To Buy or Not to Buy Rental Car Coverage
You have been saving up all year for a vacation, and you want to rent a car when you arrive. But your budget is limited. You already have a Massachusetts Auto Policy (MAP) that has collision and substitute transportation coverage. Why do you need to buy anymore coverage?
It’s not an easy question to answer. People’s circumstances differ, depending on the ways the rental car agreement, the MAP, your credit card, auto policy endorsements and personal umbrella coverage piece together. All these factors could dovetail nicely or there could be significant coverage gaps.
Each contract is different. Your MAP will cover an accident or other loss under certain conditions and limitations:
- MAP coverage is good only in the U.S., Canada, Puerto Rico and U.S. territories and possessions.
- The rental car must be a temporary substitute for the car(s) listed on your policy.
- All drivers must be listed on the rental agreement with the consent of the rental company. If an unlisted driver has an accident, you will not be covered.
- MAP coverage will pay for a collision loss based on actual cash value, also known as book value. However, if the rental agreement requires replacement value (which is usually greater), you could have a coverage gap.
Your credit card company may cover physical damage to the vehicle you rent. That would apply only to damage not covered by another source, and there may be a cap to the amount they will pay. Also, there may be restrictions on the type of vehicles covered, the length of the rental and the country where you drive. Also it’s important to remember that your credit card spending limit may be put on hold during a claim.
With the Massachusetts auto insurance market now competitive and heating up, some companies, such as Safety Insurance, are adding enhancements to their policies – for a cost – to address some of the gaps in coverage that renting a vehicle presents. So some additional coverage could be found there.
There is no simple answer to the complex question of, “What coverage do I need when renting a car?” Only by reading all the contracts, the MAP and its endorsements, the rental car agreement, your credit card agreement and your personal umbrella will you find the answers. Each situation is unique. Otherwise, the only way to be certain that you can walk away from a damaged rental car without repercussions is to buy the collision damage waiver at the rental desk. If you are outside the U.S., Canada, U.S. territories and possessions and Puerto Rico, E&L recommends that you invest the insurance.
- Pat Long
|
