During the summer, more drivers are out on the roadways and traveling with friends and family.  While it is a popular time for road trips, it is also a busy time for rental car dealerships.  Before you rent your next vehicle, you should consider whether that rental would be covered under your regular automobile insurance, and, if you need supplemental rental insurance, exactly what it would cover.

 

What you need to rent a vehicle:  In order to rent a vehicle, you need three things: a driver’s license, a credit card, and car insurance.  First, the driver’s license must be state issued.  It helps prove your age, and ensures that you are a legal driver.  In the US, the minimum age to rent a car is 21-years-old; drivers who fall between the ages of 21 and 24 may have to pay an additional rental agency fee.  Next, you need an active credit card, with the name on the card matching the name on the driver’s license.  The rental agency will put the credit card on hold for insurance purposes.  Credit card companies do offer some coverage for rental cars, but you need to check the fine print on your card agreement.  The credit card may cover property damage or theft only, for an additional fee.  You may already have sufficient coverage though another source, such as auto insurance or health insurance.  Third, in order to rent a vehicle, you will need some form of auto insurance.  Some personal auto insurance policies do cover rental cars, but with certain limits and deductibles.  That auto coverage may also depend on whether you are renting the vehicle for business or pleasure; personal auto insurance is more likely to cover vehicles rented for personal use.

 

Personal automobile insurance:  In Georgia, every car you operate must have at least the minimum legal coverages, which is $25,000/person and $50,000/collision.  Many auto insurance policies will include coverage for a driver’s primary vehicle, as well as vehicles they occasionally drive.  Occasional typically includes rental cars.  A person’s coverage when they are behind the wheel is limited in terms of their auto insurance policy; therefore, it is essential to investigate levels of coverage including collision and comprehensive.

 

Rental car insurance:  Rental car companies, by Georgia law, must provide the state-required amount of liability insurance ($25,000/person and $50,000/collision).  If your own auto insurance policy or credit card company do not cover rental cars, then you must purchase liability insurance directly from the rental car company.  Typically, that costs $7 to $14 each day, on top of the base rental car fee.  The rental car company’s insurance will cover all authorized drivers, including any travel companions who may operate the rental vehicle.

 

It is important to note that these supplemental rental insurance policies may only come into play if the driver does not have any other form of auto insurance or coverage.  That is the only time you must purchase the rental policy.  Typically, supplemental policies do not stand in place of your own automobile insurance.

 

Also, it is essential to understand exactly what the supplemental rental insurance policy will cover and/or how many passengers it covers.  Often, the rental car dealership will strongly encourage drivers to purchase the supplemental policy without explaining the fine print.  The rental policy can provide a false sense of security, because generally, your own insurance policy is the primary policy.  When you are renting a vehicle, you need to understand that your own auto insurance policy comes into play before a supplemental rental policy (if that secondary policy comes into play at all); you should also be clear about who or what any supplemental policies would cover, and how much.

 

Additional insurance coverage for purchase:  There are essentially four types of additional insurance available for purchase at the rental car dealerships.  The prices of the insurances will vary, depending on the rental company, state, and the type of vehicle being rented.  First is loss-damage waiver (also known as collision damage waiver) which functions by waiving the driver’s financial responsibility if the rental car is damaged or stolen – as long as the driver did not cause the damage while speeding, driving on unpaved roads, or driving under the influence.  Loss-damage waiver also covers loss-of-use charges, towing charges, and other related fees.  The price is $9 to $19 per day, on top of the base rental charges.  Second is liability coverage (as mentioned above).  This coverage provides excess liability coverage of as much as $1M for the period of time that you are renting the vehicle.  The price is $7 to $14 a day, on top on the base rental fee.  Third, personal accident insurance covers the medical costs of a driver and/or passengers involved in a collision while renting the vehicle.  This type of coverage costs an additional $1 to $5 a day; however, it is a good idea to check your health and personal auto insurance to see if this if medical costs are already covered.  Fourth, personal effects coverage insures the personal items that you keep in the vehicle while you are renting it.  It is coverage in case of theft.  This insurance plan costs about $1 to $4 a day, on top of the base rental car fees.  You homeowners or renter’s insurance may already cover personal effects, so be sure to check that policy before purchasing the personal effects coverage from the rental car dealership.

 

Insurance limitations and coverage caps:  Before you hit the road this summer, it is important to take a look at your different insurance policies (auto, home, and health) to determine exactly what is covered, and how much.  Those levels of coverage can vary widely, depending on a number of different factors.  No one plans on being in a collision – but you can take the appropriate precautions to ensure your family and fellow passengers are covered.  If you need help deciphering your auto insurance policy, or if you have been involved in a collision and need help with your personal injury case, call The Gore Law Firm at (404) 436-1529 to schedule a free personal injury consultation.

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