Frank: One of the big questions we always get that people want to know is when I rent a car, do I need to buy the collision waiver, the insurance that the car company is offering. And Kevin's going to tell us about that.
Kevin: Well, that's a question that everybody likes to ask because when you're there, you always hear the spiel from the kid behind the counter, and they make it sound like this wonderful product. People always want to know, should I pay for that? Should I pay that daily charge, which has increased significantly over the years.
Frank: what, about $15 to $20 a day?
Kevin: Oh, it can range from $15, and I've seen it as high as $30 a day. The reason why purchasing that warranty -- because it's not an insurance product, it's a warranty product -- from the rental agency is a good idea is because when you sign that contract when you rent the car, you're taking a lot of liability on yourself that you may or may not realize. And part of that liability is you're guaranteeing the rental agency if something happens to that car, you're going to take responsibility for it. Now, if you damage the car in an accident, you may be able to file a claim against your current auto insurance company, and they may help you pay for it depending on what type of auto insurance you have. But other reasons why you may want to buy the waiver is because if you damage the rental car, you can call the rental agency, you can call the 800-number, they'll come and get the car. Some of them will bring you another one. You don't have to make a claim against your auto insurance. You don't have to pay a deductible, which you will have to pay if there's a claim against your auto insurance. Some deductibles can be as high a $1,000 depending on the damage. You can relieve that responsibility, and it will also cover the rental agency's loss of income from them not being able to rent that car for a week or for two weeks or for longer because they can't put it on the road because you broke it. So, for people who ask, should I buy this? If you have auto insurance, there's a good chance your insurance company might pay to fix the damage to that rented car. What most of them will not pay for is any loss of income to the rental agency, which can be substantial. You're going to have to pay a deductible, which is an out-of-pocket expense to you, and it's going to be a claim against your auto insurance policy, which means your auto insurance might get more expensive or even non-renewed. So, when you're thinking whether or not it's a good deal, if you remember those factors, it might help you make the decision.
Frank: We had a guy, he rented a car in Alaska, and he brought it back, parked it, put the keys in the thing. About four months later, he gets a letter that says, hey, you wrecked our car. And he had to go back and forth arguing with them saying, hey , I didn't wreck your car; who says it didn't happen I dropped it off? I think he ended up paying a deductible and having his company pay it. But again, they were charging him for days off that he had to pay out of pocket as well.
Kevin: Right, absolutely. And another thing to remember is it all depends on the rental agreement. The details that I can tell you from this desk are what I know from a few examples from national rental agencies, but there's rental agencies out there that might have agreements that ask for a tremendous amount of information that I haven't even discussed. So, it's always a good idea to read the rental agreement. And if there's any question at all about what coverage you might have under your auto insurance policy for a rented vehicle, you'll want to give your insurance agent a call.
Frank: Again, give your agent a call, review your policy, and if you like a second opinion, give us a call at the Insurance Center of Central Florida. Our number is below.
http://www.theinsurancecenter.us/
888-363-4706
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