Rental Cars and Your Auto Insurance

Auto Insurance: Uncovered

We spend a significant amount of time advising our clients about what insurance will do for them. We think it is equally important that we advise them of some of the basic areas where insurance will never respond. The past blog dealt with issues not covered by home insurance. Today, I want to spend some time on two issues that are not covered by car insurance. Both of these issues are related to renting a car while on vacation.

The auto policy has a “territory” limit to it. The policy states that there is coverage ONLY in the US, Canada, territories and possessions. So, there is NO coverage extension when you rent the car for the family vacation in Ireland or Mexico. If you are headed out of the country, be sure to call your insurance professional to discuss how to secure coverage abroad.

The second issue deals with damages that occur to a rental car while it is in your possession.  If the rental car you are using gets damaged, your policy will never apply to the rental agency’s loss of use. This is the daily rate they would receive when the car is being driven. If it is damaged and not rentable, you will be charged for the downtime. The other issue of no coverage involves a concept called diminution in value. Rental agencies sell their cars when they are done renting them. A car that has been in an accident is worth less than one that was not damaged. The rental agency will charge you for the diminished value.

Traveling within the US or abroad, always check with your insurance professional on whether coverage exists and, if not, how to obtain the proper protection. Don’t’ have an insurance professional who understands this? Call us at 610-933-4950.