Would you like insurance with that?

We’ve all experienced it, you’re standing at a car rental desk after a long flight and the representative asks if you want to purchase the rental company’s insurance coverage. You stare back at the attendant trying to remember what you should do: Should I get the liability? The physical damage? Do I need both?

Obviously, you don’t want to leave yourself uncovered, especially when you are driving an unfamiliar car in a new location. On the other hand, the rental insurance cost can easily double the cost of your rental vehicle. What should you do?

Do you have a personal auto policy?

The first important factor to consider is if you have a personal auto policy that includes you as a named driver. If you don’t have any auto insurance coverage in force, the coverage offered by the rental company may be your only option. But, if you do have a personal auto policy, you do have some coverage in place:

Your personal auto policy should cover you as a named driver for any auto liability resulting from you operating a rental vehicle in the coverage territory (the US and Canada.) Usually this coverage is included for vehicles that you rent for less than 60 days. Just like if you were driving your own car and were to be found at-fault in an accident causing bodily injury or property damage, your personal auto policy will cover you in your rental vehicle up to the specified limits of your policy. In Rhode Island, your personal auto liability will also cover any damage to the rental vehicle, so the Loss Damage or Collision waiver offered by the rental company can be declined. However, be sure to check your policy limits! You don’t want to assume that your personal auto policy is covering you only to find out that you only have $25,000 in coverage for the $50,000 SUV you just rented.

Do you have a commercial auto policy?

If you are using the vehicle on a business trip, you should consider the liability that your business could face because of an accident. Commercial auto policies are written differently than personal auto policies and you need to be careful not to assume that coverage is automatically included. Look at your declarations page and see if you have “Auto Symbol 1” next to your auto liability coverage. Symbol 1 means you have coverage for “Any Auto” which would include liability coverage for your rental vehicle. If you don’t have Symbol 1, “Auto Symbol 8” stands for hired vehicles and can also extend liability coverage to your rental vehicle. Finally, “Hired & Non-owned” coverage can be added to your General Liability policy if you don’t have a commercial auto policy in place.

Physical damage coverage for your rented business vehicle can be included by adding Symbol 8 to your existing business comprehensive and collision coverage scheduled on your policy. This coverage can also be included as “Hired Physical Damage” coverage that is provided by endorsement. If you are renting a vehicle for an extended period, or if you are renting a large or specialty commercial vehicle (like a large truck) make sure you talk to your agent to make sure there are no exclusions that you should be aware of.

Something else to consider:

Whether you are renting a vehicle for business or pleasure purposes, it is important to consider the consequences for filing a claim on your personal or commercial auto policy. No matter what car you are driving, if you are found at-fault in a major accident chances are that incident is going to show-up on your driving record. But, if you have a small fender bender with your rental vehicle (like backing into a tree) do you really want to have your personal or commercial auto policy respond to that small claim?

Even small claims can influence your insurance rates and if you are driving a strange car in an unfamiliar place you chance of having a small accident are likely to increase. Because of this you may want to explore other options for insuring any physical damage to your rental vehicle. Credit Cards sometimes offer some coverage for damage to rental vehicles, and some other club memberships may also provide this benefit. If not, you may just want to purchase the Loss Damage Waiver to save yourself any hassles.

If you have any questions about what is coverage and what is not covered by your auto policy, call Shove Insurance today and we will be happy to explain all your coverage options.