If you like traveling to different places and renting cars, then this information is for you. Have you thought about taking a car hire excess insurance policy? Most car renters are usually under the assumption that if they rent a car, they are under the protection of the insurance policy of the rental agency. This is not always the case.
1. Auto insurance does not provide loss of use coverage
In some cases, people with auto insurance may assume that it will also cover the cars they rent fully. Most auto insurance policies, however, cover cars within limits of comprehensive coverage and collision.
However, in most states, auto insurance does not cover loss of use. After an accident, the vehicle will spend a lot of time in the shop for repairs, instead of earning money for the rental company. This puts you at risk if the rental company decides to sue for loss of use.
The auto insurance will not help you pay the rental company the amount of money they have lost since the car went into the repair shop. Only rental cars’ insurance provides the loss of use coverage.
2. Rental car insurance will protect you against rate hikes
The main disadvantage of relying on personal auto insurance to cover damages of a rental is that the insurance company will increase the rates.
This means that you will start paying a hire insurance premium, which may take its toll on your finances.
However, if you purchase rental cars’ insurance from the company, the auto insurance premiums that you pay will not be increased.
3. Credit card insurance may not provide full coverage
If you love to travel frequently, chances are high that you have a credit card that provides coverage for a car rental. You may have made the assumption that the credit card will cover you completely if any mishap with the car occurs.
Unfortunately, most credit cards’ coverage is not as comprehensive as you think.
Credit card insurances have very specific limitations such as:
- Some types of vehicles (e.g. pickup trucks, expensive cars, and SUVs) are not covered in the insurance
- Administrative fees charged by the rental company are not covered
- Diminished value (when the car decreases in value after an accident) is not covered
4. Personal auto insurance may not cover business travelers
Does your job require you to travel a lot for business conferences? Do you like to travel around the place, enjoy the sun, or tour the city during your business trip?
In such instances, you probably rent a car whenever you travel. Are you aware that even though the company will cover the rental insurance during the business portion of the trip, if you get into an accident during the leisure portion, you are on your own?
If you have your own rental car insurance, you would have nothing to worry about.
5. Personal auto insurance does not cover international coverage
It is during the holidays and you would like to take your family on a vacation overseas. You have already planned how everything will flow perfectly, how you will rent a car once you get there, and how you will drive your family around to enjoy the beautiful scenery.
However, do you know that the personal auto insurance you are planning to rely on does not provide international coverage? You may start thinking that your credit card insurance will cover you if the auto insurance will not.
But, are you aware that credit cards exclude certain countries from their rental coverage? If you truly want your family vacation to turn our greatly, consider car rental insurance.