Friday, December 20, 2013

Before you rent a car or loan out yours, consider a few things

Will you need to rent a car during your holiday travels? Does your brother want to borrow your car while he’s home from college? Here are a few things to consider.

What should I know about rental car insurance?

If you are renting a car while you travel, you will likely be offered insurance by the rental car company. Before you decide, check with your agent to find out if your personal auto insurance policy covers damage to cars you rent. Many policies do not cover costs that aren’t directly related to damage, such as the daily fee charged by the rental agency for each day the car is out of service being repaired. In that case, you may want to consider buying coverage from the rental agency.

Read more about rental car insurance.

If I loan my car to someone and they cause a wreck, can my auto insurance increase even if I wasn’t driving?

It’s likely, since your insurer will have to pay a claim under your policy. We recommend you contact your agent to find out for sure. Unless you have a restricted policy that only covers you as a listed driver, a standard auto policy will typically cover people whom you allow to drive your vehicle. If the wreck involves a crime—fleeing the scene, driving under the influence or using the car to commit a crime – then your coverage would not extend to their use.

In general, unless you have a restricted policy or you didn’t authorize the use of your car, when you loan your car, you loan your insurance.

Read more about what most auto insurance policies cover.