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Do You Need The Extra Car Rental Insurance?

Do You Need The Extra Car Rental Insurance?
I’m going on vacation and will be renting a car; do I have to buy extra coverage?  

With the cold winter descending upon Essex County and families heading south for a vacation, this is a question I am asked a lot. 

It's actually a much more complicated question than most people realize. When someone rents a vehicle from a rental car agency they become responsible for any accident damage to that vehicle upon its return. Usually, you have two choices for covering any damage to the rental car, you can purchase coverage from the rental agency or you can have coverage provided by your auto insurance policy. There are pros and cons to both choices so I will try to give you an overview of your options. 

If you choose the insurance provided by the rental company it is usually more expensive than the cost of adding this coverage to your personal auto policy. In many cases damage insurance from the rental company can be as high as $25 to $30 dollars per day; this can be very expensive in the event of a 7 to 10 day rental period. Another issue to contend with is that the insurance from the rental agency may only cover specific, pre-approved drivers, if you were to lend the rental to someone not listed on the policy, and they have an accident, you may not be covered. On the other hand, while the rental company insurance may be expensive, if you have an accident it does not involve your personal policy. In other words, what happens on vacation stays on vacation. Also, many rental agencies offer $0 deductibles which would help minimize the tension in the event you were to have an accident while on vacation. 

The other choice is to insure the damage to the rental under your personal auto insurance policy. The cost of this extra coverage is generally quite inexpensive, as low as $25 to $50 per year; and many companies may even include it at no cost. While the cost is very low there are also quite a few exceptions to consider. First, you can only cover a vehicle driven in continental North America under this rider so if you are going to Europe or Mexico for example, there is no coverage under your policy. Also, the vehicle you rent must be a 'private passenger' type vehicle; so if you are renting a moving truck you cannot cover it under your personal policy. 

The last and most important point to remember is that if you insure the rental vehicle under your personal policy and you have to put in a claim for that rented vehicle then the claim is paid by your personal policy and any premium increases will follow you home. 

If you're one of the lucky ones leaving Essex County for warmer weather this winter and have auto insurance questions, please don't hesitate to give Gibb Insurance Brokers a call - 519-736-8228.