Car Insurance on Rentals

When it comes to renting a car, all too often people will either pay full price for car insurance or go without. In actuality, many companies offer discounts on their policies when you rent an automobile. These discounts can save renters hundreds of dollars each year!

For example, many companies reimburse drivers 50% of the cost of insurance for rentals and leases in excess of five days. Anyone who rents a vehicle for this amount or more is eligible for this type of coverage from GEICO, iapple cars, Nationwide Insurance Company and AIG. A number of additional insurers offer similar coverage to rental customers under various marketing names with different terms and conditions.

It's a great idea to be aware of your options so you don't make some common mistakes that could cost you extra money.

Mistake #1: Not Having Full Coverage Insurance for Your Car

Many people fail to get the insurance they need in other areas of their lives, such as homeowners insurance. They don't account for how much you will be driving on a daily basis, and forget to take into account the possibility that something may go wrong with your vehicle while on the road. You are liable if someone is injured or damages your vehicle while it is in operation. Even if there are no accidents, a crash can lead to liability issues with an insurance company.

The U.S. Department of Transportation reports that 36 states and the District of Columbia have mandatory liability insurance laws. In these jurisdictions, you can be charged for negligence after a crash with another vehicle, no matter who was at fault in the accident. In addition, many experts say that it is wise to have collision coverage as well. This may help to cover the cost of your deductible if you are in an accident.

Insurers go by the same reasons for having full coverage on your car that you do for deciding if you need renters or other types of insurance. They ask questions about what kind of area you'll be driving in and if there are any special circumstances you have to consider, such as transporting passengers or having expensive items inside your vehicle.

Mistake #2: Failing to Check the Car's History

Before you rent a vehicle, check the car's history. This can be done by contacting the National Motor Vehicle Title Information System (NMVTIS), which is a database that contains title and/or registration information on vehicles reported as junked, salvage, or totally destroyed by insurance companies, car dealers, finance companies, automotive recyclers and law enforcement agencies in all 50 states. NMVTIS is available to federal agencies and participating states free of charge.

If the vehicle has been in a serious accident or had flood damage, you may not want to rent it.

Mistake #3: Not Checking Vehicle Rental Protection Policies

Car rental companies offer supplemental policies that can help cover the cost of lost or stolen vehicles or work-related damage. These can be a helpful way to avoid high deductibles and other out-of-pocket expenses. Here are a few things to look for when comparing supplemental insurance policies:

Scheduled and Unscheduled Loss – Rental companies can usually provide you with an exact amount of time that you will be renting the vehicle. This means if they know exactly how long you will have the car, they should be able to tell you what their losses will be in case anything happens to it within that time frame. Rental companies are also able to tell you when your vehicle will be returned. The time period covered by the policy is calculated from the time that the car is picked up until it is dropped off.

Rental Collision Coverage – This coverage will reimburse you for damage caused by a collision. For example, if someone hits your car while it's parked in a rental lot, and then damages your windshield or bumper, the coverage could provide assistance to repair or replace the damaged parts. In this case, Car Rental Protection Plans (CRPPs) can help reduce your losses.

Loss Due to Theft – This coverage will assist you if your vehicle is stolen while it is being rented or leased. Theft coverage may be helpful for renters particularly because car insurance policies only cover vehicles that are owned, not those that are being rented.

Comprehensive Coverage – Renters who choose this supplement can receive reimbursement for any damages to the car caused by natural occurrences or things such as vandalism. This type of cover will pay for losses associated with fire, vandalism, theft and more (if the loss is not covered through a comprehensive section in your auto policy). However, it will not cover theft, fire or damage caused by vandalism if your car is not in use.

Gap Coverage – This type of policy will help you if your auto insurance company doesn't reimburse you for the full amount of repairs or replacements. It can also cover situations where a claim is denied due to an exclusion in the owner's policy such as comprehensive car insurance.

Personal Accident Insurance – You may also want to consider additional coverage that covers theft, damage or injury to your own body and property. While this may be included as part of another package, some policies will only cover the vehicle being rented and not any belongings that may be inside it.

Car Rental Protection Plans (CRPP)

There are two types of CRPPs: comprehensive and collision. Comprehensive plans will provide coverage in the case of theft, fire, vandalism or damage done to the rental car by a third party. Collision protection is available for consumers who have their own vehicle insurance policy in place but choose not to decline the rental company's collision coverage. It is important that you review your auto insurance policy before you decide on this plan so you can determine whether your personal auto policy provides this type of coverage already. The deductible under the CRPP must be no higher than $1,000 and cannot be combined with any other deductible amount.

Mistake #4: Not Taking Advantage of Pre-Authorized Payments for Additional Insurance

If you are concerned about being able to pay your deductible if there is an accident in the car, then contact your auto insurance company to pre-authorize payments. This way, if something happens with the rental car, the insurance company will cover the cost of repairs without you having to pay a single dime out of pocket.

Before you take off on your trip and drive away in that rental car, review these tips for a smooth ride. If you follow them, chances are good that your trip will be everything it's supposed to be — and maybe a little bit more, too.

BethAnn Balser previously worked for Consumers Union of the U.S. as Senior Manager of Media Relations, as well as Communications Manager for National Car Rental and Automotive Group. She is currently a publicist and freelance journalist, working primarily on travel-related topics. You can email her at bethann@balserpr.com or follow her on Twitter @BethAnnBalser and @baltimoresuncar. If you have a consumer issue you would like to see BethAnn write about, contact her at bethann@balserpr.com

© BethAnn Balser 2014 – all rights reserved

Consumers Union of the U . S .

Conclusion:

Here is a simple checklist for renters/travelers to improve their chances of getting a refund if they have a bad experience with a rental car company:

Please note: you must purchase your rental car insurance from Avis, Budget, Enterprise, Hertz or National before renting the car. You cannot purchase your insurance after your rental. This may not work with international rentals - please check with your travel agent or airline before purchasing this additional insurance. Also if there is any doubt regarding how much you should buy, contact your auto insurer and ask what they recommend.