Renting a vehicle – Should I purchase their insurance?

We frequently get calls from clients while they are at the rental shop asking if they have coverage for the vehicle they are renting.  There isn’t a simple answer to this question.  And actually we will have a few questions of our own.

1. What type of vehicle are you renting?
2. Is the vehicle being used for pleasure or business?
3. Will you be leaving the covered territory of your policy? 
4. Whose name will the vehicle be rented under?
5. Who will be the driver(s) of the vehicle?

There are some situations where your personal auto policy will not extend to a rental car.  The size of the vehicle and the use of the vehicle are considered in this determination.  A personal auto policy will not usually extend coverage to a vehicle over 10,000 pounds gvw, so a 15 passenger van or that u-haul truck would not be a covered vehicle.

A child is listed as a driver on a parent’s policy, but they do not usually have the same coverage afforded to the first named insured, so a vehicle rented in their name would not be covered by the parent’s personal auto policy.

There are advantages of purchasing the rental shop’s coverage.  Here are just a few.

1. If the vehicle is damage from a covered loss, you simply hand them the keys and walk away. There are some exclusions like racing & unauthorized drivers.
2. No need to report the loss to your personal auto company, as the rental shop’s coverage will be primary, so your policy won’t get dinged with a claim and rates won’t increase.
3. You will not have your credit card frozen until the claim is resolved.
4. The rental company won’t charge you for down time / loss of use, which is the money they could have earned renting the vehicle.
5. They will not charge you for diminished value from the vehicle being worth less after the accident.

Looking at these advantages, we strongly urge you to consider purchasing the rental companies’ insurance, but understand it is an option in most cases.  The cost of purchasing their coverage can make it seem unaffordable, but we are sure at the time of loss that you will be glad you did.