So when the app or rental agent insistently asks how the car will be insured to protect against accidental damages and injuries, the choices can be daunting, especially when the renter is running late for a business appointment. The right answer can save a traveler from needless headaches, out of pocket expenses, or even their career. After all, accidents do happen.
“Bleisure is rapidly becoming a word – and a concept – from another era, as post-pandemic travelers increasingly adopt seamless blended travel behaviors and attitudes,” Crown Plaza Hotels & Resorts wrote in its 2022 report The Future of Blended Travel. The report went on to caution that “while blended travel still faces hurdles to adoption, chiefly that travel policies don’t clearly spell out what is and isn’t permitted, employees want the ability to blend work and leisure.”
Which brings us to the question of what’s allowable around extended travel that combines business with personal time, especially when vehicle rentals – and who insures them – are involved. Long the bread and butter of niche insurance compa-nies, law firms and bloggers, opinions on the subject of rental car insurance are hardly in short supply. Even seasoned travelers can use a refresher now and then.
To Insure Or Not Insure?
But first things first. You don’t need proof of insurance to rent a car, according to Enterprise Rent a Car, one of the big four rental car agencies. In fact, you don't need your own car insurance at all, as this requirement would prevent customers who don't own a vehicle from renting, they explain.
For those who like choices, Allianz Travel offers non-owners car insurance to cover drivers in all driving situations. All of which may be a relief to a growing number of urban dwellers who have eschewed car ownership.
But, what are the options for those drivers who have person-al auto insurance? At Hertz, Jonathan Stern, senior director of external communications, says the company doesn’t advise customers on the pros and cons of using the customer’s own insurance versus purchasing the optional products offered by Hertz. And, like their major competitors, Hertz doesn’t require proof of insurance at the time of rental.
“Customers should check with their insurance agent or em-ployer as to what if any coverage they have for a rental car. Hertz makes optional products available, but the decision is entirely up to the customer,” says Stern, adding a caveat, “The customer is responsible for all loss of or damage to the rental car.” He says Hertz offers optional Loss Damage Waiver (LDW), which “relieves the customer of responsibility for loss of or damage to the rental vehicle, provided the customer does not violate the terms and conditions of their rental agreement.”
Allstate Insurance says rental car insurance is a necessity for some drivers, but for others, it is a redundant expense. So, how do you know which category you’re in?
“Before you rent a car,” Allstate’s website states, “it's worth reviewing the coverage on your personal car insurance policy. In some cases, the coverage you have on your own car extends to a rental car insurer. In other words, buying rental car insurance coverage may duplicate what you already pay for. The extra cost of the rental company's coverage might make sense in a few cases, however.
For that reason, it's important to understand what your personal auto insurance covers, and what the rental agency is offering.” For some business travelers, short-term or temporary auto insurance may be more appealing. Allianz Travel has created a rental car insurance product called “OneTrip Rental Car Protector.” It provides primary coverage or covered collision, loss and damage up to $50,000, along with 24-hour emergency assis-tance. “For only $11 per calendar day you can be covered, and won't ever have to worry about using your personal car insur-ance company,” the company states. The bundled coverage also includes trip interruption up to $1,000 and baggage loss up to $1,000.Who Covers Rental Cars?
If you rent a car while traveling on company business and you purchase insurance from the rental car agency, the coverage could add “hundreds of dollars to your bill for a weekly rental,” according to employment guide website Career Trend. “Before you go on your trip, find out what kind of personal coverage you have and what kind of commercial coverage your employer has. If you don't buy insurance from the rental car company and have to make a claim, it will likely be resolved by some combination of the two coverages.” United States government employees have full coverage with the US Government Car Rental Agreement, the website advises.
Most large companies have a commercial auto insurance policy that covers you while you travel, says Career Trend. “However, in some cases your personal insurance company will have to pay the claim and then seek reimbursement from your employer's insurance company. Or the commercial policy might only provide secondary coverage, meaning it only pays after your insurance company has paid your maximum limit.” Career Trend recommends asking your company if there are any special procedures you should follow and who you should call if you're involved in an accident. They also advise telling the insurance adjuster that you’re traveling on business at the time of the reservation, and to be sure to provide your company's name along with your own.
As a renter, you’re responsible for returning a car to the rental company in the same condition it was in when you received it, advises Enjuris, a nationwide legal network of injury lawyers. There are usually three sources of insurance that would cover damage to a rental car:
Four Types of Insurance Enjuris says rental car companies typically offer supplemental insurance that’s optional or “add-ons,” including:
1. Collision damage: Also called a “Loss-Damage Waiver,” this covers financial responsibility if the rental car is damaged, stolen, out of use while being repaired, towing, and other fees.
2. Liability: This would cover you if there’s any lawsuit related to your use of the rental car. In other words, if there’s an accident and you were at fault, liability coverage should take effect in any claim against you by another driver. Usually, the limit is $1 million.
3. Personal accident insurance: This is like Personal Injury Pro-tection (PIP), which covers medical costs.
4. Personal effects coverage: Anything you transport in the car (luggage, electronics, personal items, etc.) is covered under this add-on policy.
Adding optional coverage is an expense. Each of these coverage policies likely has a per-day cost, and although it might seem like just a few dollars a day, if you’re renting a car during a vacation or for a business trip for several days, it adds up fast.
Enjuris advises that your auto, renters or homeowners, and health insurance likely covers a good portion of what an accident would cost, even in a rental car. Nevertheless, they say it’s a good idea to check your individual policies before you rent a car so you can see what you might want in supplemental coverage. As an example they cite the requirement in every state (except New Hampshire) to purchase a certain amount of liability coverage as part of your automotive policy. “Insurance policies vary and you want to make sure yours cover accidents or damage related to rental cars,” they advise strongly.
When Optional Isn’t Optional
There are also times when purchasing optional rental car insurance is a good idea, even when it’s more expensive. The legal experts at Enjuris recommend the following examples:
• If you don’t have comprehensive and collision insurance on your current policy.
• If you’re only insured for a commercial (business) policy and not a personal policy.
• If you don’t want the possibility of a high deductible.
• If you’re driving a rental car outside the US.
Coverage from your personal policy applies if you’re renting a car for personal reasons – not for business, they advise. “If you compared to yesteryear, today’s business travelers are a breed unto themselves. They enjoy finding creative ways to conflate business and leisure travel for extended stays and sightseeing, aka, “bleisure travel.” While booking air and lodging is mostly a price and convenience decision, renting a car is more complicated, especially when the vehicle is driven for personal use when the business side of the trip has ended.
So when the app or rental agent insistently asks how the car will be insured to protect against accidental damages and injuries, the choices can be daunting, especially when the renter is running late for a business appointment. The right answer can save a traveler from needless headaches, out of pocket expenses, or even their career. After all, accidents do happen.
“Bleisure is rapidly becoming a word – and a concept – from another era, as post-pandemic travelers increasingly adopt seamless blended travel behaviors and attitudes,” Crown Plaza Hotels & Resorts wrote in its 2022 report The Future of Blended Travel. The report went on to caution that “while blended travel still faces hurdles to adoption, chiefly that travel policies don’t clearly spell out what is and isn’t permitted, employees want the ability to blend work and leisure.”
Which brings us to the question of what’s allowable around extended travel that combines business with personal time, especially when vehicle rentals – and who insures them – are involved. Long the bread and butter of niche insurance companies, law firms and bloggers, opinions on the subject of rental car insurance are hardly in short supply. Even seasoned travelers can use a refresher now and then.
To Insure Or Not Insure?
But first things first. You don’t need proof of insurance to rent a car, according to Enterprise Rent a Car, one of the big four rental car agencies. In fact, you don't need your own car insurance at all, as this requirement would prevent customers who don't own a vehicle from renting, they explain.
For those who like choices, Allianz Travel offers non-owners car insurance to cover drivers in all driving situations. All of which may be a relief to a growing number of urban dwellers who have eschewed car ownership.
But, what are the options for those drivers who have personal auto insurance? At Hertz, Jonathan Stern, senior director of external communications, says the company doesn’t advise customers on the pros and cons of using the customer’s own insurance versus purchasing the optional products offered by Hertz. And, like their major competitors, Hertz doesn’t require proof of insurance at the time of rental.
“Customers should check with their insurance agent or employer as to what if any coverage they have for a rental car. Hertz makes optional products available, but the decision is entirely up to the customer,” says Stern, adding a caveat, “The customer is responsible for all loss of or damage to the rental car.” He says Hertz offers optional Loss Damage Waiver (LDW), which “relieves the customer of responsibility for loss of or damage to the rental vehicle, provided the customer does not violate the terms and conditions of their rental agreement.”
Allstate Insurance says rental car insurance is a necessity for some drivers, but for others, it is a redundant expense. So, how do you know which category you’re in?
“Before you rent a car,” Allstate’s website states, “it's worth reviewing the coverage on your personal car insurance policy. In some cases, the coverage you have on your own car extends to a rental car insurer. In other words, buying rental car insurance coverage may duplicate what you already pay for. The extra cost of the rental company's coverage might make sense in a few cases, however. For that reason, it's important to understand what your personal auto insurance covers, and what the rental agency is offering.”
For some business travelers, short-term or temporary auto insurance may be more appealing. Allianz Travel has created a rental car insurance product called “OneTrip Rental Car Protector.” It provides primary coverage or covered collision, loss and damage up to $50,000, along with 24-hour emergency assistance. “For only $11 per calendar day you can be covered, and won't ever have to worry about using your personal car insurance company,” the company states. The bundled coverage also includes trip interruption up to $1,000 and baggage loss up to $1,000.
Who Covers Rental Cars?
If you rent a car while traveling on company business and you purchase insurance from the rental car agency, the coverage could add “hundreds of dollars to your bill for a weekly rental,” according to employment guide website Career Trend. “Before you go on your trip, find out what kind of personal coverage you have and what kind of commercial coverage your employer has. If you don't buy insurance from the rental car company and have to make a claim, it will likely be resolved by some combination of the two coverages.” United States government employees have full coverage with the US Government Car Rental Agreement, the website advises.
Most large companies have a commercial auto insurance policy that covers you while you travel, says Career Trend. “However, in some cases your personal insurance company will have to pay the claim and then seek reimbursement from your employer's insurance company. Or the commercial policy might only provide secondary coverage, meaning it only pays after your insurance company has paid your maximum limit.” Career Trend recommends asking your company if there are any special procedures you should follow and who you should call if you're involved in an accident. They also advise telling the insurance adjuster that you’re traveling on business at the time of the reservation, and to be sure to provide your company's name along with your own.
As a renter, you’re responsible for returning a car to the rental company in the same condition it was in when you received it, advises Enjuris, a nationwide legal network of injury lawyers. There are usually three sources of insurance that would cover damage to a rental car:
• The rental car company
• Your personal car insurance
• Your credit card that was used to pay for the rental. (Enjuris offers the following tip: “Usually, you must decline the rental car company’s collision coverage in order for your credit card’s benefits to take effect.”)
Four Types of Insurance
Enjuris says rental car companies typically offer supplemental insurance that’s optional or “add-ons,” including:
1. Collision damage: Also called a “Loss-Damage Waiver,” this covers financial responsibility if the rental car is damaged, stolen, out of use while being repaired, towing, and other fees.
2. Liability: This would cover you if there’s any lawsuit related to your use of the rental car. In other words, if there’s an accident and you were at fault, liability coverage should take effect in any claim against you by another driver. Usually, the limit is $1 million.
3. Personal accident insurance: This is like Personal Injury Protection (PIP), which covers medical costs.
4. Personal effects coverage: Anything you transport in the car (luggage, electronics, personal items, etc.) is covered under this add-on policy.
Adding optional coverage is an expense. Each of these coverage policies likely has a per-day cost, and although it might seem like just a few dollars a day, if you’re renting a car during a vacation or for a business trip for several days, it adds up fast.
Enjuris advises that your auto, renters or homeowners, and health insurance likely covers a good portion of what an accident would cost, even in a rental car. Nevertheless, they say it’s a good idea to check your individual policies before you rent a car so you can see what you might want in supplemental coverage. As an example they cite the requirement in every state (except New Hampshire) to purchase a certain amount of liability coverage as part of your automotive policy. “Insurance policies vary and you want to make sure yours cover accidents or damage related to rental cars,” they advise strongly.
When Optional Isn’t Optional
There are also times when purchasing optional rental car insurance is a good idea, even when it’s more expensive. The legal experts at Enjuris recommend the following examples:
• If you don’t have comprehensive and collision insurance on your current policy.
• If you’re only insured for a commercial (business) policy and not a personal policy.
• If you don’t want the possibility of a high deductible.
• If you’re driving a rental car outside the US.
Coverage from your personal policy applies if you’re renting a car for personal reasons – not for business, they advise. “If you need to rent a car for a business trip, check with your employer about the coverage it carries.”
In Case of Accident
From discovering a scratch or dent which may have occurred in a parking lot to being involved in a rental car collision, consequences can range from stressful to traumatic, since it is not your vehicle. If you’re involved in an accident, the Insurance Information Institute recommends taking the following action at the accident scene, just as you would if you were in your own vehicle:
• Check yourself for injuries and ask passengers if they are injured.
• Move to a safe, nearby location, if possible.
• Contact law enforcement. Call 911 if you think life-threatening injuries may be involved. Otherwise, contact the state highway patrol, sheriff or municipal law enforcement.
• Document the accident, taking photos of all damage to your vehicle and others.
• Exchange contact and insurance information with any other involved drivers. This information should include: Full name and contact information, insurance company and policy number, driver's license and license plate number, type, color and model of vehicle and the location of the accident.
(Tip: For accuracy, and to save valuable time, take photos of driver licenses, license plates, proof of insurance card, and the injured. Persons involved in the accident who later file claims stating severe neck or back injury will have a difficult time proving their case if photos show them laughing and talking at the accident scene.)
The Institute says the next step is to contact the rental car company. The company may ask you to complete an accident reporting form, but “expectations will vary by rental company,” they advise.
Often, claims are denied because a policyholder didn't file one with their insurance company soon enough. Enjuris says to call your insurer as soon as possible so they have the accident on record. If you used a credit card to pay for the rental car, call your credit card company, too.
Who’s At Fault?
Whether an accident is your fault or caused by the other driver, Enjuris stresses what’s of paramount importance is that you’re properly insured. If you’re at fault, you can be covered by your own insurance or the supplemental rental car insurance. If the other driver is at fault, they warn to be prepared for one thing: “The rental car company might not want to wait for the insurance claim process to pay for repairs to their rental vehicle. It might charge your credit card for the full amount of the damages, and you’ll need to file a claim against the other driver’s insurance to be reimbursed.”
Furthermore, Enjuris says it’s important to remember that your rental agreement is a contract. “Your signature probably indicates that you agree to obey the law and that if you don’t, the rental company isn’t bound by the contract. If you speed, commit DUI, or do anything else that’s against the law while using a rental car, you cannot assume that its insurance, or any insurance, will cover you,” Enjuris warns.
If you’ve been in an accident involving a rental car, it might be less straightforward than an accident in your own car – “more companies, more contracts, different insurance.” At that point, you might wish to call a personal injury attorney for guidance to make sure you’re getting what you need from your insurance coverage, and how they can help keep your costs down and recover compensation if necessary.
The last point of legal advice from Enjuris could save you some grief: “We always recommend you or the employee driving the car take pictures both when picking up the vehicle and when returning the vehicle. It might sound overly cautious, but trust us: We’ve heard of rental car companies claiming damages after you’ve returned the vehicle. If you have pictures both before and after you drive the vehicle, it will help with your defense if the rental company claims damage.”
Images: Shutterstock
