For frequent flyers- rent-a-car questions

Factual Questions
1

A business associate and I are travelling from Ohio to Orlando, FL in about three weeks on business. Most of my limited business travel is within a few hours so I usually drive my personal vehicle, and for the occasional way-out-of-state conferences, we just stay at the same motel (or within walking distance of) where the conference is being held.

In this case, I have a friend in Orlando we are staying with, and since we’re saving so much on the hotel, we were authorized to get a rental car. The question I have relates to insurance. The rental company’s insurance is of course stupid expensive. I only have liability at home in Ohio, but my associate has full coverage.

Florida is a no fault (or partial fault?) state, and thus requires PIP, personal injury protection insurance. My agent is telling me that since the driver is insured, not the car, your policy carries with you from state to state, and “automatically conforms” to each state’s requirements (not that PIP is automatically added, but moreso that if I’m legally covered at home, I’m legally covered to drive in Florida too). I have a local agent, but policy is through Progressive.

My associate, who -also- has Progressive, and has full coverage, is being told by his agent that he has to add PIP to his policy to drive that rental car legally. This makes no sense to me. If I drove to Florida, they wouldn’t stop me at state line and force me to buy PIP or turn back.

I know from the stories here that there are many posters who travel/fly/rent frequently… so does anyone have any experience with this? Or people who work in insurance? Any feedback is appreciated! (BTW, my company does not have fleet insurance or anything like that where its policy would cover us and make this all moot).

2

I suspect that your policy will conform to Florida’s laws. You could read your policy to be sure.
However this scares me

If you are driving the car, and it is damaged, you the driver will be on the hook for the amount of damage to the rental car. Since the car is rented to you, not your company, an accident could wind up as a big mess.
In this case I strongly urge you you to buy the physical damage coverage to the car. Often this is called LDW or loss damage waiver.

3

Check with your credit card issuer. My credit card covers me if I use it to rent the car. I have to pay the bill using the credit card, as well as book the reservation with it.

Also, my liability insurance covers me in any car I drive. It also covers my damaging a car belonging to someone else, regardless of how I damage it. So, if I borrow or rent a car and wreck it, my liability coverage will take care of it. And then stick me with a wonderful rate increase.

4

You are correct about the credit card coverage, but the rental car company will want a check when you return the wreck. They will not deal with the credit card company.
I would want to see a cite that a car you rented would be covered for physical damage by your liability coverage.
Speaking as a guy that was, at one time, licensed to sell insurance this does not smell right to me.

5

Thanks for the feedback! I’ll check with Visa, good tip.

BTW, we intend to have him be the sole driver since he has full coverage, I merely mentioned my liability-only because my agent said even at that I could -legally- drive the rental car, I’d just be screwed (out-of-pocket) if I damaged it.

6

I would double check with your company for a recommendation. My company has a standing policy: do not purchase insurance on rental cars.

Now, we don’t have a fleet, but we do have insurance to cover all sorts of business related travel issues.

7

I regularly use my Visas card for hiring cars and use the Collision Damage waiver (aka Loss Damage Waiver)
Just be aware that the Visa CDW does not cover expensive cars and pick up trucks, as I just found to my loss when I had a minor ding exiting the hire company car park.

8

Plus, many companies have contracts with rental car agencies which cover insurance, and specifically forbid you to purchase it. But I’ve only worked for relatively large companies.

9

I used to think the don’t-take-the-insurance-policy was related to us owning the rental company, but we still have the policy even though we no longer own them.

When I rent a car in Mexico and refuse coverage, they always insist that they have to hold the value of the car on my credit card, which seems like a strong arm tactic to me. Luckily my company credit card lets the hold go right on through.

10

I’ve rented a car in Florida with out of state insurance (California), had the car stolen and completely damaged, and was not asked for a check when I left. The rental car company dealt with my home insurance and they paid the claim.

The rental car company may *like *you to write them a check for the value of the car before you step on the plane back to Ohio, but they’re not going to hold you at gunpoint to do so.

I’d go with what your agent is telling you. They’ve answered that question for their policyholders a million times.

11

I rented a car this evening and LDW (which I declined) was $15 a day. Paying the equivalent of $5,475 a year to insure against damage to a car that costs less than $20k brand new is one of the biggest rip-offs out there.

12

You might want to go back and read the OP. The OP has liability only coverage. Assuming that the OP does not have coverage from his company or or credit card, if the rental car is damaged, the OP is on the hook for the entire amount.
While I am not in this situation (I have full coverage on my auto insurance), if I were I would much rather write a check for an additional $15 to my credit card company than a check for several thousand dollars to a car rental company.
Before you tell me I am nuts you might want to consider that you have a driver in a strange car with some controls in different places, driving in an unfamiliar area. I have to believe that the chance of an accident is slightly higher than it would be at home. Also the renter is on the hook if someone hits it in a parking lot and doesn’t leave a note.

13

I was perfectly aware of that, which is why I quoted the likely value of the car. LDW is a rip-off, plain and simple. It is more than five times what even my teenage son has to pay for that compenent of his insurance.

Mind you, it does sound as if pantheon’s company is paying for the car, in which case it might make sense to have them pay for LDW rather than risk $20k of his/her own money on company business.

14

When I rent a car on my own dime, and it’s only for a single night, I almost always go for the LDW. It’s cheap enough (for a single night) that I prefer to be out the extra cash than have to worry about the hassle of dealing with insurance and credit card coverage. For anything longer term, though, the total added cost of LDW is certainly high enough that I’m willing to risk dealing with my credit card company and/or insurance company.

15

I don’t have an online cite. All I can tell you right now is that I asked my agent about it. He said that my liability coverage covers me when I damage a car that does not belong to me. It doesn’t matter in what capacity I am acting when the car is damaged. Typically, I would be driving my own car and bash into someone else’s car. However, if I have borrowed or rented a car and bashed it into something, the car I am driving doesn’t belong to me and therefore falls under liability coverage.

Remember, though, that you probably have a limit of liability. In my case, I believe it is $15,000 per person and $25,000 total per accident. So, if my liability covers both the car I am driving and the car I hit, it doesn’t take long to hit that $25,000 limit.

16

Now I know you are mixed up. The 15,000 per person / 25,000 per accident limit is for bodily injury not property damage. If you go back and read your declarations page it probably lists your coverage like this 15/25/5 or 15000/25000/5000 in any event that last number (5,000) represents the amount that your company will pay for property damage. In this case (15/25/5) the absolute most your company would pay is 30,000 (25,000 + 5,000)
I am fairly sure you are misremembering, or misunderstood your agent.

17

I am probably misremembering. I will look at the policy, just to clarify it for myself if nothing else.

What about the liability coverage of borrowed or rented cars? I know you’re not my agent, etc., but you mentioned that it didn’t sound right to you. What does sound right?

18

Ok real world examples of coverage in my state.

Most policies will follow you in a non owned car, so if you have liability it follows, if you have “full coverage” it also follows, but with the same deductible and other limitations. So if you’re deductible is $1000 its $1000 on the rental car also.

The credit card policies I see cover the deductible or the amount of the gap between your coverage and the loss. This varies from card to card. For example if you have a wreck with the $1000 deductible the card covers the $1000 and then your policy picks up.

Auto insurance contracts conform to the state minimum limits as you pass thru that state.

If it is a legal requirement to carry say PIP or 100/300/100 limits of liabity in a state then your policy will conform even thought you don’t really have that coverage.
Now for the anecdotal story.

One of my insureds rents a car. He calls and I tell him how his coverage extends, and that one of the key exclusions is for loss of use to the rental company, that being if the car is out of service for two weeks they want the lost profit.

Now my insured had “full coverage” with me and purchased all the insurance the rental agency offered and then went on his way.

Insured was out drinking and thought the responsible thing to do was let his sober associate drive him to the hotel.

Sober associate totals car.

My insured wants to use one of the three insurance policies to pay for the $25,000 car.

None did.

My insurance would not pay as I had no policy on the driver. He was not my insured.

The rental company would not pay as they did not have the sober driver listed as a driver on the car or policy.

The sober driver’s policy would not pay because he had liability only on his car at home.

3 policies no coverage and my insured was sued for the value of the car and had to make restitution.

Be careful what you are told; only believe what you read in the policy form.

19

I suspect that you will find that there is an exclusion under the liability portion of your policy that excludes coverage on cars that you are renting. Otherwise your insurance company would be providing physical damage coverage to a car that they might not be collecting premium on. (assuming that you had only liability coverage on your personal car)

20

Now, I’m confused. I have full coverage on my vehicle. What if I loan it to my neighbor to pick up something at Home Depot. He totals it in an accident that is 100% his fault.

Does his car insurance pay?
Does mine?

What if he doesn’t even own a car, therefore doesn’t have car insurance? I thought the vehicles were covered, not the drivers…