Rental car insurance

Please note: Rental Car Insurance (MA-specific information; please contact us for information on other states).

Our agency gets many inquiries from clients who want to know what, if anything, their insurance covers when they rent a car on vacation, business, etc. It seems like a simple question, but (like everything with insurance) there are a number of different considerations that make the answer a little more complicated than a simple "yes" or "no".

The good news is that the Massachusetts personal auto policy "follows" YOU and HOUSEHOLD MEMBERS when renting or borrowing private passenger autos on vacation. The policy stipulates that the rented or borrowed vehicle must be a "replacement" vehicle, which means that the vehicle from which coverage is being temporarily transferred must not be in use at the same time as the rented or borrowed vehicle. Obviously, only the coverages that you have on your Massachusetts personal auto policy would transfer - if you don't have optional bodily injury, collision, comprehensive, etc. coverage on your own car then your policy would not provide those coverages on a rental car, so be sure to be familiar with your policy before renting a vehicle.  

The Massachusetts personal auto policy is also very clear about the fact that it will only provide coverage to other private passenger autos while being used by you or a household member with the consent of the owner, which in the case of a rental car would be the company from whom you rent the vehicle. Rental contracts list specific violations that void the contract and could cause you to "lose consent of the owner".

A few other items in the Massachusetts personal auto policy to consider when renting a car:

• All policy coverages have a "regular use" exclusion. If you rent a vehicle for too long a period of time - usually 30 days - the policy will exclude coverage
• Collision and comprehensive coverage pay on an Actual Cash Value (ACV) basis. Some rental contracts require replacement value, fair rental value, or "manufacturers buyback program value".
• Rental contracts require additional values such as loss of use, administrative charges, diminishment in value, towing, and storage charges should the vehicle be damaged.

Another important consideration is whether your Massachusetts personal auto policy will cover loss of use (downtime) charged to you by the rental car company for the rental income they are unable to collect while a vehicle you damaged is being repaired. It's a claim that would have to be addressed on a case-by-case basis, since the Massachusetts auto policy does not specifically include or exclude loss of use coverage.

Finally, there are some other issues that should be considered when renting a car. There may be specific situations that void the rental contract. For example, many rental car companies do not permit drivers under age 25 to drive a rented vehicle. Also, be sure to research any coverages available through your credit card(s). Many cards automatically provide some rental car coverage, so it may not be necessary to buy additional coverage through the rental car company.

The best advise for these and many other specific questions is to READ THE RENTAL CONTRACT!

Would you like more information on rental car insurance, a quotation or an Insurance Tune-up on your existing auto insurance? There's no obligation, and if you have any questions, please contact us at info@ellisinsurance.com. Click here for more contact information.