Picture this. You were just involved in an accident. Your car is damaged enough to the point where it’s not drivable, so you’re going to need a rental car. When you go to the rental car place, the person behind the counter asks you if you want to buy rental car insurance. Confused? You may or may not need to get rental car coverage. We’ll explain…

At the end of the day, the choice is going to be yours and yours alone. Just remember that not all rental car companies offer the exact same coverage for their rented vehicles. It’s best to discuss your options with your insurance agent first.

Now, every time you’re involved in an auto accident, you will be responsible for paying your deductible. Your deductible is an agreed upon amount of money that you may out of your own pocket before your insurance coverage kicks in to cover the remaining costs to repair your vehicle. The purpose of your auto insurance coverage is to make you whole. In the case of an auto collision, your vehicle will be restored to its original state before the time of the accident.

When you speak to your insurance agent, consider the following questions:

  1. If I have a claim after I purchase coverage from the rental car company, will I have to pay a surcharge on my personal auto insurance policy?
  2. If I’m involved in an accident, will the coverage provided by the rental car company help me pay for a rental car while my vehicle is getting repaired?
  3. If I elect not to get the coverage from the rental car company and experience a total loss, am I in danger of having the rental car company max out my credit card in order to pay for its lost vehicle?

Getting coverage from your rental car company IS NOT mandatory. It’s important to understand that. Your own personal auto insurance policy can cover you when you’re driving your rental car. A typical auto insurance policy automatically covers liability (that’s the coverage that applies in cases when you’re the at-fault party). Collision and Comprehensive coverage, although not required, are certainly recommended to have on your auto policy. This kind of coverage will cover the costs to repair your vehicle. It’s important to note that in cases where you are leasing a vehicle, this kind of coverage is usually required. If you are in a situation where you are not making monthly payments for your car, this coverage is optional. Comprehensive coverage would handle everything that is not considered a collision i.e. fire and explosions, vandalism, damaged related to theft, storms, falling objects, windshield cracks or chips, and damage caused by an animal i.e. hitting a deer.

Before you agree to the terms of the rental car company, under the following:

Some rental car companies charge for loss-of-use: This charge would apply in cases when you are in possession of the rental car and it becomes damaged to the point where you can longer drive it. Typically speaking, loss-of-use is not covered under ERIE Insurance policies. Your rental car company may or may not offer additional insurance to cover this situation. Call us if you have your auto insurance through one of our other carriers.

Rental car companies oftentimes charge for diminished value and have other administrative fees: If the rental car is damaged while in your care, custody, and control, the rental car company may claim that the vehicle is less valuable now because it had to be repaired. You may be subject to additional fees from the rental company as well.

Think about who else may be driving the vehicle: If someone in your household will be driving the rental car, your own auto policy will cover them. If anyone other than your family members will be driving the vehicle, coverage from the rental company may be something to consider.

Read the rental car agreement very carefully: Potential loss of use, diminished value and administrative fees may be covered by the rental car company. However, it is extremely important to understand that the rental car company may limit who can actually drive the vehicle. If the vehicle is damaged or deemed a total loss when someone who does not fall under the extended family category is driving the vehicle, the rental car company may deny coverage.

We have one final note to consider: Before you drive off the rental car company’s lot, conduct a thorough examination of the exterior of the vehicle, checking for any dents or scrapes. Notify the company of anything you see right away, so they do not come after you when you return it, saying you are responsible for the damage.