Car Rental Coverage Explained

This coverage is another one that can come in handy. If you have more cars than you have drivers in your household, you may not need it, but it is very inexpensive and works well for you if your car is in the shop due to a covered claim that your policy is going to pay for.

For example, let’s say you have an old beater. It RUNS, but only something you use when running to the landfill and back. Well, if you don’t have car rental coverage, and you have to drive that old beater, and your main car is getting fixed and it is taking a LONG time…well, you may just wish you had it. I have encountered this scenario many times. It is rare that I have come across a client who didn’t wish they had this coverage when they needed it. Here is a quick explanation of how it would kick in:

You have an accident. The accident is your fault. You need a rental. You rent the vehicle, and the insurance company either pays for it, or reimburses you. There are times when the accident is NOT your fault, but because fault has not been  determined, your rental coverage may kick in, but in the end, the other company ends up paying the entire bill. Either way, this coverage is a nice safety net to have if you need to get around.

The coverage varies from company to company, but most companies do not cover your rental 100%. They cover a portion of the total cost. For example, some companies will cover the cost as a portion up to a maximum, let’s say 80% up to $1000. (your rental car bill is $1100. Your company would pay $880, you would pay $220. NOTE: This coverage will NOT pay for you to rent a car while you are vacationing in Florida…it ONLY kicks in and is available in the situation of a covered claim. Now, if you DO decide to rent a car while on vacation, your policy coverages may automatically transfer over to the rental. Check with your agent on how this works in your state.

Photo credit/Flickr/JoelZimmer peretzpup

This entry was posted on Saturday, July 25th, 2009 at 7:17 am and is filed under article. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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