Do I need extra insurance when I rent a car?

Question: I’m renting a car, and they are trying to get me to purchase collision coverage.

Does my personal auto policy already cover this? Do I need to purchase it from the rental car company? It can get expensive!

By Erik Cronk, Agency Owner

The answer can be yes or no.

Does your collision coverage from your personal auto policy transfer over to a rental car? If your policy has collision coverage on one of the vehicles on your policy, then the answer is yes. If you have liability only coverage (no collision) on all the vehicles on your policy then the answer is no. This is the easy part.

Where it gets confusing is that rental car companies can also charge you for two items that your personal auto policy does not cover: 1) Diminution of Value and 2) Loss of Use. If you purchase the rental car company’s collision coverage (or sometimes called the Collision Damage Waiver (CWD) or Loss Damage Waiver (LDW) then usually these two items are covered along with the damage to the vehicle. But read the fine print or ask them to clarify that they are and never assume.

Diminution of Value usually rears its head “after the fact”. Yes, your collision coverage from your own personal auto policy will pay for the damage to the rental car. But what happens when the rental company goes to sell the vehicle, and they cannot get “full market value” for the vehicle because it was involved in a prior accident. The difference between that full market value and what they are now able to sell it for is diminution of value, and that amount is something rental car companies will try to recoup from you. It is not covered by your personal auto policy.

Also, what if that rental car is now out of service for one, two, three weeks? The rental company has now lost the ability to earn income from the vehicle while it is being repaired. This is called Loss of Use. They can also come back and collect this amount from you. This is also not covered by your personal auto policy.

So what do you do? Here’s a small checklist for anytime you plan on renting a car:

  1. Check with who you have your credit card(s) with and see if they provide diminution of coverage and/or loss of use, along with CWD or LDW coverage. Some do, some don’t. If they do, then your collision coverage from your personal auto policy in combination with using that credit card is usually enough. You may have to waive the rental car company’s coverage to invoke coverage under your credit card. Again, read the fine print.
  2. Read the fine print (notice the theme here?) or better yet ask the person at the counter to show you that part of the contract. I’ve rented from some companies that do not have the diminution of value or loss of rental coverage clauses in their contracts, taking that part right out of the equation and making your decision easier.
  3. Before you leave the rental company’s lot, use your smartphone to take pictures or video of the vehicle from all sides and don’t forget the top too! Get photos from an angle where you can see any dent in the vehicle. Try and get at least one “locating” picture that shows the sign for the rental car lot as well as your car, demonstrating that you took the photos in the lot. You can never have enough photos! This way if you go to turn in the vehicle and they say you damaged it, but you have the pictures to prove you didn’t, it can save you a whole lot of hassle not to mention money out of your pocket. If your vehicle has any damage to it when you take possession, immediately document it with photos and have a rental sales associate do the same on your paperwork, with BOTH of you initializing it. Never just allow a sales associate to tell you “no big deal” and drive off without documenting!
  4. If your rental car experiences some type of breakdown, if possible take pictures of the engine part giving you the problem. I once had a hose clamp start leaking where it left the radiator. When the rental company called back a week later after I was home, trying to charge me for thousands of dollars in repairs all it took was an email and a few pictures and they changed their tune in a matter of seconds.
  5. Make a copy of your insurance ID card and keep with your other important documents as you travel.
  6. One additional thing to consider: When you’re on vacation or away from home, what if you use the same credit card for meals, lodging and other purchases that you used to rent the car? What happens if you’re in an accident, and the rental car company invokes the “small print” and charges your credit card with the damage amount………leaving you with little to no credit limit left, when you still have lots of vacation or work travel ahead of you? If you have multiple cards that’s one way around it, but it’s still something to think about.

Purchasing the rental car company’s damage waiver is the one way you can ensure the least amount of hassles if you were to have an accident with the rental vehicle. It’s the only way our agency can guarantee you the least amount of problems or out of pocket costs if an accident were to occur. Everyone’s tolerance for risk is different, so in the end it turns into a judgment call. But being properly informed in advance means you can make the best decision for your particular situation.

Auto Insurance Quotes Comparison

With nearly every insurance provider offering online quotes with comparison tools, getting an online auto insurance quote comparison is almost too easy. Understanding everything your quote includes, however, is something else entirely. While it’s tempting to compare quotes based on price alone, there are many other facts to consider in order to ensure that you’re getting the best policy.

Before beginning your auto insurance quotes comparison, the first thing to do is consider which insurance companies you want to compare. Choose several providers and do a background check of sorts on each, considering information such as their business ratings, complaint ratios, and discounts offered. This will help you narrow down your selection before you even begin comparing pricing for equivalent coverage from each company. Be sure to check out our Testimonials page to see what our satisfied customers are saying about Cronk Insurance!

Next, you should determine how much coverage you need. Your basic coverage will include liability insurance, which covers damages and medical expenses to the other vehicle involved if you are responsible for an accident. Full coverage includes liability insurance, plus collision and comprehensive. Collision covers damages to your own car, while comprehensive covers damages that aren’t the result of a collision, such as an act of nature, theft, or vandalism. While collision and comprehensive insurance are not legally required, both are often mandatory if your vehicle is leased or financed. However, if you are insuring an older vehicle, you may want to ask yourself whether collision is necessary.

Personal injury protection insurance is required in some states but not all. Personal injury protection (PIP) insurance is used to cover medical expenses that may be incurred following an accident. Depending on what type of health insurance coverage you have, PIP insurance may not be necessary if it’s not required by law in your state.

Many companies offer big discounts when you buy coverage for several types of insurance, such as auto and home or a multi-car policy, from the same provider. While adding a teen driver to your policy is likely to increase your rate, many companies offer good student discounts for student drivers. Changes in life events, such as buying a home or getting married may also mean cheaper rates so be sure to include that information when comparing quotes.

Car insurance deductibles go a long way in determining what kind of rates you will see. Your deductible is what you will pay out of pocket first before your collision or comprehensive coverage kicks in. If you decide to go with a high deductible, your monthly rate will be significantly lower, but you could end up paying a thousand dollars or more before your insurance company covers any damages. On the other hand, a lower deductible will mean a higher monthly premium, but will take significantly less out of your savings should you ever need to have your car repaired.

Now that you’ve done your homework, you’re ready to begin your auto insurance quote comparison. Get a quote from Cronk Insurance and see how we compare – we’re ready to help you save money on a policy that will take care of your every need!

Getting the Right Price Quote for Car Insurance

Whether you are insuring your first car or are considering switching to a new insurance carrier, finding the right coverage at a rate you can afford can be an overwhelming task. Here at Cronk Insurance, Inc., Agency, we are dedicated to matching you with the policy that is the best fit for your needs.

As with any big purchase, you can guarantee that you’re getting the best deal by shopping around and comparing prices. When purchasing car insurance it is essential to compare rates from different insurance providers to help you decide which one is right for you.  Since we represent multiple insurance carriers, we are able to get quotes from several providers at once. Not only does this save you the trouble of getting the quotes yourself, but you can be confident that we will deliver only the best quotes to you.

So what can you do to be prepared when you talk to a Cronk insurance agent? For starters, it’s important to know what type of coverage you’re looking for. The minimum requirement includes liability, which covers injuries, damages, and legal fees as a result of a crash you may have caused. Adding personal liability coverage covers you and your passengers if someone else causes the accident. Unfortunately, neither of these covers damages to your own car, no matter who was at fault. We recommend that you consider adding collision and comprehensive coverage to your policy. Collision will cover repairs to your car after an accident, while comprehensive covers non-crash damages, such as vandalism, theft, or an act of nature.

You should also consider what kind of deductible is right for you. The amount of your premium will vary depending on what kind of deductible you choose. A higher deductible will result in a lower monthly premium, but will mean a greater out of pocket cost to you in the event of an accident. On the other hand, a lower deductible will mean a more expensive monthly premium. It all depends on what’s best for your budget!

Be sure to ask us about discounts too! There are always ways to save money on your car insurance with a wide range of discounts, including a clean driving record, safety features on your car, and bundling other types of insurance with the same company. These little discounts can go a long way to save you money!

While these are all important questions to ask your agent, there are many other options to consider when getting a price quote for car insurance. Cronk  Insurance, Inc., Agency will eliminate the guess work for you.

Contact us to get your personalized quotes today!
(814) 456-7501