If you rent a vehicle from a car rental company like Enterprise or Hertz and an accident occurs in which you are responsible for bodily injuries (or death) to third parties or damages to the property of others, your automobile insurance policy provides excess coverage beyond the rental company’s insurance policy. If you purchase the rental company’s public liability insurance, they will relieve you of any accident that causes damage or injuries (death) to third parties, as well as any legal claims that may arise. If you do not purchase the insurance, you expose yourself to the risk of being sued, summoned, and having to take responsibility by filing a claim with your own insurance company.
Regarding coverage such as collision, theft, or vandalism, it is important to know that if you did not accept the insurance offered by the company that rented you the car, your insurance policy will provide coverage for the insured vehicle as long as your policy includes coverage for collision, theft, or vandalism. Your auto insurance also provides excess coverage beyond the rental company’s insurance policy.
However, what many people don’t know is that their auto insurance only covers the loss of income related to the rental car until the maximum of their policy, typically $30 per day for a maximum of 30 days, up to $900. This limit may vary, but the usual range is $30 – $40 per day. In the case of an accident, the rental company will lose income for the time it takes to repair the car, or in the case of theft, for the time it takes the rental company to replace the unit. It is estimated that the average monthly income for a rental company is $2,000. If the vehicle takes two months to be repaired or replaced, you will have to pay or assume the difference.
Regarding the insurance provided by credit cards to cover damages such as theft, collision, or vandalism, it is important to read the “fine print” to understand what is covered and what is not. Many of them exclude sports cars and luxury vehicles with a value of more than $50,000.
More importantly, in the event of a collision, theft, or vandalism, the first thing the rental company will do is charge your credit card for the value of the damaged or stolen vehicle.
Additionally, you will be responsible to the credit card company for the payment of interest related to this charge until the owner or rental company is compensated by your credit card’s insurance.