Do I really need car rental insurance?
Let’s say you’re flying into Miami and you rented a car for the whole week. It’s always hard to make the call on buying additional car insurance on your car rental, especially when you’re just driving to and from the grocery store, and perhaps down the main strip.
The question in mind to know is will your current auto insurance protect you in the event of an accident?
Two things to ask when renting a car:
- Does your personal coverage include liability and full coverage?
- If an accident happens, are you prepared to pay out of pocket for loss of use? What about loss of depreciation?
While your personal auto policy may cover property or personal damages, there are still holes in most insurance plans that rental car insurance can fill. Even if you have full coverage (which covers a collision that is your fault, or any other loss to your vehicle like theft, flood damage etc.), there would still be holes in coverage for a rental car.
Here are two types of incidents that your car insurance will not cover:
1. Loss of use
If you wreck the rental car and you are liable for the damages, you are also responsible for the time and money it takes to repair the rental car. Most insurance companies exclude this coverage, so be sure you either discuss this coverage with your agent or make sure it is included in the rental car insurance you purchase from the rental car company.
2. Loss of depreciation/value
If you wreck a $35,000 car and after repairs it is valued at $25,000, you are responsible for the loss of value, which in this case is $10,000. This can add up to a huge expense, so be sure to also check that this is covered in the rental car insurance purchased from the rental car company, or from your agent.
Peace of mind
Before hitting the road on your vacation, give yourself some peace of mind. Talk with your insurance agent to make sure there are no gaps in your auto insurance coverage. If there are areas that need coverage, discuss what policies you may want to add with you agent. Once your insurance is squared away, enjoy your vacation!
