A common question we get here at the office is whether or not your auto insurance policy extends to vehicle rentals. The short answer is YES. However, there are some very important exclusions you need to know about.
Your auto insurance policy is a personal policy which means that if you rent a car it needs to be for personal use, not business use. For example: if you rent a car while on a business trip, you are not covered under your personal auto insurance policy. In this case, you want to make sure you have coverages under your commercial policy.
Out of the ordinary vehicles such as over-size vans, moving trucks and vans, and antique cars are also excluded. When you rent any of these vehicles, pay close attention to the waivers and/or coverages that the rental company offers.
Make sure you are staying in the United States. Your auto insurance policy, typically, is executable only while you are in the United States. Coverage is not guaranteed outside of the country and that includes Canada and Mexico. Your only option in these cases may be the rental company’s “Waiver of Damages.” Basically, this “waives” their right to charge you for damages to the vehicle. This coverage is expensive but accepting this coverage and paying the extra money will give you peace of mind.
At this point you’re probably asking yourself how does my insurance policy work with rental cars and how can it protect me from potential pitfalls? Here’s how we got you covered:
Under normal use, you’re auto insurance policy is extended to your rental car.
Your “best insured vehicle” extends to your rental car. For example: You have two vehicles but one vehicle has only liability and other vehicle has comprehensive and collision coverage. The policy with comprehensive and collision coverage will extend to your rental car.
You are responsible for the deductible – Just like with your personal vehicle, you are responsible for paying the deductible and the insurance company will cover the expenses over the deductible.
You may be charged while the rental is out of commission – If you did cause damage to a rental car, the rental company may decide to charge you for every day the car is in the shop because in their mind that’s a day the car could have been rented and generating revenue. For example: If the rental car is in the shop for ten days and normally rents out for $30/day. That may be an additional $300 expense you are responsible for.
And lastly, check with your credit card company. You may be surprised with the coverage your credit card company offers when you use their card to rent a vehicle. Keep in mind, this is supplemental coverage; your auto insurance policy still provides primary protection.
Remember, review your auto insurance policy before declining any coverage offered at the rental counter. When in doubt, certainly give us a call. And most importantly, if you find yourself in Cuba cruising around in a 1958 Plymouth Belvedere, don’t follow too closely and always use your turn signals!