Rental Car Insurance – Should You Buy Rental Car Insurance?

Your flight landed an hour late. Now, you’ll be late for that important meeting. You can already imagine your customers sitting around a conference table waiting impatiently. You step to the front of the line at the car rental counter, with six other exasperated businessmen behind you who are late for their meetings, too. The rental agent plunks the contract down in front of you, and circles all the places on the contract that you’re supposed to sign or initial. Then she stares at you, as if to say, “Hurry up!” The print is small. The sentences are written in Legalese. You’d like to stop and read the fine print, but you can feel the people behind you getting more upset. You thought you were renting a car for $35.00 per day. With all the add-ons, the cost is now $70.00 per day.

Oh…the pressure…the panic! You cave in, signing and leaving your initials in all the right places. You take your contract and keys and head for your car, inwardly feeling like a failure and mad because you didn’t stand up for yourself.

If the preceding story is too familiar, there’s hope just ahead!

It doesn’t matter if you’re a regular car renter or just an occasional traveler who needs to rent a car, you’ll likely face these kinds of choices at the car rental counter. Some folks just decline everything. Some folks purchase all of the coverage offered.

But…are you wasting bunches of money on unneeded coverage or leaving yourself dangerously under insured? Before leaving on your trip, I recommend that you make two phone calls – one to your auto insurance company and another to the credit card company you’ll be using to pay for the rental car. You’ll need to find out if you have automatic coverage for your car rental from each company, and the various terms and conditions for that automatic coverage.

FIRST…CALL YOUR CAR INSURANCE COMPANY

In your personal or business auto insurance policy, there is coverage for damage to your auto. The Insuring Agreement in most policies says: ” We will pay for direct and accidental loss to ‘your covered auto’ or any ‘non-owned auto,’ including their equipment, minus any applicable deductible shown in the Declarations.”

Another phrase is VERY IMPORTANT!

“If there is a loss to a ‘non-owned auto’, we will provide the broadest coverage applicable to any ‘covered auto’ in the Declarations.” Here’s an example of how this would work for you:

You have two vehicles. One is a 2006 Toyota Camry with full coverage. It’s worth $24,000. The other is a 1980 Chevy S-10 pickup worth $1,500 that you only use for trips back and forth to the local home improvement store, and you only have liability coverage on the pickup. If you rented a car and it got damaged, your insurance company would provide the full coverage for the rental car, which is the broadest coverage in your policy.

If you normally drive an older car with only liability insurance on it, there will not be any property damage insurance extended to the rental car. In this instance, you should either use the credit card’s Collision Damage Waiver or buy the CDW from the car rental company.

Ask your insurance company representative how much coverage you have on your car. Ask if there is a limit of value on your Collision coverage. If there is a limit, and you drive a 7 year old Ford Taurus that’s worth $5,500…and you rent a new Cadillac Escalade that’s worth $55,000…will your personal auto insurance cover the damage to the higher valued vehicle? REALLY important to know this…you could owe the rental car company tens of thousands of dollars to repair or replace a high value rental vehicle if you’re not properly covered.

Find out the limits of liability. Make sure that your limits are higher than the minimum limits required by your state. Limits above $100,000 per person/$300,000 per accident for Bodily Injury, and $100,000 for Property Damage are very inexpensive. Make sure that you limits are no less than that amount…higher would be better.

Find out what collision and comprehensive deductibles you have on your car, because those deductibles will apply when you rent a car and use your own insurance for rental coverage.

Make sure that you have Uninsured Motorist and Underinsured Motorist coverage on your personal or business policy. If you are in an accident with an uninsured motorist, and the accident is his fault, recovery will be practically impossible. Likewise with a motorist who is underinsured. Best to have your own coverage protection.

Q: What if I don’t own a car, and don’t have car insurance?

A: If you do not own a car, you won’t have an automobile policy. You should buy the rental car coverage, both the CDW and liability coverage. Or, you should use your credit card’s CDW and buy the optional liability coverage from the rental car company. If you’re a frequent car renter, however, you can still buy a “non-owner” liability policy. This solution might save you money over the coverage available through the car rental company.

Q: What happens if my personal property inside the car gets damaged or stolen?

A: Most Collision Damage Waivers provide coverage for theft of the vehicle, but not any personal property stolen or damaged inside the vehicle. Check your homeowners or renter’s insurance policy because you may have coverage through them for your stolen or damaged personal property. A deductible will likely apply.

Here’s a super important tip! Some people think that, if they purchased the Collision Damage Waiver or used the CDW from their credit card, and the rental car got damaged, they don’t have to report it to their own insurance company. They are hoping that because the CDW covers the damage, it won’t affect their own insurance policy….and they won’t get a rate increase. WRONG!!! Don’t be misled into thinking that you can get away without reporting your accident to your own insurance company. In most accidents, more things get damaged than just the rental car. Even if your accident is just you running into a guardrail, whoever owns that guardrail is going to look to you to pay for the damages. Also, other people might have been injured. You could have a large liability exposure, and you might need your personal or business auto policy to cover your loss. Your insurance policy includes legal representation if someone files a lawsuit against you for damages.

If you’re going to use your own personal or business auto coverage, decline the Collision Damage Waiver on the car rental contract.

NEXT…CALL THE CREDIT CARD COMPANY

Ask your credit card company about the benefits they offer. Each company is different, and each level of credit is different. For example, a regular card might have different insurance benefits than a gold or platinum card. Ask the card company to send you your benefits IN WRITING. If you’re in a hurry, ask them to fax or email it to you.

Some cards may only cover collision and comprehensive, and leave you uninsured for liability. Some cards only offer coverage when you rent from a certain rental company. Some restrict the number of days of coverage. Some cards don’t automatically cover you and require you to sign up for a particular program. Still others limit the kinds of vehicles you can rent. (see below for some exclusions)

If you have more than one credit card, call each one and find out the card with the best benefits. Then, use that credit card to pay for your rental car, and use their benefits.

If you’re planning on using the credit card company’s coverage, you must decline the Collision Damage Waiver shown in the rental car contract. Otherwise, the credit card company’s coverage will become excess to the coverage in the rental car company’s Collision Damage Waiver. “Excess” means that any other available coverage would pay first, and the credit card coverage would pay any remaining portion of the loss.

Credit card Collision Damage Waivers cover:

o vehicle damage

o theft

o loss of use

o towing

See your credit card company’s written CDW for all the details.

Collision Damage Waivers exclude:

o Injury to anyone or damage to anything inside or outside the rental vehicle.

o Loss or theft of personal belongings.

o Liability

o Loss due to intentional acts, like DUI, drug use or other illegal activities.

o Off-road operations. If you rent an SUV and take it off-road, no coverage.

o Rental periods of more than 15 days within your country of residence, or more than 31 days in a foreign country.

o Vehicles that do not meet the definition of “covered vehicles,” such as:

– expensive, exotic and antique vehicles

– certain vans

– pickup trucks

– other trucks

– motorcycles and ATVs

See your credit card company’s written CDW for all the details.

CAR RENTAL INSURANCE

Most major rental car companies offer these four coverages.

o Collision Damage Waiver (CDW). This covers a rental vehicle damaged by an accident, vandalism, theft or loss of use. Costs range between $9 and $20 per day.

The most misunderstood part of car rental coverage is the Collision Damage Waiver, or sometimes called the “Auto Rental CDW.”

Remember…the car rental CDW provided by the car rental company is not insurance. Insurance is regulated by each state. Collision Damage coverage is a waiver. The car rental companies agree to not hold the renter responsible if the rental car is damaged or stolen, and they guarantee that they will pay for certain damages listed in their coverage agreement.

In many cases, the waiver also provides “loss of use” coverage, which pays the rental company if the damaged or stolen car cannot be rented. In most states, car insurance policies don’t cover loss of use. So, if you choose not to buy the Collision Damage Waiver, you might have a loss of use exposure if the rental car gets damaged. But if you’re using your credit card’s automatic coverage, it will pay for that loss of use.

Some car rental companies will require you to pay for repairs or replacement costs out of your own pocket up front, and then you have to get reimbursed by your own insurance company. Being forced to come up with thousands of dollars in immediate cash could ruin a vacation. You’re protected from these up-front costs by the CDW. Read your rental contract CAREFULLY!

o Personal Effects Coverage. This provides coverage for theft or damage to personal items inside the rental car. Costs range between $2 and $5 per day.

o Supplemental Liability Insurance. This provides liability coverage up to $1 million. Costs range between $7 and $9 per day.

o Personal Accident Insurance. This covers you and passengers in your vehicle for medical expenses. If you already have personal health policies or travel policies, it won’t be necessary to buy this optional coverage. It usually costs between $3 and $5 per day.

Corporate Travelers. If you’re a frequent traveler for business, do one other thing. Check with your company to find out if they have a corporate travel policy. If they do, find out what that policy covers, and then simply don’t buy duplicate coverage on the rental car contract.

Car rental outside your country of residence. Some insurers exclude coverage if you’re driving in a foreign country. Some will cover you, but only a limited time. Some credit card companies cover car rentals outside your country of residence. Check with your insurance company and credit card company for specific details, and GET IT IN WRITING!

Q: Can I allow others to drive my rental car?

A: If you’re using your personal or business auto coverage to cover your rental car, the chances are all “authorized drivers” are covered. An “authorized driver” is anyone listed on the policy. However, here’s a BIG GOTCHA! If your teenaged son drives your rental car and he allows his girlfriend to drive the car, you’re covered. If the girlfriend allows another person to drive, NO COVERAGE!

Some car rental companies have exclusions for young drivers. Some charge extra for young drivers. Find out this information BEFORE you arrive at the car rental counter.

Q: How do I file a claim if I’ve had an accident?

A: When you experience the damage or theft, immediately get a camera and take lots of photos of the damage, including any other autos or property that was damaged. Keep those photos! Notify the rental company IMMEDIATELY of the damage.

Report the damage to your own auto insurance company if you have personal or business coverage.

When you return the vehicle to the rental company immediately ask for:

o A copy of the accident report and any claim documents, which should show the amount you’re responsible to pay, as well as any amounts that have been paid toward the claim.

o A copy of the initial and final auto rental agreements.

o A copy of the repair estimate or the paid repair invoice.

o A police report, if one exists.

So the bottom line is this:

If you have personal auto insurance, commercial auto insurance or corporate travel coverage, it is usually not necessary to pay for the Collision Damage Waiver or extra coverages offered to you by the rental car contract. Your situation may vary.

Get everything in writing, and make an informed decision. Then enjoy your car rental experience!

Looking for the Car Insurance Estimate?

Car insurance estimate: How much do you need?

Every car buyer goes through a checklist before buying his or her brand new car. The most important aspect of the list is the auto insurance and the car insurance estimate. A car insurance acts as a protection for your car as a whole. Your insurance officer may offer you a varied range of auto insurances depending on the type of vehicle you own, the amount of coverage you need and the number of years you wish to have the protection for, in return of a yearly amount, known as the insurance premium.

When you incur a car accident, the cost of damages the car bears is covered by the car insurance you opt for, this, however, does not include any damage incurred above the overall auto insurance amount.The value of your auto insurance estimate is calculated by the IDV or the Insured Declared Value of your vehicle; the IDV is the maximum amount the insurance company is going to pay for the damages your car incurs. The amount of IDV roughly equals to the actual market price of the car you own or the showroom price of your car. The IDV thus is not a constant value and keeps changing periodically.Upon renewal of your car insurance after a year, the value of IDV will decrease because of the amount of depreciation charged on it after a year.

What are the damages covered by the car insurance?

The car insurance will not cover all the damages your car faces, during the life of the insurance. Coverages in the US are usually seen in a cluster of three numbers separated by a dash, for example, 20/50/30 or 100/500/100. The first two numbers are usually seen for medical coverage. For 100/500/100 the insurance company policy will pay $100,000 per person up to $500,000 combined for all people. The last number covers damages made to the property, that is any other vehicle or property you hit in an accident.

A comprehensive auto insurance plan will mainly cover the following types of damages:

  • Liability Coverage:

The coverage also commonly known as casualty insurance, mainly covers bodily injuries and property damages, that is damage to your car. The amount of insurance will, however, vary from one jurisdiction to the other. The insured is also allowed to increase the amount of the insurance coverage (before the loss), to cover any loss incurred during the accident.

If in an unfortunate circumstance, you hit a telephone pole with your car. In such a case, the liability coverage covers the expenses of the damage caused to the pole. It, however, does not cover any other expenses related to the damage being caused such as disruption of services claimed by the Telephone company.

A bodily coverage covers the insured from possible injury during the accident as well as covers him or her from any third party damage caused by accident. The coverage covers the court costs and damages the insured is being sued for.

  • Full Coverage

Full coverage covers both collision and comprehensive damages done to your vehicle. The collision coverage covers the vehicle involved in collisions, by paying out for the repair of the damage incurred or by paying out the cash value of the vehicle in case the vehicle is not repairable.

Comprehensive coverage covers the vehicle from damages not ordinarily considered as collision damages. The damages covered by this coverage are damage due to theft, vandalism or impact with animals. Additionally, a lot of insurance companies also include ‘Act of God’ damages that is any damage caused by event or events caused to factors that are beyond human control, such as cyclones, tornado, tsunami etc.

Apart from the main coverages mentioned above, insurance companies in the US also provide the following coverages:

  • Damages done by uninsured/underinsured motorist (UM/UIM)
  • Loss of use
  • GAP coverages.
  • Lease/Loan Payoff.
  • Emergency Road Service Coverage.
  • Mechanical Breakdown Coverage
  • Custom Parts and Equipment Coverage.

How can you calculate a car insurance estimate?

You can follow these simple steps, to correctly get your car insurance estimate:

  • Before buying a auto, narrow down on your choices.
  • Determine the amount of coverage you’d ideally be needing. If you are buying a new car, you should go for insurance that covers collision and comprehensive damages as well. This is however not mandatory in case of a used auto.
  • Compare insurance quotes for your vehicle. Different companies will have different insurance costs for your vehicle depending on the type and market price of the model. Comparing the quotes will help you narrow down to the best insurance for your auto.
  • Make the final choice, based on the comparison chart.

What should your ideal car insurance estimate be?

There are a lot of factors that affect your car insurance estimate. Ideally, you should choose a plan and amount, which covers most of the possible damage that your auto may incur in the lifetime. The amount of insurance you chose typically should be higher than the actual cost of your overall auto.

The ultimate car insurance estimate will ultimately depend on your own choices and individual situation. It is always advisable to look at a wide range of options and companies offering auto insurance after calculating the car insurance estimate. Comparing insurance quotes, and what they cover with each other will ensure you get the most out of your auto insurance.

Insurance Claim Supplements – How to Submit Claim Supplements

A claim supplement is a claim for additional repair or replacement costs. Supplements are commonplace in the claims process. However, if you are a policyholder unaware of your policy rights, you could be walking away from hundreds or thousands of dollars that you are entitled to collect.

Claim supplements usually occur after a policyholder submits a claim, gets paid and gets the repairs or replacements completed. Then, additional damage is discovered some time later.

Many people erroneously think that, once the claim is closed, it cannot be re-opened. And, insurance companies and their adjusters usually don’t rush to tell you how to submit a claim supplement. So, what to do? Let’s look at car insurance claims and property insurance claims.

For any kind of supplemental claim, you must contact your insurance company and give them your original claim number. The best way to notify the company is in writing, sent Certified Mail. That way, you’ll know who signed for the letter. The insurer will have to re-open the claim. You might get the same adjuster as before, but maybe not.

Car Insurance Supplemental Claims

Lots of supplements happen when cars are getting repaired. Many times, hidden damages are discovered when the body shop begins dismantling the car. So, while the insurance company may have issued payment to the body shop from the original repair estimate, they will issue a second check for the supplemental repairs. Happens all the time, no big deal.

However, sometimes post-repair problems don’t show up right away. A good example is the Air Conditioning system. If you have a car wreck in July, you might not notice that your heater is malfunctioning until fall or winter. But when any damages are discovered that can be directly related to the original insured loss, you can submit a supplement. Simply document the damages and their cause and send the supplement to the insurance company. No additional deductible is assessed, since you already paid it once.

Property Insurance Supplemental Claims

Homeowners, Renters or Business insurance claims can find a need for a supplemental claim for some of the same reasons found in car insurance claims. Seasonal issues can bring up damages related to the original loss. But, some other issues might present themselves. You may have an expert’s report that shows additional damage attributable to the original loss. Your contractor may have found hidden damage that must be repaired. In any event, carefully document your claim and submit it to the insurance company.

Be sure that you are collecting all the money you are entitled to collect. Use supplemental claims whenever your claim requires it.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.