By Johnny Jet and Keir Jones
Let’s face it…talking about insurance is boring — the word alone makes me want to yawn. But it’s obviously important, and taking four minutes to read this post could save you big time.
I recently called my new cousin (by marriage), Keir, to see if he could lower my car insurance payments. Sure enough, he could — and he was able to help me a whole lot more. After receiving my then-car insurance details, Keir informed me that I wasn’t even covered for car rentals. Gulp! I was shocked, and after all the valuable information he gave me, I asked if he would be kind enough to write a quick post to help readers of JohnnyJet.com learn how, as I did, to be able to confidently turn down all of those pesky car rental salesman at the airport counters.
Unfortunately, Keir can’t help everyone with their insurance needs — only those in the great state of California — but all travelers will find his info below very helpful.
Keir, take it away…
When renting a car, you will be asked if you want to purchase insurance coverage. The rental agent will normally offer you different levels of insurance coverage, including a Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW), which (by either name) covers the rental vehicle in the event of accidental damage or theft. Many drivers become confused at this point, wondering if they need this insurance.
If you frequently rent cars you may want to consider adding Use of Non-Owned Cars (UNOC) coverage to your existing auto policy. Use of Non-Owned Cars coverage provides liability coverage to help to pay reasonable loss of use charges (see below) and administrative charges, and may be endorsed to provide additional physical damage coverage for non-owned cars if your policy does not include comprehensive and collision coverage.
A conversation with your insurance agent is recommended before you decide what to get with your rental, but here are some guidelines from the State Farm Learning Center to help you:
| Situation | What to look for | When to consider additional coverage |
| You have a personal auto policy | Read your policies carefully or call your insurance agent to ask for details of coverage. Many auto policies cover rentals with the same type and amount of coverage on your personal vehicle. Also ask about coverage for any administrative fees you may be responsible for, such as loss of use (rental income not earned on a car while it is in the repair shop). | If your policy does not cover rentals, has a high deductible, or does not include collision coverage or sufficient comprehensive coverage, you may wish to purchase additional coverage from the rental company. Also, insurance is invaluable in foreign countries where you may be responsible for paying for the damage in full before you leave the country. |
| Your credit card offers rental car insurance | Carefully read the documentation that came with your specific credit card and understand the extent of the coverage it provides. | Depending on the level of coverage your credit card provides, you might consider adding coverage from the renting agency. |
| You are traveling on business | Your employer may provide corporate insurance for rented vehicles. | Be sure to know the applicable corporate policies and procedures before you rent a car for business. |
| You do not own a car | If you do not own a car and therefore do not carry auto insurance, you will need to purchase insurance from the rental agency. | Take your time at the rental counter to consider the coverage packages being offered. You may not need the most expensive plan being offered. |
| You are renting a car in a foreign country | Check your auto insurance policy for possible exclusions or limitations on renting a car abroad. Also check for coverage that may be offered by your credit card company. | If you are not sufficiently covered, you may wish to purchase third-party travel insurance to cover your foreign rental, or the Loss Damage Waiver from the agency. You will still be liable for any costs resulting from vehicle damage that are not covered by the waiver. |
Editor’s Note: Most American Express, Discover, MasterCard and Visa credit cards will provide you with rental car insurance above and beyond what your primary insurer and rental company will offer. It’s always a good idea to rent a car using one of these cards. Just be sure to read the fine print or call your credit card company to see if you are covered.
About Keir Jones
Keir Jones is a State Farm Agent, #0H27745, based in the Los Angeles area. An insurance agent by trade, Keir enjoys traveling and culinary adventures. Follow him on Twitter, visit his website at KeirJones.com or check out his Facebook page. Or call him toll-free at 877-734-1313 and tell him Johnny Jet referred you!
In May of this year I was driving a rental car which was rear-ended by a hit and run driver in NM. Because of a mix up with the rental car company, I did not have their CDW coverage and am having to rely on my State Farm Insurance. They have paid for the repairs to the rental car and Citibank Visa will, in the end, cover loss of use and administrative fees. Where it has gotten nasty is the diminished value issue. The rental car company is trying to charge me $3200.00 for the diminished value of the car and, even though my State Farm Policy in Oregon covers me for this loss under my uninsured motorist coverage, they are stalling and refusing to pay because they say that coverage extends only to vehicles I own. They used the same uninsured motorist coverage for the rest of the claim.
I am using American Express premium coverage of $25 bucks every time I rent a car (not a luxury one, just a compact). It gives me an additional piece of mind and with current rental companies’ supplemental coverage rates, it’s usually a good deal anyway. Certain foreign countries are excluded from the coverage though, so check your coverage if you travel internationally.
We are currently in Mexico with a rental car. While they are not on the restricted list for AMEX Premium Rental Car Insurance – the “rental car cartel” refuses to accept the policy terms!