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Renting a Car, What Coverage Do I Need?
Monday April 25, 2016 | Staff

Rental car companies operating in the United States offer insurance as part of the rental contract. The coverage tends to be quite expensive so when renting a car it is good to know where you stand. The rental car company typically offers two basic types of insurance.

First, most rental car companies offer CDL or Collision Damage Waiver Coverage. This coverage protects you if the rental car sustains damage or is stolen. However, your collision coverage will pay to fix the rental car, less the deductible you selected. If you have comprehensive coverage on your cars, this coverage will pay in the event that the rental car is stolen. In addition, some credit card companies provide coverage for damage to the rental car if you use their credit card when renting the vehicle. However, pending the resolution of your claim under your own automobile coverage, the rental company may charge your credit card for the damage.

Rental car companies also frequently offer accident liability protection. This coverage pays for damages sustained by others if you cause an accident while operating the rental car. If your automobile policy has bodily injury and property damage liability coverage, your automobile insurance should cover you for the injuries to persons or property due to accidents you caused if the accident occurs in the U.S. or Canada.

In Florida, PIP coverage may provide coverage to you or a relative while residing in an insured vehicle if the accident occurs in the U.S. or Canada. However, PIP coverage will not cover the cost of medical treatment arising from injuries you suffer in an out of state accident while occupying a rental vehicle. If you have health insurance it should cover your medical care after a deductible/ or copays are met if the medical provider is not a member of your health insurance company's plan network.

Travel outside of the U.S. or Canada offer even more challenges. Your U.S. based insurance frequently will not apply at all. Most automobile insurance policies written will not cover your vehicles or belongings once you leave the country. Automobile insurance coverage purchased in the U.S. typically will not cover the charges for medical treatment from an accident in a foreign country. However, most insurers offer "overseas" insurance. Your insurer will arrange with a foreign insurer to provide coverage in the countries where you will be traveling.

Be sure you understand what the coverage you already have in place and what is offered by the rental car company is going to actually pay. Will the coverage pay for medical treatment only to you or will all occupants of the rental car be covered in an accident that causes injuries? Does the coverage pay for the repairs to the rental car? Will the repairs be subject deductible you have to pay, and if so, how much? Will the coverage pay for damage to any other vehicles involved in the accident, if the accident was your fault? If so, is there a limit above which it will not pay.

If you intend to rent a car for a trip out of state, I recommend you call your auto insurance agent and your credit card company before you leave. It is human nature to assume nothing bad is going to happen. A short conversation costs you nothing and will take only a few minutes of your time. It is always better if you know what coverage will apply on your trip and what coverage you may want to consider purchasing for the trip. It will save you many headaches later if an accident occurs.

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