Car insurance... do you include car rental?

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jendoe
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Car insurance... do you include car rental?

Post by jendoe »

I'm sorry if I'm not wording this right... but when you buy your auto insurance, do you purchase the extra insurance that pays for a rental car if you're in an accident?

I haven't in the past... I figured, I can pay for a rental car, I'll just save the money. But now I'm reconsidering, so I'm curious to see how other Bogleheads have thought through this one.

Here's the situation: I was recently involved in a hit-and-run accident. My insurance is covering it as "uninsured motorist", which is helpful (lower deductible, and UM includes the rental car, even though I don't carry the rental car insurance.)

Having the insurance cover the rental car has had 2 benefits for me:
1. Cost. Entreprise was quoting me ~$39/d. When they called and set up the rental through my ins. co. (and we mistakenly thought I'd still be paying), it was reduced to ~$25/day! (Of course, now that insurance is paying for it, I don't have to worry about the cost.)

2. The initial appraisal estimated ~3 days to repair the car (the damage is pretty minor looking). I dropped my car off a repair shop monday, and as far as I know they are still arguing about supplemental damages with the insurance company (today is Friday). So, afaik - no work has actually been done yet. :annoyed I don't know how much repair work gets done on the weekends, assuming not much... it could be well into next week before my car is actually fixed. So, while I had planned for ~4 days or so of a rental car... it may end up being closer to 10 or more!

The "cons" to me are that I'm a pretty safe driver (and don't put many miles on the car). This is my 2nd accident in 10 years with this car, but neither was my fault (in the first I was rear ended and the other guy's insurance paid for everything).

Even if I assume that I'll have an accident once every 10 years where I need to pay for a rental car out of pocket... that would be ~$440 paid in premiums. At $39/day, that's $390 for 10 days in the shop (though I guess it could be more days, depending on the damage). However, I learned this time around that since it's an accident, my insurance can set it up with their rates - even if I'm paying. That means for 10 days, it would be $250, which implies that I'm still better off just paying out of pocket.

What do you guys do? I'm leaning towards paying for the extra insurance because I find the whole car rental thing a bit stressful.

Thanks!
gvsucavie03
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Re: Car insurance... do you include car rental?

Post by gvsucavie03 »

No. I keep that money in my own pocket and self-insure with emergency funds.
Jack FFR1846
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Re: Car insurance... do you include car rental?

Post by Jack FFR1846 »

No

But I own other cars. When my jeep was totaled this winter, I drove something else. Bought a new one end of may
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armeliusc
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Re: Car insurance... do you include car rental?

Post by armeliusc »

No, I don't include car rental coverage. For me that's an over-insurance, as I can pay it myself if I really have to (self-insured). Plus now that there's another car (DW's), if one of the cars needs to be in the shop for a while we pretty sure can figure out a way to manage. Fortunately we haven't had this issue so far.
Topic Author
jendoe
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Re: Car insurance... do you include car rental?

Post by jendoe »

Interesting... thank you! I hadn't thought about the fact that most people are in a relationship and thus have access to a 2nd car, or at least a reliable ride. Thanks...
livesoft
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Re: Car insurance... do you include car rental?

Post by livesoft »

No, because I have access to a bike and another car.
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Drain
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Re: Car insurance... do you include car rental?

Post by Drain »

The UM coverage gave you the rental for free and for--effectively, anyway--as long as you needed it. Check the terms on what you'd get with the rental coverage you're considering. I predict they will not be as good.
Darin
Hypersion
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Re: Car insurance... do you include car rental?

Post by Hypersion »

No in this day and age you can just use Kayak or priceline and it's easy to get a good deal on a rental.
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GerryL
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Re: Car insurance... do you include car rental?

Post by GerryL »

I do not pay extra for the rental coverage while my car is out of commission. It did come back to bite me once, but not so badly that it would have been worth paying the extra premium for years and years, probably.

In less than 3 months I was rear-ended 3 times. No sooner was the first damage fixed -- on the other driver's insurance -- than I was hit again. Damage from the second accident was not as bad, but driver was uninsured. ("I thought I was covered by my ex-husband's insurance.") I was scheduled to take the car in for repairs from the 2nd accident when BAMM!, I was rear-ended again. ("I didn't realize there was a stop sign there." So who cares? There was a car stopped in front of you!) This time the damage was much worse. Car was almost undriveable. Because I was still getting repairs done on the 2nd, uninsured-driver accident, the insurance company of the 3rd driver refused to pay for the rental car needed while the car was in the shop.
Ron Ronnerson
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Re: Car insurance... do you include car rental?

Post by Ron Ronnerson »

No, I self insure for small out-of-pocket items such as auto rental, furniture, and electronics. I'd just use emergency funds if needed.
Austintatious
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Re: Car insurance... do you include car rental?

Post by Austintatious »

I've done it both ways. If you cannot do without wheels, pay for the rental coverage. The cost of the coverage is typically quite small and is well worth it, as you've already learned.
Calm Man
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Re: Car insurance... do you include car rental?

Post by Calm Man »

I don't think it's worth it. I had 5 days of a rental a year or two ago. I had another this year. That's 6 days in 43 years. I saved premiums in 41 years entirely, probably broke even for the 1 day this year, and lost a bit for the 5 day rental. If the cost of a rental car for say a month would break you, then maybe you need the insurance, or maybe you can't afford the car !!!!
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Toons
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Re: Car insurance... do you include car rental?

Post by Toons »

I have always excluded car rental :happy
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lululu
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Re: Car insurance... do you include car rental?

Post by lululu »

GerryL wrote: In less than 3 months I was rear-ended 3 times.
I think there's some contagion factor. If I'm in an accident (all fender benders so far thank goodness) the odds are fairly high I will be in another one within a few months. Then not for ten or fifteen years.
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interplanetjanet
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Re: Car insurance... do you include car rental?

Post by interplanetjanet »

jendoe wrote:1. Cost. Entreprise was quoting me ~$39/d. When they called and set up the rental through my ins. co. (and we mistakenly thought I'd still be paying), it was reduced to ~$25/day! (Of course, now that insurance is paying for it, I don't have to worry about the cost.)
If you are in an accident again, you may want to ask the body shop that you use about getting a good rental rate. The one I used last time gave me a discount at a local car rental place, with no insurance coverage involved. The numbers were even the same, $39/day before discount, $25/day after.

I don't carry rental car insurance, but we have 2 adults/2 cars in the household and can manage with just one car for months if necessary.
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GerryL
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Re: Car insurance... do you include car rental?

Post by GerryL »

lululu wrote:
GerryL wrote: In less than 3 months I was rear-ended 3 times.
I think there's some contagion factor. If I'm in an accident (all fender benders so far thank goodness) the odds are fairly high I will be in another one within a few months. Then not for ten or fifteen years.
My tradition is to get rear-ended before the car is 2 years old. I've had 3 cars and it has happened each time before the 2-year mark. Each time stopped at a light or stop sign. You can understand why I keep my cars for a long time. :happy
russellh
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Re: Car insurance... do you include car rental?

Post by russellh »

Yes. When my car was declared a total loss after being rear-ended on the freeway, I discovered that I did NOT have rental car coverage. It costs about $17/year to add it to your policy. It is a no-brainer.
tim1999
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Re: Car insurance... do you include car rental?

Post by tim1999 »

No, I passed on that coverage since I own several cars.
IowaFarmBoy
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Re: Car insurance... do you include car rental?

Post by IowaFarmBoy »

Drain wrote:The UM coverage gave you the rental for free and for--effectively, anyway--as long as you needed it. Check the terms on what you'd get with the rental coverage you're considering. I predict they will not be as good.
I think this is partially true. My understanding is that rental is intended to cover for situations where you are at fault. If someone else is at fault, you "should" be able to collect from their liablity coverage or from your own uninsured/underinsured if they don't have insurance. So if you are at fault, you need the rental coverage to have a rental paid for. UM won't cover if you are at fault. I've had a couple of claims where the other driver was at fault but didn't get a rental because I wasn't totally confident that their insurance (or my UM) would cover it and because we could get by ok without the rental. If I had needed the vehicle, I probably would have pursued it more aggressively.

One benefit for carrying rental and collision coverage is that if you are in an accident (regardless of who is at fault), you can get your car repaired and get a rental by filing with your company. If the other driver is at fault, your company will subrogate against their company (or against the driver if uninsured). You won't have to wait on their company to act or determine if they are uninsured, your company will handle everything. I had some delays on an accident while we worked through figuring out that the other driver really wasn't insured. The insurance info she gave to the police at the time of the accident was fraudulent.

Because we have multiple cars, I don't carry it.
IlliniDave
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Re: Car insurance... do you include car rental?

Post by IlliniDave »

Mine seems to include it as part of the UM (I only carry liability/UM as required by law). But I'll have to check with them to see if I can drop it. I only have a single vehicle and live alone.

An interesting, somewhat off-topic anecdote. I once had my car in for a repair that required it stay overnight. The service place (Mitsubishi) offered to provide me a rental for a day free of charge from a rental place that was part of the same group of dealerships. But the rental place would not allow me to rent because I only had liability, and no collision/comprehensive on my own vehicle. So we switched over Enterprise and it was no big deal in the end (I could "buy" the optional insurance coverage there). But on my list of things to discuss with my agent is the possibility of having my insurance policy be for just liability/UM on my own vehicle, but be "full" should I rent a vehicle, in the event the national rental companies begin to follow suit in shucking the option to allow renters to purchase insurance. Seems like it would be an easy way for them to generate a nice profit (by offering the coverage at a premium), but who knows.
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IowaFarmBoy
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Re: Car insurance... do you include car rental?

Post by IowaFarmBoy »

I also probably should have mentioned that the laws for uninsured/uninsured vary greatly by state so the situation could be very different depending on where you live.
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Drain
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Re: Car insurance... do you include car rental?

Post by Drain »

lrisius wrote:
Drain wrote:The UM coverage gave you the rental for free and for--effectively, anyway--as long as you needed it. Check the terms on what you'd get with the rental coverage you're considering. I predict they will not be as good.
I think this is partially true.
Which part? I don't think you're contradicting me.
My understanding is that rental is intended to cover for situations where you are at fault. If someone else is at fault, you "should" be able to collect from their liablity coverage or from your own uninsured/underinsured if they don't have insurance. So if you are at fault, you need the rental coverage to have a rental paid for. UM won't cover if you are at fault. I've had a couple of claims where the other driver was at fault but didn't get a rental because I wasn't totally confident that their insurance (or my UM) would cover it and because we could get by ok without the rental. If I had needed the vehicle, I probably would have pursued it more aggressively.
I looked into rental coverage with my previous insurer (USAA). I don't recall every detail, but the maximum benefit was something like $30/day for 30 days. Under some circumstances, the benefit was reduced to $15/day, and under others (as described by you, for example), there was no benefit. I also don't recall the premium, but it wasn't negligible...I dunno, let's say it was $20 or $30 per six months. Maybe that's an overestimate, but it wasn't $5. Anyway, for a maximum benefit of $900, with a more likely amount being a couple hundred dollars or less, I didn't see the point.

Are the terms of USAA's rental coverage worse than the typical? If not, then I don't see the point. If and when the coverage kicks in, you'll receive no more than $210 a week. Is that worth paying a premium for, given that the premium is set so that the insurer's expectation is positive?
Darin
IowaFarmBoy
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Re: Car insurance... do you include car rental?

Post by IowaFarmBoy »

Drain wrote: Which part? I don't think you're contradicting me.
OK, I see your point about UM giving better benefits in this situation. The OP's question was whether it was worth carrying rental insurance. I interpreted your response (perhaps incorrectly) as saying that you don't need to carry rental insurance because UM will cover it for free (as it did in this situation.) I wanted to clarify that there are a lot of situations where UM wouldn't cover it. My point is that UM only covers it in situations where the other driver is at fault and doesn't have insurance. If you are at fault, UM doesn't provide rental coverage. If the other driver has liability coverage and is at fault, their liability should coverage. I understand your point about the amounts but that only kicks in if you have coverage.

The laws about UM vary greatly from state to state so YMMV depending on what state you are in.
crg11
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Re: Car insurance... do you include car rental?

Post by crg11 »

The car rental coverage in my insurance is $142 a year ($50/day for 30 days) for the two cars my wife and I own. I decided long ago (before I started to seriously build an emergency fund) it was worth it for a couple of reasons:
  • Living in climate with a rough winter (New Hampshire), the odds of an accident happening are definitely higher despite our best precautions (snow tires, careful driving, etc). Can't control the others on the road!
  • If an accident happens in the winter (which has happened twice to me in 10 years), it can take well at least a month to get your car back from the repair shop as they are absolutely swamped with repairs.
  • If I were to use the full $50/day, that $142 a year pays for itself in just under 3 days of a rental. 5 years of payments (given my 2 accidents in 10 years record) covers about half a month of the rental.
  • If I were to find a rental for $20/day, I can stretch that rental payback out to a week for the year of coverage (or 5 years of payments = 1 month of coverage).
In the end, I decided it was just less hassle to include this coverage. It's one less thing to save up for and not have to worry about my (currently) meager emergency fund covering.
madbrain
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Re: Car insurance... do you include car rental?

Post by madbrain »

crg11 wrote:The car rental coverage in my insurance is $142 a year ($50/day for 30 days) for the two cars my wife and I own. I decided long ago (before I started to seriously build an emergency fund) it was worth it for a couple of reasons:
Do you really need $50/day for rental coverage ?
Usually, the insurance companies negotiate better prices for rental cars than you can do on your own.
I have this coverage at $30/day for up to 30 days and it costs a total of $48/year for our 2 cars.
cherijoh
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Re: Car insurance... do you include car rental?

Post by cherijoh »

lrisius wrote:
Drain wrote:The UM coverage gave you the rental for free and for--effectively, anyway--as long as you needed it. Check the terms on what you'd get with the rental coverage you're considering. I predict they will not be as good.
I think this is partially true. My understanding is that rental is intended to cover for situations where you are at fault. If someone else is at fault, you "should" be able to collect from their liablity coverage or from your own uninsured/underinsured if they don't have insurance. So if you are at fault, you need the rental coverage to have a rental paid for. UM won't cover if you are at fault. I've had a couple of claims where the other driver was at fault but didn't get a rental because I wasn't totally confident that their insurance (or my UM) would cover it and because we could get by ok without the rental. If I had needed the vehicle, I probably would have pursued it more aggressively.

One benefit for carrying rental and collision coverage is that if you are in an accident (regardless of who is at fault), you can get your car repaired and get a rental by filing with your company. If the other driver is at fault, your company will subrogate against their company (or against the driver if uninsured). You won't have to wait on their company to act or determine if they are uninsured, your company will handle everything. I had some delays on an accident while we worked through figuring out that the other driver really wasn't insured. The insurance info she gave to the police at the time of the accident was fraudulent.

Because we have multiple cars, I don't carry it.
I am a one person/one car household and I do have rental insurance (even though it is not Boglehead-ish) for the reasons Lrisius mentions above. My policy gives me 30 days of rental car coverage. I have had to use the coverage twice in the past 5 years. After being in an accident the last thing I would want to do is haggle about car rental rates or look for a good deal on the internet! I have plenty of anecdotal evidence from friends and family members that dealing with the at-fault party's insurance company to recover expenses can be an exercise in serious frustration - especially if there is any question about who is at fault. The coverage also lessens the frustration when the body shop keeps extending the time they are holding your car hostage. :annoyed

So I treat this the same way I do trip insurance for a major vacation - I can certainly afford to cover the expense out of pocket, but the value lies in reducing the PITA factor and gives you some leverage to make things happen. IMO most body shops will want to stay on the good side of the insurance companies (especially if they are a preferred provider) and if the rental is NOT on the insurance company you lose that leverage with the body shop.
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Drain
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Re: Car insurance... do you include car rental?

Post by Drain »

First, to address a couple other posts...

No, I wasn't saying UM would always pay for a rental. I was cautioning against assuming the terms of rental coverage would be as pleasant as having everything paid for--e.g., by a UM policy. There are limits on rental coverage.

If you are paying a $142 premium every year for a $50/day benefit, you are paying for two weeks of car rental every five years, whether or not you ever need a rental. I guess this could be worthwhile if you're in more than your fair share of accidents, but otherwise, it sounds excessive to me.
cherijoh wrote:I am a one person/one car household and I do have rental insurance (even though it is not Boglehead-ish) for the reasons Lrisius mentions above. My policy gives me 30 days of rental car coverage. I have had to use the coverage twice in the past 5 years. After being in an accident the last thing I would want to do is haggle about car rental rates or look for a good deal on the internet!
This is a pretty good argument as long as the extra premium isn't crazy. On the other hand, you could avoid a lot of the hassle you're worried about by renting through USAA.com (you don't need to be a full member), giving you a 25% discount on four major rental agencies, with loss-of-use coverage included. That's good enough for me.

But I could see where if you drive a lot (we don't) and are in accidents fairly regularly, having the coverage could be worthwhile.

So you're saying that you can use the coverage even if you're not at fault? But then you're making a claim that you didn't have to make, and I wonder about the impact on your premium after that.
Darin
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jendoe
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Re: Car insurance... do you include car rental?

Post by jendoe »

Thanks... you have all given me quite a bit to think about and analyze. And, yes, my emergency fund can easily handle a month of car rental (I just hate having to spend from it!).

Darin - thanks for the tip about USAA. My mom and her husband recently joined, and signed me up as a "relative" - but I hadn't looked into it closely, and didn't realize that this was one benefit. Thanks!

Thanks everyone!
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DonCamillo
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Re: Car insurance... do you include car rental?

Post by DonCamillo »

GerryL wrote:In less than 3 months I was rear-ended 3 times.
What color was the car that got hit three times? I almost always had red or silver cars. Never got in an accident. For three years, I had a hunter green (dark green) car, and got rear ended twice. I think car visibility may be a significant factor in traffic accidents.
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takeshi
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Re: Car insurance... do you include car rental?

Post by takeshi »

Drain wrote:I looked into rental coverage with my previous insurer (USAA). I don't recall every detail, but the maximum benefit was something like $30/day for 30 days. Under some circumstances, the benefit was reduced to $15/day, and under others (as described by you, for example), there was no benefit. I also don't recall the premium, but it wasn't negligible...I dunno, let's say it was $20 or $30 per six months. Maybe that's an overestimate, but it wasn't $5. Anyway, for a maximum benefit of $900, with a more likely amount being a couple hundred dollars or less, I didn't see the point.
My options with USAA are $30/$900 and $50/$1,500. I've opted for 50/1500 and it's $6.04/month. Generally a waste but they just paid Enterprise ~$1,400 for the rental that was provided while my car was in the body shop for about a month. It's more about convenience than cost savings for me.
dickenjb
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Re: Car insurance... do you include car rental?

Post by dickenjb »

I only insure against losses that would have a significant impact on my finances. I can self insure for a week or two in a rental car.
MathWizard
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Re: Car insurance... do you include car rental?

Post by MathWizard »

I don't get that coverage.

The only time I needed another car, the body shop gave me a loaner for 3 days.
Not as nice a car as mine, but this was at no cost to me.
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Quasimodo
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Re: Car insurance... do you include car rental?

Post by Quasimodo »

GEICO’s Rental Reimbursement coverage will pay $30 per day up to $900 max. Our premium for this is $36 per year. This is according to our policy declarations page. I couldn't find a copy of the coverage language. $900 benefit divided by $36 annual premium = 25 years. I'm not too concerned about the cost of the coverage. Maybe that's reckless.

The comprehensive physical damage coverage includes rental reimbursement coverage that will pay $25 per day up to $750 per loss after theft of a covered auto.

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GerryL
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Re: Car insurance... do you include car rental?

Post by GerryL »

DonCamillo wrote:
GerryL wrote:In less than 3 months I was rear-ended 3 times.
What color was the car that got hit three times? I almost always had red or silver cars. Never got in an accident. For three years, I had a hunter green (dark green) car, and got rear ended twice. I think car visibility may be a significant factor in traffic accidents.
My car is blue. Basic blue -- apparently with a "Hit Me!" sign on the back. I wondered whether it had anything to do with the placement or brightness of the break lights. Probably more a matter of people not watching what they are doing.
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