In your travels, you may have had to rent a vehicle. If so, I am sure the rental car agency offered you the opportunity to purchase insurance on the rental vehicle. Depending on the types of insurance you purchase, it may double the cost of renting the vehicle or come close to it.
What you may not realize is that if you carry physical damage (other than collision/comprehensive and collision) coverage on your personal auto policy, that coverage and deductibles will provide the same coverage for a private passenger-type rental vehicle. This means you would not need to purchase physical damage coverage from the rental car company.
N.C. Living
Affects on Automobile Insurance Rates
As a result, I have had numerous opportunities to try to explain the factors that affect auto insurance rates.
However, the personal auto policy does not provide for loss of use. Let’s say you are involved in an at-fault collision in the rental car. Your collision coverage transfers over to cover the repairs, subject to your collision deductible. The rental vehicle repairs will take seven days, and the rental car agency will want payment for the days the vehicle is out of service (loss-of-use charges).
Subject to your insurance company’s underwriting guidelines, you may be able to add endorsement NC 03 30 Coverage for Rented Vehicles to your personal auto policy that provides loss of use coverage, subject to a $250 deductible. The current premium charge on a qualifying North Carolina Farm Bureau personal auto policy is $2 per six-month policy period.
NCFB News
Are You Protected?
Part 1 of a series of articles to help you better prepare for life’s what-ifs with NCFB Mutual Insurance.
To Cover or Not to Cover
Some policyholders qualify for physical damage coverage on their personal auto policy but choose not to purchase those coverages.
However, these individuals may rent vehicles periodically. This same endorsement can be purchased for the loss of use coverage, and in addition, the endorsement would also provide other than collision/comprehensive and collision coverage with a $250 deductible. In this case, the current premium with North Carolina Farm Bureau would be $8 per six-month policy period.
NCFB News
Filling the Gap: Repair or Replacement Coverage vs. GAP Insurance
There many things to consider when purchasing a new automobile, including choosing between the Repair or Replacement Coverage Endorsement and GAP Insurance.
A couple of important points: First, not all personal auto policies qualify for this endorsement; second, no coverage transfers from the personal auto policy when renting a commercial-type vehicle. A good example is renting a box truck you would use when moving. For commercial-type vehicles, I would advise buying the insurance through the rental vehicle company.
This article does not provide all of the details associated with the personal auto coverages, so if you have interest or questions about this or other specialty endorsements, feel free to reach out to your local Farm Bureau agent.
