Homer Smith Insurance Blog

It happens to all of us sooner or later.  We are standing in front of a brand new car at the car rental place.  The person helping us has the keys in one hand, a clipboard in the other and we have just surveyed the car to confirm there is no damage.  “Do you want to take the insurance….? It’s only $14.95 a day.”   Such a simple question; if you don’t know your answer though, you re not alone.  The National Association of Insurance Commissioners (NAIC) surveyed 632 consumers in 2007 and 42% were "either thoroughly confused or had only a rough idea about insurance."

If you are among the 42%, don’t be concerned, there is actually no pat answer for this question.  A lot will come down to your personal tolerance for risk and a good understanding of your personal insurance.

First, your personal automobile insurance attaches to you, not your car and most have rental car coverage built in.  If you are involved in an accident in a rental car, your policy will pick up the claim according to your personal coverage; any gap in coverage in your own auto policy will also apply to your car rental. .  If you drive a 15 year old car and decided to drop your collision insurance because it wasn’t worth repairing, maybe you should take the auto rental policy on the Cadillac Escalade you plan on driving.  If you have all the coverage you need, the risk of loss is about the same as driving your own car.

You should also bear in mind that your personal insurance may not include business use of your vehicle.  If you are on a business trip and refuse the rental companies coverage, you could find yourself responsible in the event of an accident.  You should check with your company to make sure you know whether they want you to take the rental company insurance even if it means an increased rate. 

Supplementary insurance is available through many different plans. Most credit cards offer a program – some through an enrolment process and in some cases as a benefit of the card itself.  If you elect to join a program through your credit card company, read the policy benefits carefully.  You can easily find yourself having to pay up front with the rental car company, then applying to your credit card policy for reimbursement.  The insurance offered “automatically” through your credit card s a card benefit needs to be reviewed carefully and often.  Most is supplemental, rather than primary coverage and may only cover physical damage to the rental car itself, not personal injury, liability, or theft of personal belongings. Card companies use perks like rental car insurance as marketing tools. They do not represent a contract for the duration of your credit card and if the company wants to change the provisions they can do so by notifying you of the change – and yes, that would be in that notice they urge you to read and you generally throw away. 

A call to your Washington auto insurance agent can help you sort out some important things – like whether your current policy will cover rentals and whether there are gaps in your coverage that may be important to fill either by the temporary insurance offered by the rental car company or by reconsidering your own insurance needs. Homer Smith Insurance can help you with these questions and offer advice to help manage your personal risk.  Give us a call before you travel!