Planning to rent a private passenger car for your summer vacation? Auto insurance for car rentals remains an area of uncertainty for many drivers, due in part to the aggressive sales pitches used by many rental companies at the counter. Before renting a vehicle, understand your options and, most importantly, know what coverage you already have through your own policy.
First and foremost, know that if you are renting a private passenger vehicle in the United States, its territories or possessions, Puerto Rico or Canada the Collision and Other-Than-Collision coverage limits and deductibles under your NJM personal auto policy extend automatically. For example, if you have Collision coverage under your policy then you would have Collision coverage for the rental car. Similarly, your NJM personal auto policy Liability coverage extends to your rental vehicle and may provide either primary or excess insurance.
No coverage is provided under your NJM personal automobile policy for vehicles other than private passenger vehicles, and no coverage is provided for rentals outside of the United States, its territories or possessions, Puerto Rico or Canada.
As for those scary “what if” scenarios offered at the counter? There is a measure of truth in them, such as the loss-damage waiver that rental companies explain helps them recoup rental revenue if their vehicle is in the body shop. This waiver is not insurance; it is a release of your contractual agreement to return the vehicle undamaged. While this waiver comes with a high price – often more than the cost of the rental itself — the rental company is entirely within its rights to make this a condition of doing business with them. Most insurance policies, including those issued by NJM, do not cover a rental company’s “down time” and related administrative fees. In this case, the decision to purchase a loss-damage waiver comes down to your personal risk tolerance.
When in doubt, ask before you pay for coverage you don’t need (ideally before you get to a rental company counter). Call an NJM representative at 1-800-232-6600.