When renting a vehicle there are several things to consider before declining the optional rental car insurance. Yes, it’s expensive but in some cases, it can be very beneficial.
The first thing you should do is contact your agent to verify that your auto insurance policy will cover you if you are driving a rented vehicle. Most policies will extend your coverage to the rented vehicle, but some policies exclude vehicles rented for business use and sometimes exclude them altogether. Also, an MA auto insurance policy will only cover you in the US, Canada, and other US territories so if you’re in another country you definitely need to purchase the coverage from the rental car company.
If your auto insurance policy covers you while driving a rental, then your coverage will be extended to the rental vehicle giving you the exact coverage as your primary vehicle, including the same deductibles for comprehensive and collision coverage. With this in mind, you are covered for damage to the rented vehicle and for bodily injury caused by you while driving that vehicle up to the limits of coverage on your personal auto insurance policy.
However, there are gaps in the coverage provided by your personal auto policy that the optional rental car insurance would cover you for. For example, if you rented a vehicle and were at fault in an accident, your auto policy will cover the damage, but it will not cover the loss of use of that vehicle while it is in the shop being fixed. The rental company will charge you for every day that the vehicle is in the shop because they can’t rent that vehicle to someone else during that time, as well as administrative costs that you would be held responsible for.
In the event of a total loss of a rented vehicle your auto insurance policy is designed to only pay the rental car company the“Actual Cash Value” of the vehicle including depreciation for age and mileage. However, most rental car contracts state that you are responsible for the “Replacement Cost” of the vehicle. In many instances, people have declined the optional rental car insurance and had a total loss, and were responsible to pay thousands of dollars out of pocket.
Some auto insurance carriers offer additional coverage that you can add to your policy to cover the loss of use, administrative costs, and other fee’s that could be applicable in the event you’re at fault in an accident while driving a rental vehicle.
For more information about coverage for Rental Cars, click here.