You’ve probably been at the rental-car counter, wondering “should I buy rental car insurance?” And thoughts race through your mind. “Is this a rip-off? Doesn’t my own auto insurance policy cover me? Does my credit card cover rental cars? Why didn’t I look into this before I left on my trip?”
At Paramount Insurance, we are here to help. And while every situation may be different, here are some general tips that will help you make an educated decision the next time you rent a car.
1. Know your personal auto policy.
Because auto insurance policies vary, it’s a good idea to give us a call before you rent a car. In most instances, if you have a North Carolina personal auto policy with comprehensive and collision coverage you will have coverage for a rental car— but the amount of coverage may be limited to the value of the car you own, not the one you’re renting.
You also need to be aware that most personal auto insurance policies exclude rental cars used for business. If you are traveling for work and have an accident, your personal auto policy will most likely deny any claims.
Another problem that may arise if you file a claim for a rental car on your auto policy, many rental companies will charge fees beyond repair costs. They may assess a loss-of-use fee for each day the car is being repaired, as well as charge you because the value of the car has decreased. Not all personal auto insurance policies cover these fees.
2. Check your credit card protection.
Many credit cards provide some coverage, but often payment is limited to reimbursement of your North Carolina personal auto policy deductible (after that policy pays for repairs). Generally, credit cards rarely cover loss-of-use and other fees., Check with your credit-card provider to find out what, if any coverage they provide. Remember, you must use that credit card to pay for your entire car rental.
3. Learn about the insurance offered by the rental car company.
According to the Insurance Information Institute, rental car companies offer four main types of insurance coverage.
- A Loss Damage Waiver (LDW) relieves you of responsibility if your rental car is damaged or stolen. This may also provide coverage for loss of use.
- Liability Protection provides protection from personal injury or property damage lawsuits if you are sued after an accident.
- Personal Accident Insurance covers medical bills from an accident for you and passengers . You may need this coverage if your personal auto policy contains medical payments coverage of if you have good health insurance.
- Personal Effects Coverage covers items stolen from your rental car. You may have coverage for this form your North Carolina homeowners or renters policy minus your deductible. You may want to purchase this coverage if you have a high deductible.
If you find yourself at the rental car counter and haven’t done your research, we recommend buying their insurance.