Do I need Rental Car Insurance?

Whenever you rent a car that replaces your regular vehicle while traveling or while yours is in for repairs, you will be asked if you would like to purchase rental car insurance coverage.

The answer can sometimes be confusing and all situations are going to be different. Rental car contracts do vary greatly and, like with most things, change from time to time. A typical personal auto insurance policy may not cover all of the rental car expenses in the unfortunate event of an accident while driving one of their vehicles.

Furthermore, your existing auto policy must cover comprehensive and collision damages in order for the rental vehicle to be covered for those types of accidents. If you don’t carry comprehensive or collision, you will need to purchase those from the rental car company.

There are three expenses that a rental company may try to charge you for should you be involved in an accident or other claims that puts their vehicle “out of use.”

  • Loss of Use: This means that the rental car company is losing revenue because their vehicle is unavailable to be rented while it is being repaired. The rental car company may charge you for the days it is “out of use” while being repaired (typically, the daily rate of the vehicle for as many days as is needed to repair the vehicle.) However, the rental car company needs to prove to you that they rented the other vehicles on their lot and actually lost money. It is up to you to push them for this proof.
  • Diminution in value: After a rental vehicle has passed its life as a rental vehicle, it will be sold as a consumer vehicle. The rental car company may deem it necessary to charge you a diminution of value claim. Essentially claiming that the vehicle isn’t worth what it was worth PRIOR to the accident and is now being sold with an accident on its vehicle history report.
  • Before & After: Often, when a vehicle is involved in a serious collision and has extensive damage, the vehicle may simply be sent to auction or salvage instead of being repaired (even if it is repairable). They do this because they feel it may not be safe to repair the vehicle and put back into their fleet. In this case, they may attempt to charge you, the renter, for the difference in market value on the day you rented it versus what they sold it for at auction. While this is relatively uncommon, it does happen and it is important that you be prepared for this situation.

As mentioned above, these 3 claims are NOT covered by any personal auto insurance policy and it is your decision if you would like to purchase the rental car coverage from the rental car agency when you rent their vehicles.

If you have questions, please contact your Mount Vernon Insurance Agent, Wycoff Insurance with any questions!