A common question for drivers who are traveling is whether
they need to purchase additional car insurance for their rental cars.
Often, no additional car insurance coverage is necessary because your rental car is already covered by either your credit card or current insurance coverage. It is important, however, to verify that you are covered and to find out about any additional rental car insurance coverage that you might need.
Am I Already Covered?
Your regular auto insurance policy likely already covers you
if you are renting a car. If you live in a state that requires liability
insurance and you cause an accident while driving your rental car, liability insurance would cover the costs of damages to the other car and injuries to the other car’s driver and passengers.*This coverage also is likely to extend to additional drivers, although laws vary by state. In New York and California, for example, licensed spouses are covered to drive the rental car. You can also list additional drivers on the rental agreement, although companies may charge an extra daily fee.
*Be aware that your regular insurance policy may not be valid if you are renting a car for business use.
Does My Credit Card Cover Me?
Many credit cards offer some coverage for rental cars (if the card is used to pay for the rental). Be sure to check the fine print; the card may only offer collision coverage, which covers property damage but not costs associated with injuries. In many cases, the credit card company may offer additional rental
car insurance (e.g, to pay for injuries) for a fee.The rates may be reasonable, but be sure that you do not pay extra for coverage that you already have from another source.
If your health insurance, for example, covers any injuries that you sustain in an auto accident, you would not need to purchase personal accident insurance for your rental from your credit card company. You may, however, need to purchase supplemental liability insurance to cover damages to another driver if you cause the accident (if your existing liability coverage doesn’t include rental cars). Before you rent a car, call your credit card company to find out exactly what is covered.
Be sure to call each time you are about to rent a car to make sure that your coverage has not changed, since credit card auto insurance policies tend to change frequently. Also, verify that the coverage limit is high enough to adequately protect you. Make sure you fully understand your coverage, so that you are not coerced into buying insurance you don’t need at the rental car office.
What Options Are Offered by Rental Car Companies?
Rental car companies tend to offer these optional types of rental car insurance coverage that you can purchase when you pick up your car. Keep in mind that you may already have these kinds of coverage from your car insurance, health insurance, or credit card company.
Collision damage waiver – When you’ve purchased this waiver, the rental car company will not charge you for a damaged or stolen vehicle.
Supplemental liability protection – Electing this insurance will ensure you’re covered for costs to others in an accident you cause in the rental.
Personal accident insurance – This coverage will pay for injuries or death of the driver and passengers of your rental car.
Personal effects coverage – This coverage reimburses you for stolen personal items while renting the car.
Does Rental Reimbursement Coverage Pay for Damages in a Rental?Rental reimbursement coverage is entirely different from rental insurance. Rental reimbursement refers to a type of car insurance that is optional. This coverage allows for reimbursement for the cost of renting a car only when your own car is
in the shop due to damage from accident. Rental reimbursement coverage does not pay for damages resulting from an accident in a rental car
When you are driving a rental car and you are in an accident, liability insurance can cover the costs of repairs to the car and property, and medical bills for injuries to the other cars’ occupants, with collision coverage paying for the cost of damages to the rental car. However, you need to ensure your current liability and collision coverages apply to rental cars. If they don’t, your next step should be to check to see what your credit card covers (see below).
What Should I Do Before Renting a Car?
Step 1: Contact your car insurance company to make sure you understand your policy and what is covered when you rent a car.
Step 2: Contact your credit card company find out what coverage it provides.
Step 3: Finally, bring your car insurance declaration page so you can present it to the rental company if any questions come up when you pick up your car.
How Much Home Insurance Coverage You Need to Buy
To some degree, you don't have a choice about how much home insurance coverage to purchase. There are two parties who can determine that: your mortgage lender and your insurance company.
Lenders will ask you to carry home insurance coverage as security for their investment. Your mortgage requires home insurance coverage pay for at least 80% of your home's value, or up to 100% of the amount of the mortgage. You will need to buy home insurance to cover the lender’s requirements.
TIP: The destruction of your home does not release you from a mortgage! You may as well get the home insurance coverage you need to replace your home so you can still live on property you pay mortgage for.
The insurance company wants the home insurance coverage to reflect the home’s full replacement cost because they absorb the risk of loss and want your home insurance premiums to pay for the value that is at stake. As a result, most homeowners insurance contracts include a clause that says if the home is insured for less than 80% of the replacement cost, the policyholder will be penalized with a reduced payment for the covered loss.
Example of Reduced Payment: Consider a homeowner who has an older home that is insured for $60,000. Due to appreciation, the home is now actually worth $100,000 -- which means the insurance company would today require the homeowner to carry at least $80,000 of homeowners insurance coverage.
Since the homeowner carried only $60,000 (60% of the home value), the insurance company may only provide 60% of the loss. So a home insurance claim for $20,000 may result in payment of only $12,000.
Your insurance needs will obviously depend in part on the type of business you operate. However, all business owners should consider at least three types of insurance.
One, you may need business property insurance to cover your assets against various losses that result from natural and man-made causes. Check the policy to determine what assets and events it covers, and purchase riders for any additional coverage you feel is necessary. You may want to cover any building you own and its contents (e.g., furniture, office equipment, inventory, and supplies). If you lease space, you may still want to purchase property insurance; your landlord's building insurance will not cover your business possessions. If you run your business from your home, you should consider purchasing separate business property insurance. In most cases, your homeowners policy does not cover the use of your home for business purposes.
Two, you may also need liability coverage to protect against lawsuits that could arise if the services or products you provide injure or harm your customers or their property. Liability insurance pays the cost of these damages, as well as attorney fees and costs. A similar type of protection for professionals is called Errors & Omissions insurance.
Three, if you have employees, your state may require you to purchase workers' compensation insurance. This insurance covers medical expenses and at least a portion of lost wages for employees injured or taken ill as a result of their employment.
Your state's laws determine the maximum number of workers you may employ to be excluded from mandatory coverage, and the types of employees (e.g., independent contractors) that you may exclude from coverage.
Generally your child's personal property while at a college dorm is covered up to a certain limit from extension coverage from your homeowners policy. Although, if they are renting an apartment a renters policy will offer the best coverage for personal property, liability, guest medical and loss of use.