Renting a car? Renter beware!

Have you ever rented a car while on vacation and thought I don’t need to buy rental insurance my auto insurance policy or my credit card will cover me? I don’t want to scare you away from traveling and enjoying your vacation, but there are so many potential gaps in coverage it is frightening.

Coverage is not Worldwide: Let’s say you are spending a week in Aruba and decide to rent a car. Drive carefully because the Massachusetts auto policy only offers you coverage in the US and Canada. If you get into an accident your Mass auto policy offer no coverage at all. Make sure you purchase the Collision damage waiver (CDW) from the car rental company.

Loss Valuation: Let’s say you rent a car in the US and get into an accident but do not elect to purchase the CDW. The Mass auto policy will value the car rental at actual cash value and the rental car company will want “full value” (not really sure what that means). On a car rental that is a couple of years old this could be a significant difference.

Indirect Loss: One last example to scare you into buying CDW, loss of rental income. If you damage a rental car and it takes 3 weeks to repair the vehicle most rental car companies will make you pay for this loss of income. The Mass auto policy will not cover it and most major credit cards will not cover it as well. 

Always read your rental agreement. There are many traps and pitfalls in their agreements. So what is your best protection? Don’t get into an accident and always read what you are signing.

(The information above is not intended as legal advice or legal opinion and should not be relied upon as such. The intent of this information is to provide a general background regarding the information discussed here).

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