carrentalinsider.com

If you had an accident recently and are now looking on the Internet for “what to do”, click this link here. If you had an accident and have already returned the car and are wondering “what’s next?”, click here.

 

If you have completed CR104: Car Rental Insurance Basics, then this is part two.

 

Part two of Rental Car Insurance Basics is about determining your needs for Insurance.

The first question to ask is “do you own a car?” If you do, then it is possible that you may have some liability or even property damage replacement insurance already. Many personal auto insurance policies cover you while driving any car. Check with your company and determine if you will be covered while renting a car in a specific state. Not all insurance companies are licensed to operate everywhere, so do your homework.

Second, as part of these insurance many states require “liability” insurance by law. So if you own a car, you may have the ability to protect yourself, at least to the limit of your policy, from damages that you cause and are legally responsible for. Let’s take the state of Hawaii for example.

Hawaii requires, by law, 20/40/10 of coverage. This means that if you get into a car accident and hurt someone, your insurance will cover up to $20,000 per person injured to pay for medical expenses up to a max of $40,000 total for the accident and your insurance company will reimburse the injured party up to $10,000 for damages to their car or personal property. As you can see, this doesn’t cover much, but it does cover some. If you get into a major accident responsible for a lot of damage to the other party, once these bare minimums are exhausted, you will be sued for the balance. This will work for small accidents, but a major injury causing accident will likely not be sufficient. For those of you who do not have cars or are from outside the country, this will not work. However, there is hope.

Car Rental Agents when offering insurance often completely exaggerate the truth and tell you “you don’t have any coverage”, especially if you don’t own a car yourself. This is far from the truth in most states. Those same laws that require insurance for you to own a car also apply to the car rental agencies! This means, in Hawaii for example, each and every car you rent must, by law, have the same 20/40/10 coverage for each and every car they own. Click here for a link to a list of coverage required by all states (note-in some states, lawmakers have put in laws that speak directly to the car rental industry). Quite the revelation, I know. But there’s more my friend.

It’s not impossible, but extremely difficult to rent a car without a credit card (or debit card). Many of these credit cards (and even some of the debit cards) offer some sort of car rental and travel insurance as part of the “annual membership fee.” On top of that, some even offer extended car rental insurance. this extended insurance is on top of state law required and the card member basic insurance. It can be a godsend, but there are some restrictions. For the credit card to cover the rental, the car must be paid for by the card. Other rules may apply so contact your credit card company for all the rules and regulations for this type of coverage.

Another way to go is to buy travel insurance. This is kind of self-explanatory so I will not talk too much about this, however I do suggest that you make sure the particular travel insurance you select includes rental cars, as not all policies cover car rentals.

After going through this informational lesson, you can see that insurance is kind of a mish-mash of rules that vary widely by state. Be sure to do your homework or to make sure you are covered by another method.

 

*note this information is informational and the Internet sometimes doesn’t change as often as the laws. It is not meant to be legal advice and should not be accepted as such. When renting, double check with a qualified rental agent or insurance agent before relying on this information as a source of legal information.