In This Issue

Rules of the Rental

June 8, 2009

Just about everyone has been there—standing at the car rental counter when the smiling face pops “the question.”

“Do you want to add insurance coverage to your rental?”

Well? Do you?

Unfortunately, there is no definitive answer to that question. Different car rental companies have varying rules and regulations—and different contracts—regarding insurance. The best action is to do some research up-front. Determine what a car rental company’s rules are and what the potential benefits might be for adding their additional insurance.

Your insurance
ERIE’s auto insurance does extend coverage to a rental vehicle, says David Freeman, vice president and manager of Personal Lines Underwriting for ERIE.

“ERIE’s coverage is designed to suitably protect you and your family for incidental use of a car that is not your own, such as a rental,” Freeman says.

Yet, before you hit the road, double-check with your ERIE agent to make sure what’s covered. The specifics of rental coverage can vary from policy to policy, so it makes sense to call your agent, who can explain the coverage in detail.

Know these answers
Freeman recommends knowing the answers to three questions before approaching the rental counter:
1. What coverage is required by the rental company?
2. What coverage do I already have?
3. Who is (or might be) driving the vehicle?

When to add coverage
“You can run into trouble when other individuals end up driving the car,” Freeman says. “The same people listed to drive your personal vehicle will be covered to drive the rental, but others who are not listed will not.” Coverage offered by the rental company might help in this scenario.

It can also help if the rental company charges for loss-of-use while the car is being repaired. Some companies charge for this, while others don’t. It’s not an expense typically covered by an ERIE auto policy, but might be through the additional insurance rental companies offer.

If you determine that it makes sense to purchase additional coverage, review both the rental contract and the rental company’s insurance policy before your trip. The language in the contracts can be wordy and confusing, and you will want to give everything a careful look before you sign.

“The optional coverage purchased from a rental company can be extremely restrictive,” Freeman says. “It might limit who can drive the car, where it can be driven and for what purposes. If you have an accident and are found to have been outside any of these restrictions, you can probably kiss your optional coverage goodbye.”

Credit Card Coverage?
Many credit card companies boast perks such as insurance coverage for rentals. This type of coverage generally applies only to physical damage of the rented vehicle, so you will still need separate liability coverage.

On the plus side, it can provide valuable coverage in addition to a personal auto policy and can often be used to cover your deductible if you do have an accident. Besides, the price is right—most credit card companies will extend their coverage free of charge, provided that you use their card to pay for the rental.

Check with your credit card company for details.

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