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When a client ask you guys, if they should buy the rental car insurance, what do you tell them?
This could be an interesting thread.........
This could be an interesting thread.........
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There was a thread just like this. I simply explain the pros/cons of each and leave it up to them. Even though they have full coverage which will cover the potential damages being fixed, it won't cover what the rental place will charge for not having a vehicle available to rent while its being repaired, there are some other caveats as well to keep in mind.
The better question is if they are renting a U-Haul truck, what do you tell them? Even if their insurance covers them, is it worth getting the extra coverage, given the increased likelihood they will get into an accident?
On rental cars, as Robb said, I go through what they are covered for, what they aren't, don't forget the deductibles. Driving a strange car in a strange area, more likely to have an accident. Blah, blah, blah, but it is their choice.
Dan
On rental cars, as Robb said, I go through what they are covered for, what they aren't, don't forget the deductibles. Driving a strange car in a strange area, more likely to have an accident. Blah, blah, blah, but it is their choice.
Dan
- 15,041
Speaking of rental trucks...
Make sure you know what your policy actually covers. My agent's staff swore up and down that it would be covered. Fortunately, I asked to see the policy. Specifically excluded. I guess it would have been an E&O claim, but its not worth the hassle. I definitely bought coverage from the rental company.
Make sure you know what your policy actually covers. My agent's staff swore up and down that it would be covered. Fortunately, I asked to see the policy. Specifically excluded. I guess it would have been an E&O claim, but its not worth the hassle. I definitely bought coverage from the rental company.
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That is very tricky. It differs from one carrier to another. I actaully have called every carrier I have and asked them directly. You would be surprised how much is not covered.
As far as selling rental insurance on auto policies, I always offer.
As far as selling rental insurance on auto policies, I always offer.
Like:
Diminished value won't be covered by your auto policy but the rental car company has the right to charge it.
The rental car company can get the car fixed wherever they want and they don't have to negotiate on the charges. So if your insurance company thinks it is a $1000 repair and the shop charges the rental car company $1500, guess who pays the extra $500 in additiona to any deductibles?
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Remember, A rental car if different than a U-haul......U-haul definately not covered, as thats classified as for hire, correct?
The BIG I, sent us this form, so This is what I email the client, so they know, hopefully, it will help keep me out of trouble! LOL
Copyright 1999 by Independent Insurance Agents of America. All rights reserved. Reprinted with permission.
The BIG I, sent us this form, so This is what I email the client, so they know, hopefully, it will help keep me out of trouble! LOL
The Top 10 Reasons to Purchase
the Rental Car CDW/LDW
the Rental Car CDW/LDW
To paraphrase Shakespeare, “To purchase the CDW or not to purchase the CDW, that
is the question.” It has been debated for years whether or not a person renting a
vehicle should purchase the Collision (or Loss) Damage Waiver from the rental company.
is the question.” It has been debated for years whether or not a person renting a
vehicle should purchase the Collision (or Loss) Damage Waiver from the rental company.
Our recommendation is that consumers, in general, SHOULD purchase
the CDW/LDW, at least for short-term rentals. Our reasons are given below.
the CDW/LDW, at least for short-term rentals. Our reasons are given below.
1. Loss Valuation.
The Personal Auto Policy (PAP) covers the lesser of the “actual cash value” of the vehicle
or the amount “necessary” to repair or replace the damaged property. The rental agreement may very well contractually
obligate you to reimburse the rental company for the “full value” of the vehicle. The PAP also does not pay
for any “betterment” (increased value of new parts replacing old ones) of the vehicle, nor any “diminution” of
value (if the market value of the vehicle after repairs is less than that before the accident).
or the amount “necessary” to repair or replace the damaged property. The rental agreement may very well contractually
obligate you to reimburse the rental company for the “full value” of the vehicle. The PAP also does not pay
for any “betterment” (increased value of new parts replacing old ones) of the vehicle, nor any “diminution” of
value (if the market value of the vehicle after repairs is less than that before the accident).
2. Loss Settlement.
As implied above, there may very well be disagreement over the value of the vehicle or
the amount charged for labor and materials to repair it. Your auto policy’s Appraisal clause may be invoked with
its accompanying costs. More importantly, the insurance company has the right to “...inspect and appraise the
damaged property before its repair or disposal.” However, the rental company, unlike you, is not contractually
obligated to the insurer...it may choose to make the repairs immediately, potentially resulting in a lack of PAP
coverage because of failure to comply with this contractual condition. In any case, purchase of the CDW usually
allows the renter to “walk away” without the headaches involved in adjusting an auto claim.
the amount charged for labor and materials to repair it. Your auto policy’s Appraisal clause may be invoked with
its accompanying costs. More importantly, the insurance company has the right to “...inspect and appraise the
damaged property before its repair or disposal.” However, the rental company, unlike you, is not contractually
obligated to the insurer...it may choose to make the repairs immediately, potentially resulting in a lack of PAP
coverage because of failure to comply with this contractual condition. In any case, purchase of the CDW usually
allows the renter to “walk away” without the headaches involved in adjusting an auto claim.
3. Loss Payment.
The rental agreement may require immediate reimbursement for damages, and it is customary
practice for the rental company to charge your credit card. This can create a significant debt, “max” out the
card's credit limit (perhaps shortening a vacation or business trip), result in litigation, etc.
practice for the rental company to charge your credit card. This can create a significant debt, “max” out the
card's credit limit (perhaps shortening a vacation or business trip), result in litigation, etc.
4. Loss Damage Waivers (LDW).
Rental agreements often make the renter responsible for any loss in
value beyond normal wear and tear, regardless of the cause and regardless of fault. In order for your PAP to
respond, you must insure at least one vehicle for both collision and other-than-collision (often called “comprehensive”)
coverage. If not, your policy will not respond to rental car damage and loss of use claims.
value beyond normal wear and tear, regardless of the cause and regardless of fault. In order for your PAP to
respond, you must insure at least one vehicle for both collision and other-than-collision (often called “comprehensive”)
coverage. If not, your policy will not respond to rental car damage and loss of use claims.
5. Indirect Losses.
You will most likely will be responsible for the rental company’s loss of rental income on
the damaged unit. Your policy has limited coverage for these charges.
the damaged unit. Your policy has limited coverage for these charges.
6. Administrative Expenses.
The rental contract may make the insured liable for various “administrative”
or loss-related expenses such as towing (e.g., one insured was charged for a 230-mile tow), appraisal, claims
adjustment, storage, etc. Some of these expenses may not be covered by the PAP.
or loss-related expenses such as towing (e.g., one insured was charged for a 230-mile tow), appraisal, claims
adjustment, storage, etc. Some of these expenses may not be covered by the PAP.
7. Other Insurance.
The PAP says that it is excess over: (1) any coverage provided by the owner of the auto,
(2) any other applicable physical damage insurance, and (3) any other source of recovery applicable to the loss—
travel policies, credit card coverages, etc. The potential controversy over who pays what is obvious and can result
in litigation. In addition, keep in mind that many states have statutes, proprietary policy forms, and/or case law
precedents that may govern this and other rental car exposures.
(2) any other applicable physical damage insurance, and (3) any other source of recovery applicable to the loss—
travel policies, credit card coverages, etc. The potential controversy over who pays what is obvious and can result
in litigation. In addition, keep in mind that many states have statutes, proprietary policy forms, and/or case law
precedents that may govern this and other rental car exposures.
8. Excluded Vehicles & Territories.
The PAP normally does not provide physical damage coverage for
motorcycles, mopeds, motor homes, or other vehicles that are not private passenger autos, pickups, vans, or trailers.
In addition, use of covered vehicles is limited to the U.S., its territories and possessions, Puerto Rico, and
Canada (the rental agreement may also exclude operation outside a specific geographical area). If you rent a
trailer (U-Haul, camper trailer, etc.), coverage is limited to $500.
motorcycles, mopeds, motor homes, or other vehicles that are not private passenger autos, pickups, vans, or trailers.
In addition, use of covered vehicles is limited to the U.S., its territories and possessions, Puerto Rico, and
Canada (the rental agreement may also exclude operation outside a specific geographical area). If you rent a
trailer (U-Haul, camper trailer, etc.), coverage is limited to $500.
9. Excluded Uses & Drivers.
The PAP may have limitations on use of vehicles that are not otherwise
excluded by the rental agreement CDW or LDW. Also, the PAP may include an exclusionary endorsement for
certain drivers or may apply only to designated individuals—the CDW will probably also only apply to certain
individuals, but operators for which no PAP coverage is available may be afforded protection under the rental
agreement by adding them as designated drivers.
excluded by the rental agreement CDW or LDW. Also, the PAP may include an exclusionary endorsement for
certain drivers or may apply only to designated individuals—the CDW will probably also only apply to certain
individuals, but operators for which no PAP coverage is available may be afforded protection under the rental
agreement by adding them as designated drivers.
10. Additional and/or Future Costs.
The PAP will most certainly include a deductible in the range of
$100-$500 or more. In addition, payment for damage to a rental car may result in a significant premium increase
(if not nonrenewal) via surcharges or loss of credits.
Although most CDW/LDW fees are considered outrageous, if not unconscionable, we advise you to purchase the
CDW/LDW for short-term rentals. If anything, this will give you peace of mind while on vacation or business,
and it could save you from a lot of inconvenience and lost time and money.
$100-$500 or more. In addition, payment for damage to a rental car may result in a significant premium increase
(if not nonrenewal) via surcharges or loss of credits.
Although most CDW/LDW fees are considered outrageous, if not unconscionable, we advise you to purchase the
CDW/LDW for short-term rentals. If anything, this will give you peace of mind while on vacation or business,
and it could save you from a lot of inconvenience and lost time and money.
Other Tips:
• When you rent a vehicle, ask for an advance copy of the rental agreement in order to determine your contractual
obligations for damage...a few rental car companies post this information on their web sites. Here is a listing of
several national rental car company web sites:
• Advantage
obligations for damage...a few rental car companies post this information on their web sites. Here is a listing of
several national rental car company web sites:
• Advantage
www.arac.com
• Alamo
www.goalamo.com
• Avis
www.avis.com
• Budget
www.budget.com
• Dollar
www.dollar.com
• Hertz
www.hertz.com
• National
www.nationalcar.com
• Payless
www.paylesscar.com
• Thrifty
www.thrifty.com
In addition, if you will be traveling abroad, check out
www.auto-europe.com for information about driving
requirements and rental car programs in Europe and other countries around the world.
• Be sure to inspect the rental vehicle for existing damage to the interior and exterior and get their acknowlegement
of such damage in writing before leaving the premises.
• Be sure to take proof of insurance with you on your trip.
• Carry an inexpensive disposable camera with you on your trip to document existing damage or damage that may
occur while using the vehicle.
requirements and rental car programs in Europe and other countries around the world.
• Be sure to inspect the rental vehicle for existing damage to the interior and exterior and get their acknowlegement
of such damage in writing before leaving the premises.
• Be sure to take proof of insurance with you on your trip.
• Carry an inexpensive disposable camera with you on your trip to document existing damage or damage that may
occur while using the vehicle.
Copyright 1999 by Independent Insurance Agents of America. All rights reserved. Reprinted with permission.
I've had a number of claims due to clients driving rental cars. Truly never had a horror story on the claims side, but many on the clients side. A small sampling of my rental car claims:
- Client had an accident in her car. Driving rental car while hers is in shop. Totalled rental car (and 2 other cars). Oops. Not a good day, 2 accidents within a week.
- Rental car company called and asked how to file a claim to clean the blood out of the car. Clients husband was shot in the passenger seat. (Yes, this was in Oakland).
- Client rented a car, loaned it to a friend, who let his friend drive it and it got stolen. Client obviously on hook for this, since they are on the rental contract.
- Client allowed friend to drive rental car, friend not listed on rental contract, obviously friend got into an accident. Tried to file claim through me, denied because driver not listed on rental contract (which is why the rental car company wouldn't cover it even though she had bought the extra insurance). Had to file claim through drivers policy.
Yes, rental car companies can make it interesting. To be honest though, I've never had a problem with them running up a huge bill for repairs. I'm sure it happens though.
Dan
- Client had an accident in her car. Driving rental car while hers is in shop. Totalled rental car (and 2 other cars). Oops. Not a good day, 2 accidents within a week.
- Rental car company called and asked how to file a claim to clean the blood out of the car. Clients husband was shot in the passenger seat. (Yes, this was in Oakland).
- Client rented a car, loaned it to a friend, who let his friend drive it and it got stolen. Client obviously on hook for this, since they are on the rental contract.
- Client allowed friend to drive rental car, friend not listed on rental contract, obviously friend got into an accident. Tried to file claim through me, denied because driver not listed on rental contract (which is why the rental car company wouldn't cover it even though she had bought the extra insurance). Had to file claim through drivers policy.
Yes, rental car companies can make it interesting. To be honest though, I've never had a problem with them running up a huge bill for repairs. I'm sure it happens though.
Dan
- 1,473
Please next time show your article first.....This is not poker!
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