Should you accept the insurance of a rental car?

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The question a rental car? that always arises when you rent a vehicle is: Should you buy the exemption from liability for damages, which limits or eliminates your financial responsibility for the damage to the vehicle you rent? This protection is not cheap, it can cost between $ 63 and $ 210 per week, depending on where you rent the chosen vehicle and with which company you sign the contract.In the past, we recommended not acquiring this additional cost if your personal vehicle insurance included coverage for shock and/or comprehensive coverage, or if your credit card provided you with such credit. However, today the decision has been “complicated considerably due to the fact that many companies are charging their customers for the depreciated value and administrative charges when the rental car collides,” says Kip Diggs, spokesman for State Farm, the company most important car insurance company in the United States. Generally, State Farm does not cover these charges. Here are the three steps to make this decision easier.

Rental car: Check your auto policy

The insurance that covers your car is the first line of protection to cover a rented vehicle. Which of course gives you a basic liability coverage for damages that you could cause to other people with the rented car and other vehicles and properties. If you do not own a vehicle and, therefore, do not have vehicle insurance either, you can and should buy a temporary or annual “non-owner vehicle insurance policy” from an insurance company. Such a policy should have a reasonable price. Read more: KNOW THE FIVE BASICS FOR MAINTAINING YOUR CAR

In order to protect a rented vehicle, your personal insurance must also have shock coverage (covering damage to your own vehicle due to an accident with another vehicle or object or rollover) and / or comprehensive coverage (covering damage to your vehicle caused by causes other than a collision, such as fire, theft, vandalism, flood, fallen branches of trees, etc.). If you have any of these coverages, check the text well in small print to know exactly what the coverage covers, or better yet, call any of the representatives of the customer service of your insurance company and ask if your policy :

Does it extend the coverage for rented vehicles? Generally, your coverage, deductibles, and other terms are the same for a rental car as for your own vehicle.

Does it include coverage for a business trip? Here there can be a hidden trap. Maybe your policy does not cover this. However, your employer’s insurance can cover it if you go on a business trip; therefore, you must find out if this is the case and if your employer wants you to accept or reject the liability exemption. Be sure to check the regulation and coverage if you plan to use some days of the business trip as personal vacations.

Do you pay the rental agency fees? Vehicle policies may or may not cover administrative charges, towing, loss of use of the vehicle while it is being repaired, and depreciated value.

Do you pay the “total value” for the rental of the car? If not, ask if you can add “complementary” insurance to your policy that replaces the total loss of the vehicle with a new one.

If you plan to refuse the waiver and your personal vehicle insurance provides you with a good basis of protection, you may still have shortcomings. To fill those gaps, use your credit card.

Analyze the benefits of your credit card

Vehicle rental protection benefits are granted by the various credit cards instead of the issuing bank of the card and may vary depending on the type of card. For example, American Express, MasterCard, and Visa assume the charges for loss of use, as long as the rental company backs them up with evidence of the loss. The Discover card explicitly excludes loss of use. Read more: Save fuel of your car about 10 things

The protection against loss of rental vehicles is not provided by any card, so before purchasing or reserving the rental car, contact the customer service of your card to make sure that the card you are going to use has such protection, and find out about the specific details of coverage of all your cards. Then, make your reservation with the card that gives you the best coverage.

The coverage of a credit card, in general, is a secondary insurance; therefore, your personal vehicle policy will assume the payment of damages or theft of the vehicle (if you suffer a collision and have an integral coverage) while the credit card company will collect all or most of what is left, subject to your own limits. Some losses are not covered by the cards, such as the depreciated value.

Some vehicles may not be covered, such as pickup trucks, some SUVs, and especially expensive or exotic cars; therefore plan well if you are going to ride in a rented vehicle Chevy Corvette, Dodge Viper, Cadillac Allante, BMW M3, Mercedes SLK, Porsche, Ferrari or Lamborghini.

This coverage applies only if you reject the exemption of liability for damages from the rental agency and, reservations and payments for the rental with a specific credit card. The cardholder must be the same person who rents the vehicle.

There are many details that you should examine, so ask the credit card customer service representative to explain and confirm over the phone and send you a hard copy of the insurance terms so that you have them in writing. You can also find the terms on the card’s website, but it’s better if you put yourself directly in touch with a representative.

If your personal insurance and your credit card give you solid protection, then you will be fully prepared and ready to consider rejecting the LDW (exemption from liability for damages). But there is still one more step.

Read the vehicle rental agreement

Unfortunately, you probably can not do it until you get to the rental company counter, where you can feel pressured to hurry up by the people behind you in line. (For example, we could not find rental contracts online). But stand firm despite the looks and complaints, and read the fine print of your rental agreement.

Look for sections that express your responsibility under state law, should an accident occur, and details about the rental agency’s waiver of liability. If the state law limits your exposure to liability and your vehicle policy and credit card are sufficient to cover your liability, you can safely skip the LDW, which is really, in a strict sense, an exemption from your responsibility instead of a true vehicle insurance.

For example, a Hertz rental agreement we saw in California limited the tenant’s liability to the actual market value of the vehicle, plus the towing and storage charges, as well as the administrative and garnishment charges. For the loss or damage of the vehicle against vandalism unrelated to theft, the liability limit was $ 500, and the tenants were not responsible for the loss or damage related to the theft unless it had been as a result of carelessness outside. of the normal.

In contrast, a rental budget agreement in Texas stipulated that the customer was responsible for “all” loss or damage, which included loss of use, subject to all limits imposed by law.

You must pay for the liability exemption if you rent a car abroad or in Mexico (where you could call a collision damage waiver), because your personal vehicle insurance is generally valid only in the US, in your territories and in Canada.

But you are still not totally out of danger, since even the exemption from liability may not be valid in certain circumstances. These are listed in your rental agreement and include letting someone other than an authorized user drive the vehicle, damage caused by driving on unpaved roads and, of course, driving while intoxicated or in clandestine careers.