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Tuesday, 20 September 2011

Getting Insurance Coverage

All car rental agencies offer additional insurance per day when renting any vehicle. BUT, is it necessary? In some cases yes, and some no. Some of the more specialized car rental agencies who offer high end vehicles (BMW, Mercedes, Corvettes, Mustangs etc) make it mandatory to buy insurance to cover the cost of damage and liability. When you are speeding along at 120 KM/hr and you missed that turn and wrapped your vehicle around a lamp post AND killed that pedestrian in the crossfire, you want to make sure that you are covered for liability. They even make you initial on the contract that you took it, or waived the option.

 This being the case, the lawyer representing the deceased will sue everyone involved in the case. The driver, the car rental agency who rented the car to the driver and possibly even the City for placing the pole in the wrong place, or some such. The car rental agency, not necessarily being at fault, will need to be covered for liability purposes should the judge deem that the rental agency was somewhat responsible. SO SHOULD YOU, as you were the one directly responsible. The rental agency is not going pay for your lack of liability coverage, even though you "claimed" that you had  coverage through your own insurance agency, or your credit card company. In most cases, credit cards cover damage, but not liability. In other cases, some credit cards will cover liability up to $200,000 and the rest is left to you. The car rental company cannot afford to risk your lack of coverage when there is a victim involved. All rental agencies presume you will get into an accident.

When renting small cars and minis vans, insurance is not compulsory so long as you can prove you are covered by your own personal insurance.  So why is it even offered? See previous paragraph. LIABILITY. Some people have a basic car insurance plan, and liability may be limited to $500,000 or less. The lawyer of the victim is suing you for $2 million. Where's that money gonna come from if its not covered by insurance? Best case scenario, check your policy to see where you stand on this issue. If you are opting for your own insurance coverage, make sure you have; liability over $1,000,000, Collision, and Theft coverage on your policy.

Car rental agencies are just trying to protect their interests as well as yours. You may think you are a safe driver, but something as simple as lack of sleep, or a stressed out/ distracted mind can cause an accident. Do you really want to quibble over $25 per day to take that risk?

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