Rented Car Coverage

What is and what isn’t covered regarding a rented car

It is summer time, the time for family vacations.  How will the personal auto policy cover a rented car?  Does the credit card company cover it?  What about buying the protection from the rental car agency? 

Insurance companies will vary on how they provide coverage to a rented car so check with the insurance agent regarding coverage extending to the rented car.  Typically, the liability insurance will transfer to the rented car.  Actually the liability will extend to a rented moving van or truck in most cases as well.  Be careful that the rented vehicle is rented personally, for personal use.  Personal auto policies are not written to cover business uses.

Ok, so the liability will extend, what about coverage for the rented car itself?  Again, check with the insurance agent regarding what coverage will extend to the rented car.  In most cases, the insurance carrier will extend the “comp” and “collision” coverages to the rented car if they are already providing it on the current auto policy on at least one of the owned vehicles.  At least one of the vehicles on the personal auto policy must have the “comp” and “collision” coverage listed.  There is another “catch”.  The rented vehicle must be a “PRIVATE PASSENGER AUTO” as defined by the carrier.  Pick up trucks, passenger vans are usually ok, anything bigger are not.  Watch out for the moving vans and trucks, flat bed trucks, box trucks are examples of vehicles that would NOT be covered. 

Be aware that the auto insurance policy may not cover all the expenses that could occur should the rented car get damaged.  Most rental car agencies will charge a “claim processing fee”.  This will not be covered by the personal auto policy.  If the rented car is going some time to get repaired the rental car agency will continue to charge rental fees because the car is “unable to be rented” and this extra charge will not be covered by the insurance.  There are other things that could be charged by the rental car agency that the personal auto policy won’t cover.

We suggest buying the “damage waiver” from the rental car agency.  This is NOT insurance.  It is just what is says, a damage waiver.  The car can be returned in 50 garbage bags and the renter could walk away without owing a dime.  Provided the conditions of the contract were met.  Be careful to understand the contract and all the conditions regarding who can drive the car, where it can be driven, and the condition of the driver while the car is being operated.    

Ask the insurance agent about what the insurance carrier will and will not cover, and find out how much the rental car agency charges for the “damage waiver”, then decide based on how long the car will be rented, and think about the “possibility” or “risk” of an accident or damage to the car.  It could be the rented car is being driven in Boston or Chicago or another big busy city, which would increase the risk.  Perhaps it is a replacement for a wrecked car and it is just for a couple of days at home.  There is no “wrong” or “right” decision, but a little planning and knowledge can save hundreds perhaps thousands later.