February 2019 Newsletter – Should You Get Rental Car Insurance?

Feb 20, 2019 6:19:48 PM

If you are planning a late winter or spring vacation, chances are you'll want the flexibility of access to a rental car. Many airlines and travel sites offer special travel deals that include discounted rates on rental cars that make it a very attractive option.

However, we get lots of questions from our customers concerning whether their own car insurance also covers them in a rental car. Here's some things you should keep in mind when the counter representative offers you the "optional insurance" at the rental desk.

Your insurance won't cover all risks

Your personal auto insurance policy will NOT protect you from all exposures.  The rental car "fine print" can vary from franchise to franchise even within the same name brand rental car organization. There are two big "gotchas".

You may be responsible for "loss of use". While your Massachusetts collision, comprehensive and liability coverages will apply, there is no coverage for "loss of use", the rental company's potential income loss for the days the car is not available to be rented while being repaired. Even if you are not at fault in a rental car accident, the entire time of the rental car's repair will be billed to you by the rental company.

You may be responsible for "loss of value". The subjective difference in the resale value of a repaired vehicle is less than that of a car that has never had an accident.  Most rental companies auction or sell off their low mileage cars when the new models come out. If the rental company chooses to sell the damaged car at a salvage auction rather than repair the car, you can be billed for "loss of value". 

If your personal policy includes collision and comprehensive coverages, it provides coverage for the Actual Cash Value of the rental auto, but the rental company may hold you responsible for "Fair Market Value" or "Full Value", which may be different than Actual Cash Value.

BE AWARE: Some credit card companies provide some rental car protection, but NOT for "loss of value" or "loss of use".

Source: iii.org

Should you get the Loss Damage Waiver? 

Our answer is always, "yes".  Whether it's called a Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW), this coverage from the rental car company is worth the $15 to $30 per day to walk away clean from an accident. If the rental car counter clerk fails to ask you if you want the coverage, make sure to ask for it.

But that's not the end of it. The LDW and other protections will be denied you in these situations involving your rental vehicle: reckless driving, unauthorized drivers, OUI (operating under the influence), or for theft of an unlocked vehicle. Read, understand and obey the rental contract provisions, drive safely, and purchase the waiver no matter what they call it!

REMINDER: If you are planning a vacation (or take frequent business trips involving car rentals), please contact us to discuss your total coverage picture. It will give you peace of mind so you can enjoy that vacation!

Source: iii.org

We'd appreciate your vote!

It's time again to vote for your local favorites in the Franklin area in WickedLocal.com's annual Reader's Choice Award competition. Again this year, we'd appreciate your write in vote for best insurance agency. Simply go to wicked local.com to submit your favorites. To participate in the drawing to win the $1000 gift card, you must fill in at least 15 blanks on the ballot. Thanks for your support!

When it comes to insuring your family's home, vehicles, possessions and lifestyle, we take our responsibility to keep you properly protected very seriously.  The trust you placed in us when you chose the Keefe Insurance Agency means you count on us to keep you informed of things you can do to avoid potential claims.

We are always available during business hours to answer your questions or address your concerns. Stop by or call us at 508-528-3310 or toll-free at 888-528-3310. There is also additional information available 24/7 on our web site for your convenience.

Bob Keras & Peter Brunelli
Keefe Insurance Agency


It is understood that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or other expert advice is required, the services of a professional should be sought. Insurance information is general in nature; for specific coverage provisions, renewal and contractural provisions, consult your policy. 

Bonus! Did You Know?

Does my deductible apply if I have an accident in a rental car?

In most cases, whatever your auto insurance deductible you have on your own car would apply when you rent a car to use for recreation, BUT NOT for business.

Am I covered for things like administrative fees, towing or loss of use charges?

You need to check your policy carefully to see exactly what is covered. Generally speaking, these are NOT covered. But you may be able to purchase a rider or the Loss Damage Waiver coverage from the rental car company to cover these costs.

Am I covered for loss of possessions when I'm on vacation?

Your homeowners or renters insurance policy generally covers your belongings if they are damaged, lost or stolen out of your vehicle. However, your deductible will apply. If you have a high deductible you may not be able to file a claim.  If you have high value items, like jewelry, that you are taking on vacation, you need to contact your agent about a "floater" policy to cover these items. Your homeowners or renters policy has limits it will pay for these items. (You may need the floater anyways if you have high value electronics, antiques or jewelry at home!) The credit card company you use to rent the car may provide some coverage for personal property. However, it may only pay the deductible amount so you can file your claim with your insurer and be reimbursed for your loss.

Do all credit card companies provide the same coverage?

 No they don't.  Even within the same company there may be different coverages based on whether you have a high limit "platinum" or regular card. If you have multiple cards, you may want to check them all and compare what insurance coverage they provide for car renters.

How do I find out what the credit card companies offer?

 If you are depending on your credit cards for insurance, we have one suggestion: DON'T!

It is a good thing to find out what your credit card issuer does offer.  Contact them and ask for the information in writing. However, whatever benefits they offer, these will be secondary benefits. This means that they will only kick in after your personal insurance and Loss Damage Waiver are utilized.

Do the car rental companies offer other types of insurance as well as the Loss Damage Waiver?

Yes, they may. By law, car rental companies must provide the state minimum required amount of liability insurance coverage in case  someone is injured in an accident you cause. Often this doesn't provide enough protection for a judgment against you if you are brought to court. If you carry your own auto insurance and have opted for higher liability limits (which is recommended) you'll probably be adequately covered.

If you don't own a car, you may be able to buy additional liability coverage through the car rental company. Or your credit card company may also offer this option. Review your contract carefully and contact us with any questions.

What about personal accident insurance or personal effects coverages?

If you don't have a personal vehicle that you insure, you will want these coverages that may be offered by the car rental company.  Personal accident coverage is for medical expenses if you or your passengers are injured in a crash. Whether or not you consider this may depend on your health insurance. 

Personal effects coverage is needed to cover lost or stolen items IF you don't have a homeowners or renters policy.

Peter Brunelli

Written by Peter Brunelli

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