car rental liability warning

Old Jan 1, 20, 8:30 am
  #16  
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Originally Posted by swingaling View Post
Bottom line: the rental car company is always covered. But if youíre renting cars in the US, be certain you have a personal (or commercial) auto insurance policy that will cover you for your liability exposure because your credit card will NOT help.
This may be true for many/most US-issued cards, but certainly not for all. My German Amex has full liability coverage as well, for example.
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Old Jan 1, 20, 8:32 am
  #17  
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Originally Posted by swingaling View Post
Note: Iím not a lawyer, and the following is not legal advice.

Rental cars are always insured, whether or not the renter has their own coverage or buys/declines the cover from the rental agency. Rental car companies, as registered owners of the vehicles (and as a matter of prudent risk management) are compelled to insure their fleets for liability coverage at a bare minimum. They usually insure for physical damage as well.

The type of coverage they purchase is called contingent auto liability insurance, and it protects the owner of the vehicle (the rental car co) in the event that the renter has no insurance or insufficient insurance to pay for the damages they cause to others.

That said, these types of policies are typically in secondary position and can be triggered only when the driverís policy is insufficient. Further, contingent auto liability does NOT protect the interests of the driver at all. They have no duty to defend YOU in a suit; they only owe that duty to their insured, the rental car co. If found liable and uninsured, be prepared to hire a lawyer to protect your assets.

Rental car companies also carry policies for physical damage to and theft of their cars. This protects them from instances where a renterís policy lapses, is insufficient, etc. And it also protects their fleet vehicles from things like hail storms, thefts, and accidents that occur when the vehicles are not rented out. Deductibles can be high ($2.5k+ per car), which is why they mitigate that risk by selling CDW and putting holds on your credit card.

Bottom line: the rental car company is always covered. But if youíre renting cars in the US, be certain you have a personal (or commercial) auto insurance policy that will cover you for your liability exposure because your credit card will NOT help.

Many donít know this, but your personal auto policy will only extend to rented private passenger vehicles. So if you think it extends to a 16 passenger can or a U-Haul truck, think again.
There are States in US the coverage does NOT operate the way you describe.

Off the top of my head, NY and TX are among those states.
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Old Jan 1, 20, 10:30 am
  #18  
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These posts simply point to the importance of understanding what coverage you do have, what is required at your rental location, and what makes sense from your own financial perspective.

I carry a $2 Million umbrella policy which insures me above and beyond my auto liability coverage and costs me an additional $189/year (the umbrella also applies to many more things than auto).

Not only does the insurance policy cover the damages, but it provides for my legal defense. In an accident with substantial damages, the legal costs can go off the charts just as quickly as the medical costs and those are yours to pay in the US and many other countries, even if you ultimately are found not liable.
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Old Jan 1, 20, 10:33 am
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Originally Posted by Happy View Post
There are States in US the coverage does NOT operate the way you describe.

Off the top of my head, NY and TX are among those states.
Sure, there are some outliers, but it doesn't really change the calculus substantially. Most states (roughly 43) operate in the manner I describe.

As you mentioned, NY is one of seven states (plus D.C.) in which the rental car company's insurance is primary by statute. However that doesn't mean it's adequate. In NY, for example, they're required to insure their vehicles for only the minimum liability limits that apply to all vehicle owners ($25k/$50k for bodily injury and $10k for property damage). The renter is responsible for any accident exceeding those limits. Paltry limits like those don't go very far at all in NYC. A $10k limit for property damage is peanuts, and I absolutely wouldn't want to drive in NY with a $10k limit.
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Old Jan 1, 20, 12:06 pm
  #20  
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Originally Posted by ente_09 View Post
Used my American Express card to pay the minor excess charges on a car rental paid for by my auto insurance while my car is undergoing damage repair .
I always waive those car-rental insurances, but later discovered that American Express will not cover any liability, unless the card is used to pay for the rental in full.

Even worse, I was sent the American Express liability policy and it turns out that they DO NOT cover any personal injury or damage to property issues as part of their coverage. .

All these years I was at risk . Do the auto rental agencies have insurance, just for personal liability /property damage?
For people who do not own a car, but who rent cars, the options for third-party liability coverage are:

1. pay a daily fee to the rental company for $1 million or $2 million liability coverage;

2. obtain a non-owner auto-liability policy (mine is issued by Travelers Insurance); or

3. if one is a member of certain organizations, rent from a participating rental company with the organization's code to obtain a usually small amount of primary liability coverage. (At participating Avis/Budget locations in the U.S., AARP members renting with the AARP discount code get 25/50/10 primary coverage.)
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Old Jan 1, 20, 1:54 pm
  #21  
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Originally Posted by guv1976 View Post
For people who do not own a car, but who rent cars, the options for third-party liability coverage are:

1. pay a daily fee to the rental company for $1 million or $2 million liability coverage;

2. obtain a non-owner auto-liability policy (mine is issued by Travelers Insurance); or

3. if one is a member of certain organizations, rent from a participating rental company with the organization's code to obtain a usually small amount of primary liability coverage. (At participating Avis/Budget locations in the U.S., AARP members renting with the AARP discount code get 25/50/10 primary coverage.)
Or 4., have it bundled in with their credit card.
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Old Jan 1, 20, 2:09 pm
  #22  
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Originally Posted by Often1 View Post
People spend a lot of time worrying about whether they will have to cover a $500 deductible, but not a lot of time worrying about a $50,000 medical bill (or much, much, worse).

Before putting one's financial future on the line, it is only prudent to spend some time reviewing the coverage one has and what it means.
Indeed. Damage or destruction of the rental car might be a small or big problem. A bad accident involving major injuries for others might be a financial catastrophe. Only your own car insurance or umbrella policy, or the liabity coverage rental car companies offer will protect you from that.
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Old Jan 1, 20, 2:31 pm
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As to umbrella liability coverage, make sure you know what it covers too. Our car insurance does not cover rentals in Europe. I wasn't satisfied with the amount of the liability insurance provided with the cars we've rented in Europe. However, I thought any excess would be covered under our umbrella liability policy: I recently learned that it's not. I think our policy is pretty standard in that it only increases the amount of coverage for liability for which we are already covered under some other policy (generally home owner's and auto). It does not expand the scope of coverage.
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Old Jan 1, 20, 4:04 pm
  #24  
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Originally Posted by swingaling View Post
Sure, there are some outliers, but it doesn't really change the calculus substantially. Most states (roughly 43) operate in the manner I describe.

As you mentioned, NY is one of seven states (plus D.C.) in which the rental car company's insurance is primary by statute. However that doesn't mean it's adequate. In NY, for example, they're required to insure their vehicles for only the minimum liability limits that apply to all vehicle owners ($25k/$50k for bodily injury and $10k for property damage). The renter is responsible for any accident exceeding those limits. Paltry limits like those don't go very far at all in NYC. A $10k limit for property damage is peanuts, and I absolutely wouldn't want to drive in NY with a $10k limit.
Raising another matter for people to consider. The minimum requirements are generally relatively low vis-a-vis risk. $25/50K for liability is peanuts for a relatively modest injury with hospitalization and a loss of income for any appreciable period of time.
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Old Jan 1, 20, 4:19 pm
  #25  
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Originally Posted by LondonElite View Post
Or 4., have it bundled in with their credit card.
Alas, that is not an option for U.S.-issued credit cards, many of which offer coverage for damage to the rental car itself, but none of which offers third-party liability coverage.
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Old Jan 1, 20, 4:27 pm
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Originally Posted by GUWonder View Post
Yes, but there is the possibility -- uncommon as it would be -- of a car rental being an insurance rental for a person whose car insurance coverage has been terminated between the time of the incident giving rise to an insurance rental and the insurance rental itself.
Sure. This could happen. But again - the current insurance will provide coverage as it is a temporary replacement of the insured vehicle.

Originally Posted by GUWonder View Post
And it's possible than an insurance rental doesn't include liability coverage, whether or not it included CDW/LDW.
Insurance rental relies on the renter's own policy. So whatever the original policy covers, the same coverage applies to the rental.

Originally Posted by mia View Post
The current rental is, but I think ente_09 is making the broader points that American Express's bundled CDW coverage is void unless the entire cost of the rental is paid with the card -and- there is no Liability coverage. This isn't new information, but it may be new to some readers.
Entire cost or not, it is still void, as AMEX protection is secondary. OP's own insurance is primary.
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Old Jan 1, 20, 4:40 pm
  #27  
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Originally Posted by garykung View Post
Entire cost or not, it is still void, as AMEX protection is secondary. OP's own insurance is primary.
My understanding is that if the card is used to pay the full cost of the rental, secondary CDW would reimburse the primary policy's deductible. (I don't think this applies to an insurance rental. )
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Old Jan 1, 20, 4:47 pm
  #28  
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Originally Posted by swingaling View Post
Rental cars are always insured, whether or not the renter has their own coverage or buys/declines the cover from the rental agency. Rental car companies, as registered owners of the vehicles (and as a matter of prudent risk management) are compelled to insure their fleets for liability coverage at a bare minimum. They usually insure for physical damage as well.

The type of coverage they purchase is called contingent auto liability insurance, and it protects the owner of the vehicle (the rental car co) in the event that the renter has no insurance or insufficient insurance to pay for the damages they cause to others.

That said, these types of policies are typically in secondary position and can be triggered only when the driverís policy is insufficient. Further, contingent auto liability does NOT protect the interests of the driver at all. They have no duty to defend YOU in a suit; they only owe that duty to their insured, the rental car co. If found liable and uninsured, be prepared to hire a lawyer to protect your assets.
I suppose Thrifty Canada has insurance, but they make it sound like renter can enjoy none of it:

https://www.thriftycanada.ca/faqs/wh...-are-there/441

"Collision Damage Waiver (CDW) Optional Extra
Collision Damage Waiver reduces your liability to us if the vehicle is damaged (other than due to theft, attempted theft or vandalism) to an excess amount. Without CDW you are liable to pay the full cost for any damage incurred up to the value of the car. The CDW excess will be reduced to zero if you purchase SuperCover."
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Old Jan 1, 20, 7:28 pm
  #29  
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Originally Posted by guv1976 View Post
Alas, that is not an option for U.S.-issued credit cards, many of which offer coverage for damage to the rental car itself, but none of which offers third-party liability coverage.
Sure, but given that FT has a global audience, I thought it worth mentioning that, for very many people, car rental insurance may be included with their credit card agreement.
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Old Jan 2, 20, 10:04 am
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Originally Posted by Often1 View Post
These posts simply point to the importance of understanding what coverage you do have, what is required at your rental location, and what makes sense from your own financial perspective.

I carry a $2 Million umbrella policy which insures me above and beyond my auto liability coverage and costs me an additional $189/year (the umbrella also applies to many more things than auto).

Not only does the insurance policy cover the damages, but it provides for my legal defense. In an accident with substantial damages, the legal costs can go off the charts just as quickly as the medical costs and those are yours to pay in the US and many other countries, even if you ultimately are found not liable.
Could you share a bit more what policy, from who, that is? Thank you.
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