We are in the heat of the summer and everyone knows what that means. Vacation! We’ve been waiting since this time last year to finally take some (hopefully) uninterrupted time out of the office. We get asked on a regular basis about rental car insurance on vacation. To buy the “expensive” rental coverage through the company or not? As long as you are within the US, Canada and their possessions, your policy would extend the collision coverage and the liability coverage, subject to your deductibles.
There are two other areas of exposure that are never covered under your policy. The first would be “loss of use.” This is the cost that the rental car company can assess for not being able to rent their damaged car. The second would be “diminution in value.” Rental car companies buy program cars with the expectation of being able to sell them at a predetermined price once they come out of service. If the car has been in an accident, the value of the vehicle is lower and they will assess you the difference.
The liability and collision extension from the auto policy are subject to your deductibles and could have an effect on your rate if you are at fault. The other option you may want to look into is the possibility that your credit card may provide the collision damage waiver. Certain American Express, Visa and Mastercard cards will cover the collision damage waiver if that specific card is used to pay for the car.
Frees Insurance always recommend purchasing the coverage from the rental car company for a few reasons. First, any incident (whether your fault or not) would not effect your premium and rates on your auto insurance. Secondly, the rental company may put a large hold on funds on your credit card, rendering it unusable. Finally, the last thing you want to do on vacation is spend the time in a hotel room arguing with the rental car company and Travelers to settle an auto accident.
Spend the extra dollars to protect your expensive vacation and buy the coverage through the rental car company. I certainly would not want to lose a precious day of vacation in the hotel room trying to sort out an insurance claim. That sounds too much like work!