Last week, I had a conversation with a business owner in Sheboygan about whether or not he should purchase the rental car insurance offered at the rental desk. Truly, the decision must take into consideration what is stated in your policy, and your agent should be able to answer that for you.
Most policies will cover physical damage to the rental car and liability coverage if you cause bodily injury and property damage to others. The two claims that are often NOT covered however are "Loss of Use" of the vehicle during the time of repair and "Diminution in Value" of the vehicle. When you think about "Diminution in Value," think if you pulled a CarFax report and it showed that 10K in repairs had been performed on the vehicle a few years back. Would you rather buy that vehicle or another without the damage although they look exactly the same? There is a dollar value associated with Diminution in Value that you could be on the responsible for if not covered by your policy. Loss of use is simply the loss of rental value to the rental business because the vehicle is in the shop getting fixed.
Next time, before you go on a business trip or vacation, be sure to determine what is covered and what it not. Ultimately, it's going to come down to your risk tolerance, but I still recommend that my clients take the insurance.
By the way, if you are told that you are covered for loss of use of diminution in value, I recommend getting it in writing.
Here are some top ten safety tips for rental cars:
- Don’t rent a vehicle larger than you can handle safely. If you are usually a subcompact driver, think twice before you rent a super-sized SUV or motorhome.
- Get acquainted with the controls. Look at the dashboard and steering column and locate lights, signals, horn, hazard flashers, windshield wipers and other essential controls. Make sure the controls are working correctly.
- Get the feel of the brakes before you need to use them.
- Check that the tires are inflated properly to prevent high speed crashes.
- Look in the trunk to see if there is a spare tire and a jack.
- If the vehicle has an on-board navigation system or emergency signal, make sure you know how it works.
- Ask for any special equipment such as a child seat, and make sure it is in good shape and functioning correctly.
- Figure out where you are going before you leave the car rental lot. Check the airport map and city map. Program the navigation system before you drive.
- For your own personal security, try not to look like a visitor in a rental car. Don’t leave maps where they can be seen from outside your car.
- Keep the vehicle windows up and the doors locked.
