• Do You Need Rental Car Insurance?

Photo of a man loading a suitcase into the back of a rental car

You’ve been waiting for this vacation for a long time. But before you can truly get the party started, you must make it through the travel day. You’re crossing your fingers that all flights will be on time, that all luggage will be accounted for, and that the rental car process won’t steal hours from your first day.

Morse, of course, doesn’t want anything to delay your vacay. While we don’t have the power to help you avoid flight cancellations or lost luggage, we do have knowledge about rental car insurance that may help you move through the rental car company’s paperwork more quickly and easily. Following are answers to some of the most asked questions about rental car insurance, including how it works, how much it can cost, and when you might want to purchase or refuse it.

How does rental car insurance work?

If the car you are renting is damaged in a crash, regardless of who is at fault, you could be responsible for paying many of the related expenses, such as towing, storage, and repairs. You may also be charged by the rental car company for the income it’s losing every day its car is in the shop. In a worst-case scenario, if the rental car is deemed a total loss, you might have to pay out of pocket for the vehicle’s full value. You could also be found liable for injuring people in the crash and for damaging other people’s vehicles or property.

Rental car insurance coverage is designed to protect you from these and other financial consequences of getting in an accident. In addition, it can provide coverage for a rented vehicle that is stolen or damaged by vandals, fire, or an act of nature, like a fallen tree. Lastly, rental car insurance can provide coverage for personal items that are stolen from the car.

Similar to personal auto insurance, rental car insurance comes with options, so you can purchase specific types of coverage and decline others. One way to speed up the process at the rental car counter is to familiarize yourself with the four rental car coverage choices that will typically be presented to you:

  1. Loss-and-damage waiver (LDW) means the rental car company typically waives a driver’s responsibility to pay for costs related to a rental car being damaged or stolen. A collision damage waiver (CDW) is similar but does not protect against theft.
  2. Supplemental liability insurance is coverage for expenses a driver may be found liable for in an at-fault car accident, including repairs to other people’s vehicles and medical costs for anybody injured.
  3. Personal accident insurance covers medical costs for a driver and their passengers if they are hurt in a car accident.
  4. Personal effects coverage pays for any personal belongings that are stolen from a driver’s rental car, up to a set dollar limit.

The costs for rental car insurance vary based on the rental car company, the type of vehicle rented and the location where it’s rented from, and which coverages are selected. Opting into all four of these rental car coverage options will typically add at least $30 per day, and sometimes up to $60 per day, to a rental car bill.

Over the course of a vacation, rental car insurance coverage can cost several hundred dollars or more. We’re sure most vacationers can think of many other ways they’d like to use that money. Before you decide you’re going to decline all rental car insurance options and spend these bucks on the local cuisine, activities, and souvenirs, Morse, of course, will share a few reasons you might want to give this coverage some more thought.

When should you consider getting rental car insurance?

As a Massachusetts driver, your personal auto insurance policy typically carries over to your rental car if it’s rented in the U.S., Canada, or a U.S. territory. Since the standard Massachusetts auto policy includes bodily injury and property damage liability coverage, LDW might be an unnecessary expenditure.

In addition, Massachusetts drivers are required to carry personal injury protection. This coverage helps you pay for medical expenses for you and your passengers if you or they are injured in a car accident. For this reason, getting personal accident insurance from the rental car company may also duplicate coverage you already have through your personal car insurance policy.

Personal effects coverage is one more type of rental car insurance coverage you might be able to decline if you have a homeowners or renters policy, because these policies usually include coverage for personal items that are stolen from either a personal or rented vehicle.

Even if your personal car insurance carries over to your rented vehicle, there are still some reasons to consider the extra protection that rental car insurance provides, including:

  1. You don’t have collision or comprehensive car insurance. Massachusetts drivers who choose only the minimum insurance requirements for their personal vehicles do not have collision or comprehensive coverage on their policies. When you don’t have collision or comprehensive, you don’t have insurance to help you pay to repair accident-related damages to a rental car or coverage for damages caused by fire, weather conditions, vandalism, or hitting an animal. You also won’t have coverage for a stolen car.
  2. Your car insurance policy excludes the type of vehicle you’re renting. For example, some personal auto policies may not cover rentals of trucks, vans, or luxury vehicles.
  3. You want coverage for loss-of-use charges. If you damage a rental car and it’s in the repair shop, your rental car company may charge a daily fee for the income it is losing every day its vehicle is in the shop. Many personal auto insurance policies do not cover this fee.
  4. You want to avoid filing an insurance claim on your personal auto policy. Some drivers want to sidestep having to file a claim with their personal insurance carrier by any means possible because it often requires them to pay a deductible and may increase their car insurance rates in the future.

Finally, the most obvious time to strongly consider getting rental car insurance is when you’re renting a car outside of the U.S., its territories, or Canada, because your personal car insurance generally won’t extend to that vehicle. It’s smart to make sure you’re covered for the added risks of driving abroad, even if it means paying a little more to the rental car company.

Make the process of insuring a rental car much simpler by working with Morse, of course.

At Morse, we cannot be certain your personal car insurance policy will provide sufficient coverage for bodily injury or property damage liability, your personal belongings, injuries to yourself or your passengers, or any other risks of driving a rental car until we take a look at your specific policy.

We recommend giving us a call today to have a Morse professional review your current car insurance policy and verify which coverages may extend to the type of vehicle you plan on renting. If we find that your auto insurance protection will not be sufficient coverage in any area, we can help you determine if it makes more economic sense to adjust your policy to fill in the potential gaps or to purchase the temporary coverage offered by the rental car company. Believe it or not, you might save money by permanently enhancing your car insurance with higher limits and adding optional auto insurance coverages versus paying for short-term rental car insurance.

When you do get to your destination and you’re heading to the rental car counter, we recommend that you have a copy of your car insurance paperwork handy or, even better, have Morse’s phone number with you. If any questions arise about rental car insurance, you can refer to your documentation or call our team for assistance.

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