#WhiteboardWednesday Rental Car Insurance: Do I Need It? (May 31, 2017)

[Music] hi everybody Matt Clement here welcome to this week’s edition of whiteboard Wednesday where we tackle real-life issues that our clients face and we answer questions of every different people they call our office now this week we’re going to be talking about rental car insurance and if you need it and when you rent a car we’ve all been there before you find yourself coming in up up a flight you’re at the rental car companies you know building an off site and there’s a big line and you finally get to the front and the rental agent pushing paper in front of you she’s done it a million times you know there’s things you initial and sign and all this information kind of coming and going and the agent begins to make you feel like you need this insurance because you don’t understand your coverage and you might not be covered for all these things in your shop feeling insecure and oftentimes you fall for it and the assistant show that 30% of the time people do in fact buy this rental car insurance and the fact of the matter is is most of it it’s totally redundant you’re covered anyway you do not need it you’re not going to be able to really benefit from it after you purchase or does it but you’re going to spend an arm and a leg doing it so I created this label Wednesday about the rental car insurance because I wanted people to feel a little bit more confident about what they’re doing they’re renting a car whether or not they need this stuff and have them better understand kind of what it is they’re being offered so let’s get into it rental insurance you know is offered in four types of in secret the first one is lock damage waiver and this covers you for crashes two vehicles theft of the vehicle that you’re renting and vandalism to the vehicle that you’re renting you’re right to think that your own insurance will cover you for this your personal auto it certainly will so long as you have both collision and comprehensive coverage collision covers the damage to the vehicles in a crash and comprehensive covers the other ways that your vehicle could be harmed at a fire fast vandalism tree falls on it that type of thing so if you do in fact have collision and comprehensive your own personal auto policy will cover you for what they’re offering you for about $20 a day it’s not cheap you know you go away for a long weekend you can spend almost $100 just getting the lost damage whatever that you probably don’t need you know the only kind of downside to using your own policy is that there’s a deductible 500 or a thousand bucks is pretty typical so you should way that you know when you’re making a decision about whether or not you want to purchase it and then loss of use is another initiative raised because a loss of use is the amount of money that means the rental company loses by not being able to put that particular vehicle out on the road so if it’s being repaired because you’ve damaged it they’re going to be losing profit and they will charge you for that and you’ll be responsible for it most good personal auto policies will cover you for that but it’s time to check in to because you can run you know $1,000 tab pretty quick on a car that rents for 50 or 60 bucks a day so you might want to look into that obviously with the rental damage waiver this is included the other type of insurance that is diffic offered is liability insurance now liability insurance is required by California law so you need to have to produce proof that you have your own a personal liability coverage or you have to buy their okay so this one’s pretty much a no-brainer if you have your own personal policy obviously you’re gonna have liability I don’t really think you need to go purchase theirs I mean their coverage is a million bucks which is you know that’s pretty big policy but you know if you’re so into having a million dollars if I raise your own rates and your own coverage limits rather of your insurance policies not be buying bears this typically runs about ten dollars a day so you know also not very cheap when you you know multiply times the number of days that you rent liability insurance of course covers damages that you do to other people to their vehicles to injuries that you might cause I’m a personal injury lawyer I represent folks that are harmed by people that in fact have liability coverage because you know they’ve ran a light or you know we’re texting and driving or something like that and they cause injuries and so this type of thing will cover you for that which is you know obviously a positive one thing I do want to draw attention to here is that both of these things if you’re planning on using your own personal auto policy it won’t cover you if you’re doing business so when you’re traveling you rent a car if you’re there for business your own personal auto policy probably won’t cover you you might not know that and may be too late once you realize it doesn’t I your claim because you’re doing business all right and so be really mindful of what the purpose of your trip is and if it’s business-related assume that the insurance company is going to find out and definitely need to buy all this insurance and expense it or write it off it’s your business or you know speak to somebody at your at your work and make sure that you’re covered by the businesses company auto policy this is a really easy trap to fall into if you’re traveling traveling for personal reasons great no problem but if you’re traveling for business reasons keep this in mind the third type of insurance that software buy rental company is personal accident insurance basically this is insurance that pays your medical bills if you’re involved in an accident you’re injured it covers your passengers as well it’s really kind of like health insurance so if you have health insurance you might be picking yourself white on you buy this you know I already have somebody’s going to pay my medical bills and you’re probably right so if you have decent health insurance probably don’t need this another really smart angle is through the Med pay provision of your own auto policy most people’s auto insurance has about $5,000 sometimes as much as $25,000 and your own auto insurance company will pay for your medical bills no questions asked faults not important if you present them with the bills and so this is a way to get your medical bills covered the fourth type of insurance that rental car companies offers personal effects insurance so it can protect your items your computer your your cell phone your your your camera and your GPS and so you know if something gets stolen don’t cover it this one’s about five bucks a day and I should mention that so does this personal accident sure it’s also about five bucks a day so for five bucks a day though basically you know cover your immunity gets stolen I mean seems pretty unlikely your stuffs gonna get stolen you should probably consider what it is you’re traveling with if you’ve got expensive computers and you know equipment or something you might want to get this but otherwise probably something you could pass on for five hours a day you know it does that up the the other thing is if you have homeowners or renters insurance it’ll cover you for this type of thing there’s the deductible obviously but if you know you rent a car and you’re not traveling for a business reason and somebody breaks into and steal stuff your own renters or homeowners insurance will cover you now another thing another idea that floats around is well I have a credit card and I’ve heard that credit cards pay for rental insurance for you know they cover you some stuff like this and that’s partially true it’s important to note that it only covers you though if you actually use that particular card so you know just having an NX Carter Visa card or something doesn’t mean that something you have insurance you actually have to use that card for this particular transaction and then they will cover you with some exceptions first things first is the secondary coverage so it’s not really you know primary covers is going to protect you a lot it just kind of fills in the whole it stands behind anything you purchase from the rental car company it stands behind your personal auto policy and will cover you but only if it has to so it’s not the type of thing that’s great and you are gonna have to bring your own a claim against your personal auto insurance which may raise your rates so this won’t protect you from that and there’s some limitations to it like I said it’s not the best it will cover you for collision and loss of use which is good it’s usually maxed out the twenty five to fifty but so you know so a decent amount of coverage but there are some limits the only cover you for short-term rentals this credit card insurance is what if you rent a car for a month or two months or you know I have a car you know while yours has been fixed or something once you go over the fifteen or thirty days then it nullifies it so long-term rentals are no good with credit card insurance it does not cover you for liability it does not cover you for any of you medical bills and it doesn’t cover you training you property loss either so you know you’re going to want to look into you know the fine print of your credit card statement or call the company and ask them which coverage is if you know you’re going to be traveling there’s lots of little exceptions to it you can’t have an expensive car if you’ve got a sports car no coverage if you’ve got a nice big SUV no coverage there’s a lot of different things like that so you’re going to want to kind of know what you’re doing if you’re going to rely on this type of thing and then the last thing that sometimes people do is they buy the travel insurance and if you find flights out – something like that you’ve probably seen travel insurance and actually travel insurance is the worst idea if you’re kind of someone that doesn’t have a car uninsured or something like that it says this primary team you know primary to your personal auto policy which is great I mean you don’t have to bring your own claim to your policy so it won’t raise your rates that’s a good thing it only covers you for collision and loss of use and it’s certainly much cheaper than buying it at the counter from the rental insurance the rental car company rather so if you kind of think ahead you can save some money and get the same coverage so you know this is kind of how it all works you know at the end of the day I think my advice would be if you are well insured if you have a good auto policy and good health insurance then you don’t need this stuff alright you know all this money is going to be put away and you could spend forty dollars a day you know buying insurance that you don’t need because somebody made you feel insecure when you’re renting the car those people by the way make a commission when you buy the insurance from them so it’s a sales thing and it’s probably really waste of your money and if you’re well insured then I definitely recommend you don’t buy any of this stuff confidence they know thank you know you’re covered and if you don’t have an auto policy and you’re kind of you know relatively uninsured because you don’t have a car if you don’t have you know a lot of assets what I recommend is obviously if you’re in a car you need the liability coverage go karting for a million bucks that’s great and then make sure you use a credit card and it will cover you for the collision and loss so you know you’re going to have to buy this for ten dollars a day and then you have the credit card which you don’t pay anything extra for that will cover you for all the damages that you do so that’s kind of my recommendation about how to approach it you know if you’re going to be having with really expensive item consider the personal effects if you’re not it’s just normal you know travel with normal stuff pass on this if you have health insurance I recommend you pass on this and you know that will at least leave you not wasting your money so that’s the end you know those are the issues that they’re going to face as the rental counter if you have any questions about this I’m happy to answer them if you have any questions at all about anything related to personal injury matters I’m also happy to answer those questions I appreciate you watching I hope you learned something and I will see you next week on whiteboard Wednesday