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Oops! An Honest Mistake Agents Often Make

May 6, 2009

 

Chris Garlasco, Owner & Managing Partner - Founders Insurance Group

Chris Garlasco, Owner & Managing Partner - Founders Insurance Group

If you are like many of us in the north, you probably spent the entire winter planning your upcoming vacation. You scoured the internet for the best air fare. You found a great room facing the ocean. You went out and bought a new bathing suit and a new tube of sun block to go along with it. You left no stone uncovered. You got a great rate on a rental car and even took the time to call your agent to make sure that your auto policy covered you so you didn’t have to pay for that outrageously expensive rental car insurance coverage.

Chances are that your agent told you that as long as you have full coverage (Collision) on your auto policy that there would be no need to purchase the rental insurance coverage. Your agent was wrong! Unfortunately, in an honest effort to save you some money, this is a mistake agents make all too often.

Here’s the deal, the collision coverage that you are carrying on your own auto policy does
cover a collision that you may have had with the rental car. However, there is no provision in your auto policy to cover you for “loss of use.” Simply put, the rental car company will charge you their daily rental rate for each day that their car is in the shop and out of service. So, that nice convertible that you got for $40 per day is now out of action for three weeks while being fixed, your insurance company covers the damage, but the $821 loss of use hits your credit card since that car can’t be rented out to someone else. It is my understanding that there are a couple of states that have prohibited this practice; Connecticut is not one of them. When you do purchase that coverage, be sure that the rental agent points out this specific coverage. One other key note to keep in mind, the rental car company may place a large hold on your credit card while waiting for your company to settle the claim.

Thanks again for spending some time with me!

Your humble risk manager,

Chris Garlasco

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2 Comments leave one →
  1. May 8, 2009 8:02 am

    This is definately the case with most Insurance Companies. However, Chubb Insurance covers the rental vehicle under Liability, instead of collision. Therefore, items that you are held liabile for, such as the time that a rental vehicle can not be rented out due to the damage, is covered with Chubb. This is why we are proud to write one of the broadest policies in the industry. Thanks!

  2. May 21, 2009 7:38 am

    Great article on car insurance. thanks.

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