What coverage do I have under the Massachusetts Auto Policy when I rent a car?
In general, when renting a car on vacation, you get the same coverages as on your car you left at home: liability, comprehensive and collision. And rental company insurance is expensive. Consider that at $10 / day, that equates to $3,650 per year, a lot for auto insurance. But if you don't buy their CDW coverage you may have other exposures. For details, read on.
It works this way: the Massachusetts Auto Policy (MAP) says that it will extend coverage to a “replacement vehicle”, usually meaning the rental while away from home on business or on vacation. Thus, the coverages you bought for your personal auto extend to the rental auto. Thus, if you don’t buy collision for your car at home, you won’t pick it up for a replacement vehicle. In this case we recommend you buy the rental Collision Damage Waiver (CDW) coverage.
Coverage from the Massachusetts Auto policy (MAP) follows you when you rent a car in “covered territory” which is the entire USA, its possessions and territories (like Guam and Puerto Rico), and in Canada. Coverage does NOT extend too any other country, such as Mexico or most of the Caribbean, or Europe, Asia and so forth.
When traveling outside of these 'covered territories', we suggest you buy the rental insurance coverage. You can use your gold or similar high benefit credit cards, but realize that these offers are not always all you expect. However, when traveling outside the U.S. or Canada, we suggest you buy the coverage so you can just give them the keys if something happens.
The Massachusetts policy protects you and "household members” (e.g. related to you, and living in your household). Careful here: the insurance carrier can deny all optional coverages if an operator is NOT listed, so check who’s listed and be sure only the drivers listed in the rental agreement drive.
"Unauthorized drivers" fall into the same category as someone who steals your car: a car thief! Many car companies charge an extra $10 or so per day per additional driver. If you're covering any serious distance with a friend or spouse, splurge for the additional driver coverage to take breaks from these unfamiliar roads and traffic customs. It's well worth the cost. But if an unlisted driver drives the rental, both the rental insurance and your own have escape clauses, meaning you'll probably be on your own for any damage the unlisted driver causes.
What about liability?
The policy extends liability protection to a “private passenger auto”. A rented car is fine; trucks and vans generally won’t qualify under the "replacement vehicle" definition so with these it’s prudent to buy their CDW coverage for larger vehicles to be sure. If you rent something over 10,000 pounds your policy will definitely NOT extend. We always buy the CDW for these rentals!
What about collision & comprehensive (physical damage) - for damage to the rental itself?
Collision and Comprehensive says coverage applies and extends to "other private passenger autos." Some carriers interpret this as only allowing the rental of a 'private passenger car'; some may include pickups and vans less than 10,000 lbs. So if you and buy collision and comprehensive insurance for your sedan at home, and you rent a sedan when you're away, those coverages, collision and comprehensive extend. If the rental vehicle is substantially different from what you own and insure back at home, get the CDW to be sure.
What will get paid? What won’t?
When it does pay a physical damage (collision or comprehensive) claim, it will only pay actual cash value (meaning they deduct depreciation). Some rental contracts require REPLACEMENT COST. The Mass policy will NOT pay on a replacement cost basis. They pay based on like kind and quality (a five year old car has a five year old fender: that's how they do it). This may involve an additional cost to you if the rental company insists on new parts on a high mileage vehicle. As agonizing as it may be, read the rental contract for clarity. Or buy the CDW coverage.
What continued rental charges by the rental company?
If you damage a rental car, you are usually responsible for 'loss of use' charges, or continued rental, as well as other “administrative” charges. Your insurance will NOT cover these. This could be an expensive issue if a vehicle takes weeks getting replaced, so understand that you’re on your own for this part. You can't buy this coverage back on a Mass auto policy (except through the rental company's CDW)
Collision Damage Waivers (CDW) through the rental agency and Gold Cards
The rental companies “sell” collision or loss damage waivers that remove the responsibility for physical damage claims and resulting loss of use. Ask or check the fine print as it is easy to VOID these rental agreements from what you don't know (valet parking can be a problem, as it would be for any unlisted driver).
Gold cards and platinum cards also have requirements as to claim reporting periods, rental length periods and types of vehicles that can be rented. If you rely on the coverage from your credit card, we urge you to check the agreement before leaving home.
While the Massachusetts Auto Policy provides a lot of coverage to your vacation rental vehicle, pay attention to who’s driving, and understand that if you are in an accident you’ll continue to rent that car while it’s being fixed. It’s good, but not perfect.
To discuss your personal insurance needs, call one of the Gordon Atlantic Insurance professionals toll free at 800-649-3252. Prefer to type versus talk? Click below