It's time for vacation and the last thing you want to do is call your agent to discuss your rental car insurance. You assume that it's covered and want to waive rental car insurance offered by the rental car company. While this is an okay thing to do, there are some serious coverage gaps and issues that can be involved. Whether or not to purchase the collision damage waiver is a question that would definitely go down in our list of Frequently Asked Questions. In fact, it'd probably be the most frequently asked question. So we finally decided to create an article post discussing this topic, in hopes to provide a comprehensive answer to this question, rather than a simple "yes, but..."
The basic answer is yes, the broadest coverage available on any one vehicle in your policy will generally carry over to any vehicle rented under 30 days at a time. However, if you only maintain liability coverage, then that is all that will be provided on the rental car.
There are some other serious coverage gaps to be aware of as well, including:
1. Your deductible would apply, while most Loss Damage Waiver and/or Collision Damage Waiver contracts do have a zero deductible (offered by the rental car company).
2. Some rental car places charge you a "Claim Processing Fee," this is their charge basically for the hassle and employee time involved in having to go through an outside insurance company to receive remuneration for the damages to their vehicle. This fee is can be hundreds of dollars. This fee is not covered by your auto insurance policy.
3. The rental car company will usually charge you for the "daily rental charges" while the vehicle is in the repair shop (your policy does NOT pay for these rental charges... it only pays for the bill to fix the vehicle itself minus deductible). For example, if the car is out of commission and not rented out for a period of 15 days, the rental agency can charge you for the cost of 15 days worth of renting that vehicle! That can add up to hundreds of dollars not covered by your auto policy.
4. Loss of the Vehicle's Value is also another area of concern. The rental agency can say "hey, since you wrecked my car, it'll re-sell for $2,000 less because an accident is now on the vehicle record and CarFax report"... they can charge for this "diminishment of value". Diminishment of rental car value is not covered by your auto policy.
While your Auto policy WILL pay for the damages to the vehicle itself (as it would your own vehicle), and it will cover your liability to someone else (as it would your own vehicle), it won't cover the above additional fees and costs involved with renting a vehicle. Vehicle damages and liability do total the vast majority of the expenses involved in an accident, however, the above gaps in coverage can provide significant headache and cost should you be in an accident while driving a rental car.
When deciding upon waiving or not waiving the Collision Damage coverage, please be mindful of the above gaps in coverage and make an informed decision.
While the collision damage waiver agreement can be costly, it's worth it to weigh those costs against the above possible charges that you'll incur should an unforeseen accident occur.
Call your local Absolute Integrity Insurance agent if you have further questions or would like to discuss your options in greater detail.