Don't buy rental car insurance - Unless you can't afford Loss of use

Hey guys, Mark W. Flockhart with Think Insurance. You may always wonder why I'm drinking coffee. It's because I'm always drinking coffee. I've been in the insurance industry for 11 years. I like coffee. I drink a lot of it. It hyped me up. I used to do energy drinks and yeah, it didn't go so well. So today we're going to talk about rental car insurance. So should you buy it? Should you not buy it? What are the benefits? What are the negatives? Personal opinion, I'll just be right up in front and tell you guys. I've never bought it. I never really saw the value for it. And I'm going to go into depth a little bit more on why that I don't think that it's important to a degree. There's actually some parts of it that make sense, but usually not. So we're going to hike up our sleeves. Let's just dive right into it. The reason I don't recommend, or I don't typically purchase or have clients purchase the renter's insurance, I always leave it up to them. So if you're an agent watching this, never decide their choices. You don't want to be liable for something that they chosen correctly, because you don't know all the situations, whether the rental car company has the right plans in place or whether their insurance even covers it. So here's the first thing you have to check. And this is the main reason I say, don't do it. Most companies will cover rental car insurance. What that means is all of the coverage that you have on your car today, your bodily injury, your property damage, your comprehensive, your collision, all of those coverages that are on your current policy are going to be covering any vehicle that you rent, not your friend's vehicle or anything like that. We're talking about renting a car. So there's some sort of exchange through a business that is a rental like Hertz or any of those car rental companies. That's the main reason is because you're already covered in most cases. What I would recommend, if you're not sure, pull up your declarations page. It's not going to disclaim it there, but in that huge packet of 50 pages, somewhere in there, it may disclose it. Save yourself the time. Call your agent, call the 1-800 number, go online and check your policy. Kind of Google it if you have to, because in most, I'm willing to bet that 9 out of 10 companies, if not 9.9 out of 10 companies, just include it. That's just part of life. They don't want you to have to do that extra purchase outside of their insurance. Now there is a really big negative because your policy doesn't cover everything in a rental car package. So we'll dig into that in just a second, but let's go back and kind of figure out the parts of a rental policy. So when you're renting a car, what they're doing is they're handing you a sheet of paper and saying, would you like the rental insurance for X amount of dollars a day? That covers you if you hit another car, that covers if you get hit, that covers this, this and this, and you choose the coverage that you want. Most cases, it's going to cover the physical damage because they're hoping that you're not injured. Depends on the state because sometimes the state already has medical for you, things like that. So they're typically making sure that the car itself has covered value and that's where that's going to kick in. So typically the rental agreement is usually about a million dollars worth of liability. So if something happens, somebody's injured, you're going to be able to purchase that. One of the benefits of buying it from the rental car company is most companies don't rate at fault or not at fault through a rental car company and it was in a commercial vehicle. Those don't typically follow you into your personal car insurance. So if you're the guy that likes to rent the car from the rental Hertz rental car and you like to drive fast and you get tickets in them, there's a good chance that your car insurance won't raise their rate because you're driving crazy in a rental car. Now they do kind of, it's kind of a gray area, so just be careful. You may want to talk to your insurance agent before you start going 95 miles an hour on the highway because you want to make sure that they won't raise it in that case. It's really up to your insurance carrier what they do in those situations. Going back to the losses, so if you have a loss, the one piece on your car insurance that isn't covered is loss of use. So that's kind of weird because if you have a homeowner's policy or like loss of use, that's for me if I lose, I can't use my house. Same thing, that's for them if they can't sell the car or rent the car. You have to pay that fee. So if that car is in an accident, will your car insurance cover it? Most likely, they'll pay the medical, they'll pay the property damage, they'll pay for the other guy's car that you hit, all of that stuff, whatever coverages you chose with your current insurance, they're going to have that, but they won't pay for the loss of use cost for the rental car company. That rental car company, if that car takes three months to get out of the shop, just because parts are backed up for some reason, you're going to get a bill for month two and month three and month one because they want you to pay that $10 a day that they're losing to rent that vehicle out. Now, if they have a lot of cars on the lot, they have to be ethical about it, but if they have 20 cars just sitting there waiting to be rented, they're not going to hand you a bill and say, well, because we can't rent this exact same one that there's 12 that are sitting not being used, but that's usually not the case. Most rental car companies are just quick. They buy enough cars, they drive one to one spot and they rent it from that spot to another spot and it eventually gets back to the right place, but they don't care. They're just moving them all around, just trying to make sure that they're renting and making profit on that. So next time the guy hands you the paper and says, do you want to buy it? They're going to give you their spiel on how that you might not be covered and it's usually scary. I honestly will tell you that I would fare to say almost everybody watching this video, check with your agent to be certain, but I almost promise you that you have that coverage inside of your policy currently. So next time they ask, I personally don't grab it. I'm willing to take the risk of paying the $10, $20, $30 a day if I damage the car. It is what it is. If it happens, it happens, but that's easier than me buying $10 to $20 a day of insurance just to pay for what might or might not happen. That's the risk you take. I'm Mark with Think Insurance. I will see you in the next one.