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The Insurance Rules for Renting a Car

by Mark Shaw on March 21st, 2011

1) Are you using your Mass. auto insurance coverage?

or

2) Are you buying the coverage from the rental company?

1) The rental is a substitute for one of your vehicles. Make sure that you rent the car in the exact name as the owner of the vehicle that you are substituting, as this is NOT additional vehicle coverage. Do not expect any coverage on your existing vehicle in Mass. while you are using the rental (Mass. or out of state). The rental is covered in all states including Puerto Rico but NOT out of the U.S.. Whatever your vehicle coverage is on your auto in Mass. it is as if you took your Mass. plates off your car and put them on the rental.Typically a $500 deductible for collision and or comprehensive (fire and theft/vandalism/broken windshield) would apply to the rental’s damage. Mass. has a $0 deductible for glass coverage.

Things to remember:

-If you are at fault in that state that you are vacationing – when your policy pays the claim you will be surcharged for the next 4-6 years.

-If you are hit and run – you will eat the deductible ($500??)

-While that rental is in the auto body – the rental agency will attempt to sue you for the lost rental revenue while it is in the shop, since it cannot be rented to someone else if it is damaged. Your policy will answer this claim but may not pay if the rental agency can’t prove your damaged car was the last one they had.

– If you have a commercial auto policy – do you own or lease the vehicle. Do you have Non-owner Liability covg and/or Hired auto coverage that will roll over to the rental?

– You won’t need baggage loss/theft coverage as you are covered under your condo/apartment or homeowners policy coverage for up to 10% of your belongings away from your home at any one time. Unfortunately a separate deductible for the property stolen/lost will apply.

2) If you buy the coverage – the rental company policy pays the claim. Cost is usually about $15-20 per day. In this case you would never get the surcharge on your Mass. auto policy.

REMEMBER – Most credit cards may cover the cost of the damaged rental vehicle but usually never covers the injuries of who you hit or the other vehicle that you hit.

A QUICK UPDATE!!!!!

American Express has a new product which they will try to entice you with. It’s called “Premium Car Rental Protection” and costs $24.95 each time you rent a car. It covers the value of the car you are renting so you don’t need to use your Mass. insurance coverage. It also covers the loss of use issue mentioned above. B U T , it does not cover any liability issues, like the car you hit or the person who is injured and wants to sue you. This coverage also allows multiple authorized drivers to use the car. If interested just the flight life insurance, you need to sign up in advance and when you use that car it will automatically be in place for each rental. As long as you are aware of the liability for who you hit and damage you may do won’t be covered by this product –  it may be of some value to you as it does cover whatever car you rent and the drivers you authorize to use that rental ( for the value of that car).

 

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