Rental Cars: Should you purchase rental agency coverage?

If you have collision and comprehensive (“other than collision”) coverages on your own car, you are most likely covered if you’re traveling in the United States, its territories and possessions or Canada (for example, travel in Mexico, the Bahamas or Europe would not be covered). Most policies (except business policies) cover any rental car that you drive at no additional premium. Business cars frequently require an extra premium to afford the same coverage.

Caution: Recently, many rental companies have included a “diminution of value” clause in their rental contracts. These clauses state that the renter is responsible for any diminution of value charges resulting from a loss incurred to their rental vehicle while it is rented to you In other words, if your rental vehicle is damaged to the point where the value is diminished, or at the sole discretion of the rental agency, the agency feels that the vehicle is not longer road worthy as part of their rental fleet, you may be charged the difference between the actual amount of damage incurred and the diminished value of the vehicle. Most personal auto policies DO NOT cover diminution of value nor do most credit card companies used to secure your rental agreement. What does this mean? You could possibly be charged hundreds if not thousands of dollars over the amount your insurance company may pay for damage to a rented vehicle in your care, regardless if you were at fault for those damages.

Please give us a call before you leave for your “fun in the sun and/or snow” to confirm your coverage and for further details regarding this matter.

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Robert Felty

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