Does Your Auto Insurance Policy Pay For a Rental Car if Your Car Was in an Accident?

At Memorial Insurance Agency, serving the greater Houston, TX area, we are often asked whether an auto insurance policy pays for a rental car if your car was involved in an accident. There are many myths about this topic, which is why people get confused. Here is what you need to know about rental car coverage and your auto insurance policy. 

Do All Auto Insurance Policies Pay for Rental Cars?

No. Many people believe that their auto insurance company has to pay for a rental car if they were involved in a car accident and cannot use their car because it is being repaired. However, this is a myth. Your auto insurance company does not have to pay for a rental car. Unless the policy specifically says that rental car expenses are paid, you should assume your policy does not provide for a rental car in the event of an accident. 

How Can You Tell if Your Company Pays for a Rental Car?

If your policy provides for a rental car after a car accident, your policy will state that it is included. It will also typically state how many days the policy will pay for a rental car, such as five days or ten days, as well as the maximum amount that they will pay for a rental car. When renting a car, most policies will only cover a vehicle similar to yours, so you cannot upgrade to a larger car. 

Does your auto insurance policy provide for a rental car if you were in a car accident? If it does not, it may be time to get a new auto insurance policy. If you are in the greater Houston, TX area, Memorial Insurance Agency can help you find the right auto insurance policy for your needs. Contact us now to get started. 

Does Auto Insurance Cover Rental Cars?

The short answer is, of course, “it depends”. What are YOU covered for? Read our handy guide below:

1. Where are you renting? If you have full coverage (including comprehensive and collision) on your auto policy in Texas, and you are with a high-quality, reputable company like Safeco, Travelers, or Progressive, then insurance coverage will likely extend to your rental car anywhere in the United States. However, it’s a different story overseas. Countries such as Mexico have their own laws and requirements, so if you’re heading abroad you’ll almost certainly need to purchase additional insurance.

2. What kind of car are you renting? Own a small SUV in Houston, rent a small SUV in Utah … usually no problem with your rental being automatically covered under your auto policy. Normally drive a 2003 Toyota Corolla, but rent a Ferrari 488GTB to drag race down the strip in Vegas on your bachelor party weekend? You could have problems. Moral of the story: if in doubt, get the insurance offered by the rental company.

3. Have a good credit card? Sometimes – but not always – this can fill in any “gaps” in coverage that your personal auto policy cannot provide, including CDW (see below).

4. Live in a house? Your personal belongings are likely covered under your homeowners, renters, or condo policy – even while they are lying on the back seat of a rental car. Of course, everyone knows that leaving valuable items unattended in a vehicle is a bad idea, but you get the picture.

5. Don’t forget the CDW Collision Damage Waiver (also known as Loss Damage Waiver) is not an insurance product, but a waiver that means the rental car company – not you – is held responsible in the case of damage of theft. Among other things, the CDW will cover loss of use and diminished value to the rental car, which can add up to thousands in the event of a major accident and won’t be covered under your auto insurance.

6. Relax! Finally, when purchasing insurance with a rental car company, it is almost always both easier and cheaper to purchase it in advance … NOT at the rental car desk when you arrive tired and frazzled after a long flight!

Happy and safe travels from Memorial Insurance!

6 Things You Forgot to Insure!

Insuring your cat may help to keep those vet bills down, but what about the other things that people often overlook? Don’t forget to protect yourself against the following:

  1. Half of your car accident: Liability insurance will pay for damage to other people, their vehicles and property. But what about your own car? Omit comprehensive and collision coverage from your policy, and you’ll be paying the full cost of repairs by yourself.
  2. The bad decisions of others: 1 in 4 drivers is either driving around with no insurance at all, or has woefully inadequate limits. If one of these guys crashes into you, guess who could end up paying for the accident? That’s right: YOU. If injuries are involved, the bills could be astronomical. To avoid this nightmare scenario, be sure to add UM/UIM coverage to your auto policy.
  3. Your valuables: High-value items such as jewelry, art, or antiques need to be scheduled on your home insurance …. or can be put on their own policy. If you make a big purchase, don’t forget to protect it! Also, take a look at your policy every year to make sure you have enough coverage for any additions or upgrades to your home. As your home grows, so should your insurance.
  4. Flooding: No one in Houston should be without flood coverage, which is NOT included in your home insurance. If you aren’t in a designated flood zone, flood insurance offers high coverages and unlimited peace of mind for $450 a year or less.
  5. Extra liability: If you’re doing well in life, the sad fact is that you are at risk from people coming after everything you’ve got, especially if you’re at fault for a serious accident. Umbrella insurance is inexpensive and will give you up to $5 million in extra protection.
  6. Replacement cost: be sure your policy includes these two magic words, for both your home and your personal property. Some agents are sneaky and will give you Actual Cash Value coverage in order to reduce premium, and this means your insurance will pay you only a depreciated value for your home, roof, or contents. What is the actual cash value of a 10 year old roof? A lot less than it costs to replace it, for sure. And when you factor in the deductible as well, an ACV policy may give you almost no payout at all after that Category 4 hurricane hits Houston.

Any questions? Give your friendly agent at Memorial Insurance a call and we’ll be happy to help!

Umbrella vs. Excess Liability: do YOU know the difference?

Thanks to our friends at Safeco Insurance for their reminder about this crucial distinction!

The golden rule is: an Excess Liability policy provides additional coverage above your auto/home liability limits, BUT it only covers what is included in the underlying policy. In contrast, a true Umbrella is an OPEN PERILS policy – which means that if something is not specifically excluded, you’re covered.

Do you need examples of where an Umbrella could provide coverage, but an Excess Liability policy would not? How about these:

1) While on vacation, you rent a boat. Out on the water, you crash into another boat, severely injuring a water-skier being towed behind. Neither your home nor your auto policy would cover that …. but an umbrella would.

2) You write a blog post about a bad experience in a restaurant. The restaurant owner sues you for libel. Even if the lawsuit is thrown out of court, you still have to respond …. and that can be expensive. An umbrella would cover your costs.

3) You rent a car while overseas, but get involved in an accident which injures another driver. Your auto insurance all the way back home in Texas won’t cover his hospital bills …. but your umbrella will.

For more information about umbrella policies, or to find out whether your current policy is a true umbrella or merely an excess liability policy, give your friendly agent at Memorial Insurance a call!

Source: Safeco Umbrella vs Excess Liability