Overview of Rental Car & Auto Insurance
The reasons to rent a vehicle are many, including during a vacation, enjoying a road trip, needing a temporary replacement, or trying a different type of automobile. So, when you are renting a car, how do you know what insurance you need?
Is Your Policy with IMT? Your Rental Might Be Covered!
For those who own a vehicle and have private passenger automobile insurance, there is strong agreement that accepting the liability and medical protection offered by the rental car provider only serves to duplicate the protection already provided by a personally owned auto insurance policy. As long as you have “Other than Collision” (Comprehensive) or Collision coverage on one vehicle on your policy then your rental car is covered by IMT. In the event of a loss the deductible is waived and IMT agrees to pay the full “loss of use” for the rental vehicle.
The rental car coverage extends to the policy territory which includes the United States and its territories or possessions, Puerto Rico, and Canada. Rental cars on a Minnesota policy are always covered as long as you have liability coverage on your vehicle. Minnesota does not require comprehensive or collision coverage.
For Wadena Personal Auto policyholders, purchasing coverage from the rental car company may not be necessary. If at least one vehicle on your policy carries either “Other than Collision” or “Collision” Coverage, we will pay all reasonable expenses you incur resulting from a covered accident or other covered loss to a car that you rent from a commercial rental car agency. Specifically, this coverage enhances your current rental car coverage by waiving your applicable deductible as well as agreeing to pay the rental car agency for their full “loss of use” and any reduction or diminution of value in the rental car.
What Coverage Should You Include with Your Rental Vehicle?
When you work with a rental car company, it’s important to know that they do not sell insurance. Instead, they offer to waive costs incurred after a theft, collision, or other damage to the vehicle they make available for rent. Typically, the basic coverage options include collision, liability, medical, and personal effects. If you do not currently have a vehicle (and therefore don’t hold personal auto insurance) you must proceed with the greatest caution before declining the protection offered by the rental car provider.
Typical Options Offered by Rental Companies
- Collision Damage or Loss Damage Waiver
- Liability Coverage
- Medical Coverage
- Personal Effects Coverage
Unless care has been taken to purchase named nonowned automobile coverage, those renting a vehicle should always purchase liability protection from the rental car provider, at a minimum. If you have personal auto insurance on your own vehicle, these typically do not cover any “before-and-after” costs. These are the costs that arise when the value of a rental car becomes diminished after an accident. Your personal auto policy likely does not cover the “extra fees” mentioned when renting – the administrative expenses (or soft costs) from the rental car provider in the event of a loss like storage, claims adjustment expenses, and towing.
What to Do Before Renting a Vehicle
Before you are making a reservation and the rental transaction is complete, there are some important questions to consider:
- What are my risks?
- What are the differences in the protection provided by each option?
- Is any protection being duplicated?
- Which coverage is primary?
As you embark on your vehicle rental adventure, we recommend you take your Vehicle ID Cards with you when you get into the rental. Make sure you list all drivers on the rental contract that may drive the vehicle. Remember to take photos of the vehicle prior to driving away with it. This would help you prove any existing damages that the rental car company may claim happened while you had the vehicle. At the conclusion of your rental period, take another set of photos in case there’s any question about the returning condition.
If you have any questions about your personal auto insurance policy, including what coverage is included, reach out to your Independent Insurance Agent for help.
