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May 16, 2011

For years, the typical thought was if you had full coverage on your auto policy, you didn’t need to buy the rental company’s coverage.  That may not be the best decision any longer.  In reading some of the rental contracts more closely, we found that many of them hold their customers liable for expenses that most insurance contracts do not cover.

Diminution of Value – Serious damage will reduce the value of a vehicle, and you can be held responsible to pay for that reduction in value.  If the vehicle is damaged beyond repair, it may be sold for salvage, and you can be responsible for the difference in the replacement cost of the vehicle before the accident and the amount they receive in salvage value.  

Loss of Use – It can take weeks to repair a seriously damaged vehicle.  Every day that the vehicle is in the shop, it is costing the rental company revenue.  You can be held responsible for the lost rental fees.  

Also, there are limitations on many policies for rented vehicles.  Some limit the amount they will pay out in Physical Damage, and some limit the size of vehicle that they will cover.  Be sure to contact your agent before renting a larger vehicle, such as a moving van, or any other high-valued vehicle.  

Please call your PLC representative if you have questions about your specific coverage for rental vehicles.

© 2019, PLC Insurance. The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report. Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader. The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance professional.

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