Have you ever thought what would happen if you got into an accident with a rental car? Are you sure your car insurance policy would cover the damage and loss of income to the rental car company? There is an answer. Let us take you through this topic and give you some peace of mind about rental cars.
Types of Damage
So does your insurance policy cover rental cars? The quick answer is it depends. There are different types of damage you can be held liable for if using a rental car:
1. Bodily injury;
2. Property damage to others; and
3. Loss of rental income the rental company loses on a damaged automobile.
What’s in Ohio?
Now, even if you have comprehensive and collision coverage on your own vehicle, your insurance company may or may not extend that coverage to a rental car. In Ohio, coverage depends on what the contract between the insurance company and customer says. It’s not a guarantee that the insurance policy will cover the rental car damages.
Your Auto Policy Isn’t Enough!
And, the problem is, most auto policies aren’t adequate to cover rental car physical damage. They can have an exclusion or dollar limitation on n on-owned or specific types of rental vehicles. In addition, many personal auto policies limit or do not cover the rental company’s loss of rental income on a damaged auto. Personal auto policies also do not cover diminished value claims a rental company would have against you.
And Credit Card Coverage?
And what about using your credit card coverage for rental car damage? Another bad choice. Why? Because the coverage contains language that limits, restricts, voids, or invalidates the auto rental damage waiver (DW) coverage provided by your credit card.
So where does this leave you? Having a personal auto policy AND buying a rental company’s loss damage waiver (LDW) is what we suggest you do. And as long as you follow the rental car agreement, you should be good to go.
Violations of a LDW
Now let’s quickly take a look at some of the things a rental car company sees as violations of the LDW:
1. Driving on an unpaved road or off-road;
2. Operation while impaired by alcohol or drugs;
3. Any illegal use, reckless driving, racing, or pushing or towing another vehicle;
4. Use outside a designated territorial limit; and
5. Operation by an unauthorized driver.
This is why pairing a personal auto policy with an LDW is the recommended action. The 2000 ISO Personal Automobile Policy does not exclude the first three rental agreement violations, and the territorial limit is usually broader.
Are Your Loved Ones Covered?
A note about unauthorized drivers: Be sure to check the rental car agreement to see what other persons are covered as authorized drivers. Don’t just assume a spouse, son, or daughter is automatically covered.
So when renting a car for a business trip or for leisure, price the rental to include the LDW and make your decision, in part, on that basis. The peace of mind alone is invaluable.
And the bottom line is: If you have questions about y our policy’s coverage, consult with your insurance company or an attorney before assuming you will be covered.