One of the most frequent questions we are asked as trusted advisors is “Do I buy the rental car insurance when renting a car?”. Whether on business or personal vacation time, the best way to make sure all and I mean all claims are covered on a rental vehicle is to purchase the loss damage coverage from the rental agency. However, that can be expensive and depending upon how often you travel, may not be the most effective way to manage this risk.
First, check with your insurance professional and make sure that your policy has rental reimbursement coverage. Keep in mind that in Texas, very few policies secured by individuals or businesses provide for “loss of use” coverage, meaning that if you wreck a rental car, the insurance will pay for the damages but not the loss of use or loss of income suffered by the rental car agency as a result of that vehicle not being on the road. Also, each rental car company has a different type of policy with varied coverage and conditions.
If you own a business, there are ways to mitigate your risk and help control the expense. As a Trusted Choice agent, we often recommend the following to our clients:
- Have a policy in place for all employees when renting a car. Included in that policy should be the type of vehicle, recommended rental car agencies and the permitted use.
- Consult with your insurance advisor on the type of insurance you have in place, including the amount of coverage available for hired car physical damage.
- Contact your corporate credit card provider and see if they offer protection for rental cars and find out the protocol to activate this type of coverage.
- Contact two or three rental car agencies and find out what their loss damage waiver coverage pays for, and if you can negotiate a corporate rate for rentals.
What may seem like a minor insurance issue can be a big headache if you don’t take some proactive measure to understand the risk involved in renting a car. Feel free to contact us if you have any questions or if we can be of help with any other insurance related matters.