car rental insurance
 

Since I sold my car and no longer own one - whenever I rent a car I am advised by the agent to buy liability insurance ( I am covered for collison via my credit card). The rental compnies charge what I consider an exorbitant amount (daily) for liability coverage. Does anyone know - is it possible to purchase liability insurance just for a given rental period from an auto insurance company i.e. direct from the company?

Joe:

I rent about 10 time a year in Manhattan.

Do you have renters/homeowners or umbrella insurance? You also have liability insurance there. Your credit card company and the isnruance company would then fight it out unless it was excess coverage.

Please contact your insurance agent or company to determine what coverages are available to you that exist.

I have never heard of daily coverage from an insurance carrier, but that does not mean it does not exist.

I believe that, at a minimum, you would have to purchase 1 month of liability insurance if you deemed it necessary and chose to go outside of the rental agency. Depending on where you are and your driving history, that may be only $30-$40. The insurance agency will likely set you up on a six month policy, but if you choose to pay monthly and then cancel after you are done with it, you won't pay for more than a month.

Usually when you cancel an insurance policy before the termiantion date there is a penalty just to avoid a situatuion as stated here. It is called the short rate.

There are a few foreign rental cos. that include all insurance in their price quote and buy 3rd party insurance. I know whizzcarrental.com is one of these. Worth comparing prices when you next go to rent. They use major car rental cos.

Whether such a fee is charged depends on state laws. The NE seems to find a way to charge fees for just about anything, so it wouldn't surprise me if such a fee was allowed in NY.

There are two companies that have hourly rates Zipcar and Mint. Both have extreme restrictions on rentals.

I use Mint now. I used Zipcar once. I returned the car 15 minutes late, that is not hyperbole, and they fined me $50 and they would not reduce it or waive it.

Adu - Many thanks for your note re my condo umbrella policy. So I looked at the policy. Yes - I do have automobile coverage under that policy. The thing about insurance policies - you never know what you are actually covered for until you have a claim (e.g. ask those with health insurance) but this umbrella states: Automobile Motorcycle and other vehicles licensed for road use liability (bodily injury and property damage).

jroth, you really should be *ONLY* discussing this with your personal insurance agent.

Just ask him or her what happens if you have an automobile liability claim and you have only a personal umbrella liability (or personal excess liability) policy in effect with no underlying automobile liability in place.

If you wish, you could also look at your policy. And you will see that there is a schedule for underlying liability limits required for the various coverages.

You could also check with your agent if a non-owned automobile liability policy could be written for you, but they may be only written for an annual term. Depending on how often you rent automobiles, it might be worthwhile - or it might be better for you to continue purchasing the liability coverage through the rental car agency.

Any idea how a non US resident gets around this? I've taken out LDW, my travel insurance will cover any excess payable, but I'm gonna have to take up their Liability Ins. Can't imagine the 'grief' if we injured someone without Liability Ins.

Exiled - many thanks for your advice - but: believe it or not some time ago I did contact my agent and spoke to his office manager with this question and: she advised me to purchase that insurance from the car rental agency when I rent a car. So - you do not always get totally correct advice from whom you would expect it -- and I am about to contact the company to discuss this agent's conveying misinformation.

jroth, I don't understand what you mean by the "agent's conveying misinformation".

I think you don't understand that not every type of insurance coverage is available in every state for every person. My statement above said..."if a non-owned automobile liability policy could be written for you. The key word is "IF".

BTW, I think that a previous poster had better be in contact with their own insurance agent ASAP regarding their interpretation of the personal umbrella and/or personal excess liability policy.

Although these policies are written differently (with different companies), a person certainly doesn't want to learn after a claim occurs that there is either no coverage afforded or a gap in coverage.

typically personal auto insurance is based on the risks for a specific vehicle and the driver's safety/violation record. Don;t know how anyone could know this for a rental car or a driver from outside the US. That's why the rental agencies sell this coverage.

You can certainly try to buy it elsewhere but I very much doubt you'll be able to.

Many thanks to all who responded. I have the matter clarified by my company. Yes - I did get an umbrella policy when I got my condo insurance that included auto liability. But when I sold my car - and no longer owned one - they canceled that umbrella - so I do not have such coverage. So - to get such coverage when I rent a car - I do need to purchase it from the rental agency - at their exorbitant price. Seems to me that here is a good product for an insurance company to introduce - liability coverage for auto rental at a reasonable price based on statistical data for such exposure.

All car-rental companies in the U.S. must purchase basic liability coverage. Now that may not cover you if you are involved in a massive accident that is your fault, but it would be comparable to a similar policy that you bought yourself unless you carried full coverage.

Further, New York State has more stringent requirements than other states (that's one reason why rentals here are more expensive than almost anywhere else in the country), so I have always considered the basic liability coverage sufficient. I, too, purchase collision insurance when I rent a car here, but I buy have a plan from Amex that gives me primary collision coverage for a set price with every rental (for me, it's $20 for up to 30 days of rentals).

You can also get a policy from a travel insurance company for about $9 a day, which is considerably cheaper than the cost from the car-rental company.

Doug - thanks for that good info. I am still wondering why the credit card companies that include collision insurance with certain card categories (like mine) do not also offer liability insurance - which they would be entitled to charge for and not at the exorbitant rates car rental agencies charge.

I don't know NY law but ask your agent about a "non owner liability only " auto policy. If oyu rent cars often enough it is worth it.

"All car-rental companies in the U.S. must purchase basic liability coverage."

I think this varies by state. I was recently told by my insurance company that in California, the car rental companies are not required to cover liability. The driver must be covered by their own policy or much purchase liability coverage at the counter.

For non-citizens, most of the car rentals were including both collision and liability in rentals up until recently. Lately quotes for UK, AUS etc. residents only come up with collision being included. Non-citizens should be sure and state country of residence when renting a car in the U.S. as the rates can sometimes be half of what they are for U.S. Citizens.

I think there is some misunderstanding re California not requiring auto companies not to cover liability. It's hard for me to believe that any state would exempt any owner of a vehicle from having liability coverage. But if California does that - any auto rental company would be crazy not to cover itself for liability since there are all sorts of circumstances where in an accident the rental company might be held liable for damages. This - of course - is different from coverage for the renter of the vehicle who has to go out and obtain coverage if he already does not have it.

I did a little research on this, and it does appear that California law requires renters to have or purchase liability coverage. Since the vast majority of people own their own cars and carry liability coverage, which is required by all states, then it's a moot point for most people. But for New Yorkers and others who don't have car insurance or liability insurance through our home owner's policy, it seems to me that DivineMissM is correct, at least with regard to California.

Frankly, I'm also surprised and baffled by this, but it does seem to be the law. And it's a law I've never heard of. (The last time I edited a book on a California destination, the laws in California were no different than in the rest of the country, but they do seem to have changed.) I'd be interested to know if this is California-specific because I've never heard of this issue before today.

Yes - it could very well be that California requires renters of cars to carry liability insurance - just as they do for individual owners of cars. But whether California exempts companies that rent cars from carrying liability - is a different question. It is very hard for me to imagine that they have such a statute since both those who rent the cars and those who have been involved in an accident where damage is caused by a rental car could very well have a very legitimate case for action against the rental company - e.g. a mechanical defect.

jroth, sorry I haven't been online since I last responded. And I'm glad that you posted again after discussing this with your insurance agent.

It is really important that people discuss this type of situation with their own insurance agents for many reasons but the most important, IMHO, are:

1) That they don't misinterpret the language in their insurance policies (which are legal contracts) and find out after a claim that the policy didn't respond as they thought it would, or even at all;

2) Especially with contracts such as "umbrella liability" or "personal excess liability", there are requirements of coverage needed in order that there isn't a lack or a gap in coverage. Briefly, these policies cover over and/or beyond the *stated* underlying policies' liability coverage (think of a symbolic umbrella, hence the name). But if you don't have any underlying liability for a specific exposure (such as the OP's not having an automobile policy) or if the coverage doesn't have high enough limits to meet the requirements of the policy, what happens then? And how can you get it? Although it is more common nowadays, having an umbrella liability or personal excess liability policy normally confers that the policyholder has assets to protect - so just make sure you are protecting them!

3) Your personal insurance agent has the information on your other coverages and how they may be affected by this situation. As I stated above, insurance policy contracts are written differently with different companies and may have different requirements; and

4) If you are going to several states (states themselves have differing liability laws) and/or a foreign country, even one which is adjacent to the U.S., such as Canada or Mexico, call your automobile insurance agent ASAP. You'll also have to get the OK through the rental car agency in which states you can use the vehicle, even if you aren't purchasing their liability insurance coverage. Many rental car companies don't allow travel in all states, even neighboring ones.

Also, RE: the credit card you are using to get that insurance through the rental car agency and how that rental contract is written. These both *also* could have negative consequences if they are done incorrectly.

P.S. I see several comments by posters above about renters and/or homeowners policies possibly covering automobile liability. If you think so, go to your policy and look under the "exclusions" portion. If you still think so, call your insurance agent immediately to discuss this. Homeowners and/or renter's liability coverages are completely different than automobile liability coverages. As a matter of fact, automobile liability coverage is different than many other types of motor vehicles liability - such as motorhomes, motorycles, dune buggies and so forth. And perhaps even moving vans, depending on the policy language.

If any of you are even contemplating renting any of these types of vehicles, please, please *check with your insurance agent first*.

Exiled - again many thanks for further exploration of this issue. And - you are absolutely correct in noting that many insurance policy holders are really not aware of what is actually covered and under what conditions and only find out (sometimes to their chagrin) when a claim is presented. Interestingly - just recently there was a news report (and I forget which state was involved) about a state now requiring insurance underwriters to write their policies ( I think these were health insurance policies)in "plain" English. A number of example were given in the article about how policies were presently worded ( legal gobbledegook) and how they would have to be worded in the future.

Here's what I found on the car agency websites:

Most Alamo locations provide either secondary liability or no liability protection from claims by others against you resulting from an accident in your rental car. Some locations provide primary protection under the Rental Agreement; however, this protection is limited to the minimum financial responsibility required by state law.

For California :
Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.

I have just been looking at excess insurance for St. Maarten. You cannot get coverage there by the rental companies on the island. I found an AIG policy that has worldwide coverage options. Policy for 12 months is just over $100 for excess. they offer options for CDW and SLI as well. Website is insurance4carhire.com. Hope this is helpful.

The difference is that collision insurance has a very limited risk - while liability leaves the insurance company open to huge settlements. (We carry insurance of $500,000 - $1 million for that reason, but it doesn;t cost that much since our driving records are perfectly clean.) And since credit cards companies have no info on your driving record - or lack thereof - that would be a huge risk for them to take.

Credit card companies are now providing collision insurance with certain categories of their credit cards. I would have thought that they could come up with an option to purchase liability also - and they would be entitled to a reasonable charge and I believe they can come up with statistical formula for determining the cost of that risk. With current electronic technology they should also be able to charge just for those occasions when you rent and want that coverage.

I was in an accident in my rental car last year in New York City. I paid out of pocket to the car I hit (parked - 800.00 in body damage) and filed a claim with American Express platinum. During that process they explained to me that they had rental insurance as described I think by JR. Every time I rent - it will charge me around 20.00 or so - and it does provide full coverage. This is different then the insurance offered by the Platinum card. There is an issue with the loss of use that I am still dealing with (Hertz had it at around 700.00 or so).

doesn't secondary liability default to primary if there is no primary?

Just following up as I see this was topped - my accident ended up costing me close to 600.00 to be paid to Hertz - this was almost all for "loss of use" which is illegal if the accident occurs in certain states (in California for example they cannot charge you for loss of use) - so I am glad we got the additional insurance now via Amex or the 20.00 or so every time we rent. Well worth it. Our platinum card did cover around 800.00 in the damages - so it did help!

wakipaki:
No, it's the collision insurance that defaults. If you carry your own collision insurance that covers you in a rental car, your "credit card collision coverage" doesn't kick in except for what your primary insurer doesn't pay.

I haven't read every post, but advise getting the minimum insurance from the car rental company.

I've had two situations happen which has turned me into an insurance purchaser.

My habit was never to pay for any insurance offered by the car rental company. However, on two occasions, OTHERS scratched/dented my rental car. On the first occasion, the cost of repairs was $750, the second time it was $500. They were just scratches, but lots of times, people just like to scratch up a new car that's parked.

That's a total of $1,250 in repair bills. How many times would that amount cover rental insurance? Calculated at $20 each day, that's 62.5 days. How many days in a year do you rent a car?

I figured it was cheaper to pay the minimum of the rental car insurance than to go through the hassle of settling accounts - all those lost hours spent on the phone trying to straighten things out.

Just one person's experience and advice.

There is no doubt you should carry collision damage insurance when renting a car. I get that coverage via my credit card - but I was wondering about liability insurance which would be damage caused to another vehicle or person. Since I no longer own a car I don't have that coverage any more. You can buy it from the rental company - but I think their charge is exorbitant so wonder if there is any other avenue for coverage.

IMHO the liability coverage offered by the rental companies isn't exorbitant given the potential for claims. If you're in a serious accident and total another (expensive) car and there are significant injuries to persons in that car the cost can easily be hundreds of thousands of dollars.

I have my own coverage - raised to $1 Million based on the advice of our agent (there are a lot of expensive cars here and people have a way of developing life-long back or neck injuries). If you are judgement proof (have no significant assets) then it's not so much of a problem - since there is nothing that can be taken from you. But - if you own a home who would want to risk losing it rather than give $10 a day to the rental agency.

I've heard that it depends on the state where you're renting. Some states require that the auto rental company have liability insurance, others say it's all up to the renter. In California, unless something has changed recently, the auto rental companies aren't required to have liability insurance.

In case -- the thread is a year o0ld. It was topped by someone advertising a website

Not that new info isn't interesting/valid -- just that the OP probably isn't still looking for advice.

""ex·or·bi·tant   /ɪgˈzɔrbɪtənt/ Show Spelled[ig-zawr-bi-tuhnt]

–adjective

exceeding the bounds of custom, propriety, or reason, esp. in amount or extent; highly excessive: to charge an exorbitant price; exorbitant luxury.""


@ $11.95 per day??? Really ???