Les Plack, a dentist from Houston, took his family on a thrilling summer vacation to Baltimore, Maryland to fulfill his lifelong dream of visiting the National Museum of Dentistry.   Having collected his luggage at the Baltimore Washington International Airport, Plack headed to the Joy Ride Rental Car counter to rent a sporty Kia Sedona for the week.  After tendering his driver’s license and successfully declining the representatives attempt to up-sell Plack to a Nissan Xterra, Plack is asked whether he would like to buy rental car insurance for “only $4 per day.”  Plack remains firm and bravely initials the boxes declining coverage.  The next day, while only five minutes from the National Museum of Dentistry, Plack is involved in a serious accident, which totals the Kia.  Having declined coverage, Plack is informed by Joy Ride’s in-house counsel that they will look to him to pay for the damages or they will file suit.  Should Plack have purchased rental car insurance?

Probably not.  If Plack’s personal auto insurance includes collision and comprehensive coverage, than that coverage should transfer over to his rental with Joy Ride.  Also, if Plack pays for the rental car with his credit card, there is a good chance that the credit card might provide some type of car rental insurance as a cardholder benefit.  However, Plack’s auto insurance policy will probably not pay for Joy Ride’s “loss of use” claim.  In other words, a claim by Joy Ride for the rental fees lost while their Kia is in the shop for repairs.  Had Plack purchased Joy Ride’s insurance, “loss of use” would be covered.

Tilting the Scales in Your Favor:

To avoid uncertainty at the rental car counter and potential for claims against you by the insurance company, check with your insurance agent about rental car coverage.  Keep in mind that insurance under your personal auto policy or credit card may not cover a car driven on a business trip, cars driven in another country, or long term rentals.