Summer is quickly approaching and the last few weeks of school are here! You're already making plans of where you're going to go. Beaches, mountains, relatives, national parks, the list goes on and on! For a lot of families, that means packing up the car and hitting the open road.
For some families, they decide not to put a ton of miles on a car and rent a vehicle instead. The last big family road trip I went on had 7 people and two dogs, and everyone owned 4 door sedans. My dad went out and rented a giant Ford Expedition to get all of us from Tennessee to Virginia. At the time I was a new insurance agent and knew enough to be dangerous, so when my dad asked me if his insurance would cover the rental car, I proudly said, "It sure will!" Oh no, young insurance agent, you just got yourself in trouble.
Young me was right according to what my dad was asking. The comprehensive and collision coverage would extend from an owned auto to an unowned auto that was in his care. Even though dad's daily driver was a little Nissan Altima, he could rent a big Ford Expedition and the insurance will cover the rented vehicle for no extra cost.
Here's the thing I didn't answer though, Rental Car companies have additional costs that may not be covered by your insurance. Some carriers will flat not cover them, and some require additional endorsements to cover the losses, but very few will cover them without some kind of endorsement.
A lot of rental companies require you to pay the deductible nearly immediately. They don't wait until the work is completed or even for an adjuster to get a hold of them. They want that deductible in hand when the car is damaged. Depending on who you are, you may not have $250, $500, or $1000 in hand to give to the rental company. What would happen, in this instance, is you would discuss with the adjuster that you already paid the deductible and they would deduct that from the payout right from the beginning. For nearly all companies, there is no way to "buy back" paying the deductible from them.
The other big missing coverage is called "Loss of Use". Loss of Use is difficult to explain quickly, so if you need to read this section twice, or even leave a comment, we're ok with that.
Loss of Use means that the time that the rental car company is fixing the car is time that it isn't being rented, losing them money. So, you rented a car, it got into an accident, the car is in the shop for two weeks and while they were getting it fixed, they lost business because they couldn't rent that vehicle to someone. This comes with a caveat, though. The rental car company has be able to prove they lost money. If there were cars sitting on the lot unused, they can't claim loss of use, because those cars would be been available.
So, the BIG question you're asking is, "Should I buy the insurance from a rental car company?" And the answer, is...maybe.
Insurance is all about risk. You decide what the risk is of getting into an accident in the rental car and the risk of no other vehicles being available while it is being fixed. Do you have the money to cover if an accident happens? Do you have the money to pay a deductible up front? Only you can answer that and only you know the answer.
Younger insurance me would say, "GO FOR IT!" But he didn't always understand risk, so older (possibly wiser?) me says take an extra minute to look at your situation. Don't let a car rental person pressure you into anything without fully understanding what you're buying or declining.
Stay safe out there!