service if that is indeed something they offer, and to what extent the policy insures you.


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