Am I covered for this?
By Jerry Barron – Owner, Barron Insurance
It’s Memorial weekend and the family is thrilled to be going to Florida to celebrate the start of summer. You have your airline tickets, car rental is all lined up, the hotel and theme park reservations are made..time to get out of here! You arrive at the airport in Orlando and rush to get your rental car. The clerk behind the counter turns the rental car contract around so you can read it, initial it, and sign it so you can be on your way to Florida fun!
The clerk asks if you would like to purchase collision waiver for $20 per day so you don’t have to worry about being responsible for any scratches, dings, or accidents while renting their car. Your memory goes back 20 years ago when you rented a car and you asked your insurance agent if you need to take out this waiver thing..and you remember them telling you it was not necessary because your full coverage you currently carry follows the rental vehicle so you are all set..so you think.
Two days later you go to leave for Universal Studio’s and you notice a hit and run driver has backed into the front of your car which damages the radiator and causes 6,000 in damage. The car will be out of commission for 30 days. You report the damage to your insurance agency and they pay the full amount minus your $500 deductible. That was easy..right? Well in less than 60 days you receive a bill from the rental car company for $4,500! The first $1,500 is for LOSS OF USE (because the rental car company could not rent that vehicle for 30 days and lost $50 per day in rental fees) and the next $3,000 is for DIMINISHED VALUE (the rental car company was supposed to get $25,000 from Ford when they turned that 2017 Ford Taurus SHO back in on June 1st and because of the damage the value if that car went down $3,000). What!! This is crazy..AM I COVERED FOR THIS?
Unfortunately, you probably are not. Some insurance companies include LOSS OF USE into their auto policies but almost all companies exclude DIMINISHED VALUE. You can endorse your auto policy to cover these 2 gaps but what is the rental car company going to change in their rental agreements next that will not be covered? The best solution to this problem is to purchase collision waiver and pay the extra daily fee. Not only will it cover the above 2 scenarios above but any other gaps as well. You will not have a deductible to pay AND it will keep a claim off your insurance record.
Times change. Rental agreements change. What you were told 20 years ago has changed. You need to contact your insurance agent today to find out what coverage you do or more importantly DO NOT HAVE. Enjoy your summer!