Car rental insurance can refer to a couple of different types of insurance in the state of Michigan and it applies to all US states. One is the car rental coverage which you purchase on your vehicle, and two is car rental insurance you place on a rental car. Both are completely different types of coverage and both can be a little confusing. Find out if you should purchase car rental insurance on your vehicle.
Rental Insurance for Your Car
Who should purchase rental coverage? Rental coverage on your vehicle can be very convenient if you are in a severe accident. You should purchase the coverage if one or more of the following situations apply to you.
- You only have one vehicle
- You have a small or non-existent emergency fund
While your vehicle is not drive-able or in the shop for repairs, a rental car will be partially or fully covered depending on the coverage you selected. Rental coverage is purchased by how much your carrier will payout per day up to 30 days. For example, 30/900, $30 a day up to $900. It can be frustrating being without a vehicle after an accident. That frustration can compound quickly especially when the the accident was not your fault.
Rental coverage for your vehicle is a convenience coverage. Lots of people can coordinate schedules or seek help from family to get access to a loaner car while theirs is not drive-able, but it is inconvenient. Having car rental coverage on your vehicle will make your claim simple and certainly more tolerable.
Avoid car rental coverage if one or more of the following apply.
- You have quick and easy access to an extra vehicle
- You have an emergency fund available to cover the costs of a rental
I have seen it time and again where a couple owns and insures three vehicles, yet they carry car rental on all three. Last time I checked, you can only drive one vehicle at a time. Rental coverage on three vehicles for a two driver family is a total waste of money. Please use common sense when purchasing this coverage.
Car rental coverage is only for when your vehicle has sustained a covered loss. It does not provide coverage if your car has maintenance problems and or mechanical failure. Yes, it would be nice, but it just doesn’t work like that. Car rental is only available if you have purchased both comprehensive and collision coverage.
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