Renting a vehicle – should I buy extra insurance?

Are you covered by your auto policy if you rent an auto?  With vacation time upon us, I thought this is good topic to talk about.

The rental agreement is a legal contract imposing responsibilities to the signer of the contract.  Some of these are not covered by your auto policy. It’s helpful to know what your personal auto policy will cover and won’t so you can decide if you’re willing and able to take a personal risk or buy the insurance they offer.

Most auto policies willtransfer to a rental car like you were driving your insured auto.  If you only have liability, then only liability will transfer and in this case you will need to buy the insurance from the rental car company to cover the physical damage.  If you have comprehensive and collision (physical damage) on your policy, it will transfer to the rental car; you’ll be responsible for the deductible.

Three main gap areas…

Diminished value:  This is the reduced value to the rental car caused by the accident.

Loss of use:  The money lost while the vehicle was out-of-service being repaired.

Discretionary: The rental car company could decide to pull the vehicle from their inventory sighting it is unsafe.  The cost associated with their decision could be a combination of things including diminished value and loss of use could be claimed.

Understanding these gaps will help you decide whether or not to buy the insurance offered by the rental company.  It is obviously more expensive to do so, but, in the end – you won’t be disappointed if a claim happens because you’ll have all your basis covered in the way of insurance.

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