Is My Rental Car Covered?

These past few days in Fort Recovery have been anything but sunny and cheery. The weather has forced us to start daydreaming of vacations-- sitting on a beach, traveling Europe, being somewhere a little less... dreary?

As insurance agents, we start getting a lot of calls around this time of year to purchase travel insurance, but also to discuss rental vehicles. You may be wondering if you need to purchase rental car insurance for your upcoming trip. The answer is.... it depends!

If you have an auto insurance policy in your name and you are renting a vehicle, the broadest level of coverage you have on your policy extends to that rental car (assuming your rental is a normal private passenger vehicle, not a U-Haul, 16 passenger van, corvette, etc. If you're renting something unique, give your agent a call.) So, if your auto insurance has $500,000 CSL for liability, comprehensive and collision coverage, those same coverages will be extended to the rental car.

However, if your policy only has liability only for all of your vehicles, you will not have coverage to protect any physical damage to that rental car. In that case, we would advise you to purchase the coverage from the rental car company to ensure you don't end up paying for any unexpected damages to the rental car.

If you are traveling outside of the United States, we would also encourage you to get rental car coverage. Your policy is designed for the laws and regulations in the United States. You won't want to hassle with any logistical issues in a foreign country. Just trust us on this one.

There are two additional items that would not be covered in a rental car situation:

1. Diminishion of value- If you cause damage to the rental car, the rental company may claim that the car now has less of a resale value. They may want you to make up the difference in value. Your auto insurance will not pay for this diminishion in value and you may personally be expected to indemnify the rental company.

2. Loss of use- If the damage to the vehicle prohibits the rental car company from renting the vehicle for a period of time, you may be responsible for paying the rental company for their lost income.

Finally, be mindful of who you are letting drive the rental car. Your auto policy only covers the named insureds (the names on the top of the declaration page) or a "family member" (a family member is a person related to you by blood, marriage or adoption who is still a resident in your household.) Therefore, if you're taking a girls trip with a group of friends, or your adult children who no longer live with you, they will not be covered on the car that you rented! This is an easy way to create a big issue, so be mindful of who is going to drive. If you do choose to purchase the rental car coverage from the rental company, please be sure to list all drivers.

Above all, we want to ensure that you have a stress-free vacation. Please call your agent to discuss any questions prior to your trip. We love hearing about your destinations and can also give advice on tricky or unusual circumstances that may impact coverage.

Bon voyage!