Understanding Car Rental Coverage

You’ve saved up money for a vacation, get off the plane and finally arrive at the rental car counter.  You thought everything was taken care of, but now the associate wants you to pay $15 per day (or more) for insurance.  You have car insurance in Ohio, but don’t know if you need to buy more from the rental car company.  The following will explain how your policy will or will not protect you if you are in this situation.

If you have “full coverage” on your personal auto policy, you’ll have automatic coverage that will pay to fix damages you’re responsible for on a car you’ve rented.  The deductibles on your car will be the same for the rental.  The liability limits that you carry on your policy will be the amount of coverage protecting you in the rental vehicle.  You must rent the vehicle in the same name that the policy is under, and it can’t be for business use.

Rental car companies also charge consumers for a vehicles “loss of use”.  This means if you’re responsible for the damage and it can’t be rented, they can charge you for the lost revenue.   I’ve also seen contracts that will attempt to charge you a fee simply for handling a damaged car, and also for its “diminished value”.   Once a vehicle has suffered damage, it is no longer worth as much money as it was before the damage, and they may try to recoup this.  Some insurance companies will pay for the “loss of use” portion of the claim, but you’ll probably be responsible for any additional fees and/or the diminished value the rental car company imposes.

By waiving the rental car company’s coverage, you’ll save money, but understand you might be obligated to pay certain expenses and fees if you’re responsible for damaging a rental car.