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When I Rent a Car, Do I Need to Purchase the Rental Car Coverage?

Ross Turner

Ross Turner

One of the most common questions is whether to purchase rental car coverage when renting an automobile. My answer is “yes,” and here are a few reasons why.

A few years ago, I rented a car because my truck was in the repair shop. Being the “insurance expert” I thought I was (and not wanting to spend more money than I had to), I waived the rental car coverage. Instead, I gave them my personal insurance policy information, confident that I would have coverage if anything big happened. After all, the rental car coverage was going to cost $68 for the three days I would need it.

I rented a Tahoe because we were going to the lake the next day and would need the space. After a fantastic afternoon on the water, we were unloading the boat to the dock at the marina. Suddenly, I heard a loud “SPLASH” as I jumped between the boat and the dock. I knew immediately it was the keys to the Tahoe, which were now 30 feet underwater. After several hours of waiting on a tow truck to get us back to Greenville, I had to pay $600 out of pocket to purchase another set of keys to the vehicle. If I had purchased the insurance, it would have cost me nothing because it would have been covered.

Another time, one of our clients had to make an emergency trip to Colorado to pick up a son who had gotten sick at summer camp. She flew into Denver, rented a vehicle, and did a general inspection before leaving. Then she drove straight to the hospital and parked. The next day she drove straight back to the airport, putting approximately 100 miles round trip on the car.

Upon her return to the airport, the rental company inspected the vehicle and found that road debris had damaged the paint on the car. The cost to repair the paint was $750, including a charge for the loss of use of the vehicle while it was being repaired. The paint damage was covered under her personal auto policy, but because she had a $500 deductible, only $250 was covered. There is no coverage for loss of use in your personal policy, so she had to pay the additional charge for that out- of-pocket. Remember, you can’t control road debris.

Did you know that when you waive the rental car coverage and have an accident, the rental car company has the right in the signed rental agreement to charge your credit card the full amount of the vehicle until damages are known or paid? Now that can ruin a vacation! The agreement also holds you responsible for the diminished value, which is not covered by your own collision coverage.

In South Carolina, when you rent a car, the rental car company is only on the line for the state minimum limits on the liability side (25/50/25). When you drive into other states, the limits match the minimum coverage of the state you are in. Anything over and above those limits will come back to your personal or business policy, depending on the name on the contract.

When you purchase the rental car coverage, make sure you list everyone that is going to be a potential driver on the agreement, and know that they are not going to let you list your teenage son or daughter.

I have always suggested to other people that they should purchase the rental car coverage. I can assure you that next time, I will take my own advice.

For more information call 864-288-9513 or email us.