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» The Ornery American Forum » General Comments » The risk of using your own insurance on a rental car

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Author Topic: The risk of using your own insurance on a rental car
LetterRip
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My niece was driving a rental that was hit by a drunk driver.

She had opted to use her own insurance on the vehicle.

Now the rental company is claiming it can charge her for each day it is out of service while being repaired.

Did some googling...

quote:
He pointed out that renters could be hit with significant expenses if they had an accident while driving a rental vehicle. For example, standard auto policies typically do not provide coverage for the loss of rental income during the time that the rental car is being repaired. A rental car company could hit you up for as much as $50 per day for each day its vehicle is out of service. This expense is in addition to your standard policy deductible. Rental car companies also regularly charge administrative fees related to accident events, and these can add up to hundreds of dollars.

Some rental car companies also require that renters cover the "loss of value" to their vehicle after the accident damage has been repaired. This can be thousands of dollars that is not generally covered by standard auto insurance policies.

Domzalski also explained, "When an accident occurs in a rental car that is covered by the CDW, Collision Damage Waiver, the renter will not receive an accident surcharge on his personal policy. And this is a big deal." The accident surcharge can add a 20-percent premium to your auto policy that lasts for up to three years. Without the CDW, you'd end up paying at the time of the accident and for years after.

http://autos.aol.com/article/rental-car-insurance/

If she could use her own insurance, one would have a reasonable expectation that a standard policy would cover all expenses that would arise unless mentioned otherwise.

Anywho just thought folks might not be aware of this risk.

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AI Wessex
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That's a scary story. As a lesser side note, I was in Seattle for a week recently and rented a car. I had the temerity to drive to Bellevue, which is one the ritziest and most well-patrolled cities in the country. I got pulled over for not signalling on a lane change when I moved from one city street traffic lane to another at about 20MPH. The officer asked to see my insurance certificate and when I told him it was a rental car he looked at my rental agreement and said that since I declined the Hertz coverage I was required to have my own insurance certificate with me, which carries a $540 fine if you don't have it. He pointed out that he could have written me up on at least three separate violations, but probably since I was a tourist leaving money all over the area he let me go.

I've asked friends (and my insurance agent) about having to carry my own insurance card if I decline coverage and nobody here has ever heard of that before. Does anybody know what the law is?

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msquared
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In our state we are supposed to have a card in the vehicle but we also carry a card in our wallet/purse. I assume it is for this type of reason. Or if you drive someone elses car.

I found it interesting. You are insuring the car. When my oldest got his license, we did not have a car for him to drive (he drove ours). Trying to get a card with his name on it, but no specific car listed was a pain.

msquared

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DonaldD
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quote:
Some rental car companies also require that renters cover the "loss of value" to their vehicle after the accident damage has been repaired. This can be thousands of dollars that is not generally covered by standard auto insurance policies.
Actually, if loss of value is not explicitly excluded from your policy, you can generally recuperate this loss from your insurance company if you know to demand it.
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Matthew Compton
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quote:
Originally posted by AI Wessex:
I've asked friends (and my insurance agent) about having to carry my own insurance card if I decline coverage and nobody here has ever heard of that before. Does anybody know what the law is?

In Washington every vehicle is required to have liability coverage of at least 25/50/10. If you don't own the car you're driving it's best to keep your liability ID card in your wallet or purse.

I always recommend that my customers purchase the rental car company's insurance plan to cover the lost income costs fi the vehicle is in an accident.

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Matthew Compton
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quote:
Originally posted by msquared:
In our state we are supposed to have a card in the vehicle but we also carry a card in our wallet/purse. I assume it is for this type of reason. Or if you drive someone elses car.

I found it interesting. You are insuring the car. When my oldest got his license, we did not have a car for him to drive (he drove ours). Trying to get a card with his name on it, but no specific car listed was a pain.

msquared

ID cards normally only list the policy owners on it and the vehicle they are covering. If you got a broadform or named operator, non-owner policy for your son, then his name would have been listed on the ID card.
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msquared
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I just find it wierd. The state requires insurance but you only insure a car? My son does not have a car but does drive occasionally (at home on breaks and at school when he borrows a friends car). I pay for his insurance, but it was tough to get a card showing he was insured. We have three drivers but only two cars.

msquared

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Matthew Compton
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quote:
Originally posted by msquared:
I just find it wierd. The state requires insurance but you only insure a car? My son does not have a car but does drive occasionally (at home on breaks and at school when he borrows a friends car). I pay for his insurance, but it was tough to get a card showing he was insured. We have three drivers but only two cars.

msquared

The card doesn't really matter. Police officers care, but the card isn't really part of the policy contract. All potential drivers who live in your household, even those who are away at school, should be listed on your policy. That way if they borrow a friend's car, or are the designated driver they'll be covered if in an accident. Ideally their friend's insurance would cover it, but who can guarantee that a college student will have insurance...

I can see how it can be confusing if you don't have to deal with it everyday.

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AI Wessex
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I think that's exactly right. When my older daughter got her driver's license I called the insurance company and was told (or thought I was) that she was covered under my policy. They didn't say (or I didn't hear) that I still had to *add* her to the policy as a part-time driver, not the principal driver on either of our cars.
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LinuxFreakus
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The main reason I never buy these stupid damage waiver things when renting cars is that they are ridiculously overpriced. If I added this to the rental every time I rented a car the cost would end up being many times whatever deductible or fees I might need to deal with.

It sometimes would cost almost half as much for a one day rental as I pay for a whole month of my regular insurance. Unless I constantly had issues there is no way it would be cheaper long term to pay for that extra waiver.

That said, for business purposes, I tend to add it since I'm not the one paying in that case [Smile]

[ December 19, 2012, 02:16 PM: Message edited by: LinuxFreakus ]

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AI Wessex
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My company refuses to reimburse for rental company insurance for exactly that reason. They will defray (some or all) of the additional incurred costs if I have an accident, since the likelihood of any employee having an accident is far outweighed by the gouging cost of the extra insurance.
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Matthew Compton
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Since I work for an insurance company they will cover the cost of any insurance I pay for the rental on business.

Insurance is a gamble. I don't buy the rental company's plan when renting for personal use. I'm betting that if I am in an accident it will be the other person's fault.

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AI Wessex
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Well, since you work for an insurance company you already know that 90% of the time it *is* the other person's fault.
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Matthew Compton
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Well, my clients always say that when I'm quoting them. :-)
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