Does my Maine Car Insurance Cover Me When I Rent a Car?

Summer vacation season is almost in full swing. Two common questions our clients ask is “does my auto insurance cover me if I rent a car on vacation?” and  ”should I buy insurance from the car rental company?”

The answer is a bit complicated.  It may help to look at the types of coverage that the car rental companies offer.  Of course, car rental contracts differ. It’s smart to request a copy of the rental agreement to review ahead of time with your independent insurance agent.

Liability Damage Waiver

Maine auto insurance policies provide protection for liability you incur for injuries or property damage you cause to others within the U.S. Therefore, it’s not usually necessary to purchase a Liability Damage Waiver from the rental car agency since you usually already have coverage under your own insurance. An exception might be if you have purchased very low liability limits.

Collision Damage Waiver

Rental car agencies typically try to sell “Collision Damage Waivers” (CDW) for about $8 – $15 per day. These waivers are not insurance. In effect, a CDW simply buys a promise from the rental car agency that they won’t make you repair or replace a damaged or stolen vehicle.

If you already carry collision and comprehensive coverage under your own personal auto policy, your insurance will extend to the rental car. You should carefully evaluate your existing coverage and discuss with your agent whether or not purchasing a CDW is appropriate for you.

BUT…

There may be gaps between the coverage your insurance policy provides and your contractual obligation to the rental company.  For example, many car rental companies may hold you responsible for the loss of use of a damaged rental car. Many charge you the daily rental rate for every day the car is undergoing repairs. While many auto insurance policies will pay “loss of use” charges, those that do set dollar or time limits that may or may not match the rental company’s claim.

There are other expenses that most auto policies do not cover. One example is diminished value which can amount to several thousand dollars. Consult your independent insurance agent to find out what’s best for your travel needs.

Foreign Travel – As a general rule, when traveling to a country other than Canada and renting a car, you will have to purchase auto insurance in the country where you will be driving. Some personal umbrella policies may provide liability coverage for rental cars abroad; few will cover damage to the rental car itself.  Again, seek professional expert advice from an independent agent before you leave home.

Check the Vehicle - An important way to protect yourself when renting a vehicle is to check over the car carefully for damage in the presence of a representative of the rental car company before you leave the lot and when you return it. Request all prior damages be noted in writing. Car renters have been known to receive damage claims from rental car companies weeks after turning in vehicles. There is no way to prove your innocence at that point.

The Bottom Line

Buying the waivers from the car rental company is always the safest way to make sure you have no coverage gap. But, you’ll probably want to weigh the cost of those waivers against the additional risk you assume by not buying them.

We’re happy to answer these and other insurance questions for our clients.  Call us at 207-799-5541.

Bon voyage!