Learn How Your Personal Auto Insurance Gives You Rental Car Coverage

March 4, 2016

Know how your personal auto coverage protects your rental car!

The coverages that you currently carry on your personal auto policy will apply to a temporary rental car, for both liability and the physical damage. However, the coverage only applies if you carry those coverages while in the U.S. and U.S. territories. In full disclosure, there are two circumstances that your auto policy does not cover.

1. The rental contract will probably state that you will be responsible for the diminished value of the vehicle if you have an accident. In other words, the car will be worth less after an accident. This is not something your insurance company provides on your personal policy, so it’s also not covered on your rental car. At Thomas Ward Insurance, we have never seen this become an issue.  While the rental company may ask for the diminished value of the car after an accident, the rental company will usually relent on asking for reimbursement once you tell them that your insurance company doesn’t provide this coverage.

2. Thomas Ward Insurance does not normally cover the lost rental income the rental company asks for either. This situation occurs if there is an accident and they cannot rent the car. They then want you to pay for the loss rental income. The insurance companies don’t pay this unless the rental car company can prove that all cars are rented from the lot. This being because the damaged car is the only car that is left on the lot to rent.
One benefit that may encourage you to purchase the insurance coverage offered by the rental car company is that an accident won’t appear on your driving record. Under their coverage, any accident that happens while renting their car leaves you record-free.

No matter what type of car you’re driving make sure that you have enough coverage. Have the professionals at Thomas Ward Insurance help you find the right insurance! Located in Chicago, Illinois, we serve all your personal and commercial insurance needs. Contact us for more information.