Renting a Car After an Accident: Insurance Info

Getting into a car accident is a stressful experience. And, if your car is damaged and has to go to the body shop, it can mean days — even weeks — without your vehicle.

So, if you don’t want to rely on family, friends or public transportation while your car is in the shop, you might choose to rent a car. Here are some important things to think about:

Rental Reimbursement Coverage

There are a few ways insurance comes into play when you’re renting a car after an accident. The first thing you need to think about is whether you have rental reimbursement coverage as part of the auto insurance policy you have on your own vehicle. Rental reimbursement coverage is typically an optional coverage that helps pay for the cost of a car rental while your own vehicle is being repaired after a covered loss. If you want rental reimbursement coverage to help pay for your rental after an accident, you must purchase it in advance — before an accident occurs.

If you have rental reimbursement coverage, there is typically no deductible for renting a car after a covered accident, but there are usually limits to the rental car cost per day and also the number of days your insurer will help pay for the rental.

Insurance at the Rental Counter

Once you determine whether your car insurance policy will help pay for your rental car while your own vehicle is being repaired for covered accident damage, it’s time for some more questions: What if you get into a crash in the rental car — are you protected? Should you buy the extra insurance offered at the rental car counter?

To answer these questions, check your car insurance policy. In many cases, the liability, comprehensive, collision and other coverages might extend to your rental car. If you’re unsure, you can always double-check with your insurance agent.

Additionally, rental car companies typically offer car insurance at the counter. Some credit cards also offer secondary rental car insurance that helps you pay for costs not covered by your car insurance policy, such as deductibles and coverage gaps. Click here to learn more about the options for protecting yourself in case of an accident in a rental car.

For more information about Dallas car insurance, give Americo Direct Insurance a call at 214-374-9997.

(Source:Allstate)

The Insurance Differences in Leasing vs. Buying a Car

1. Coverage is mandatory for leased cars, but not necessarily for purchased cars.

When you lease a car, you are paying to use a car that is actually owned by a finance company; therefore, it makes sense that it is mandatory to purchase a car insurance policy when signing a lease. When you buy a car, that car becomes your own property, and there is no federal law mandating compulsory car insurance. Instead, the laws for car insurance are mandated on a state-by-state basis. While most states have laws dictating mandatory car insurance, some states’ laws are stricter than others. For example, New Hampshire does not even require its residents to purchase car insurance at all if they can prove that they can afford to pay for damages in an at-fault accident.

2. You can control what you pay for insurance.
While certain types of insurance are mandated, more for leased cars than purchased cars, there are factors you can look for and choices you can make to minimize insurance costs. Vehicle make, model, probability of theft,  and your claims history and driving record can all affect how much you will end up paying for car insurance. If you are looking to reduce insurance costs, do some research before you lease a car and find out what you can do, and what you should look for, in order to pay the lowest amount possible for coverage. This will pay off whether you decide to lease or buy.

3. Most car lease contracts include GAP insurance coverage.
When you lease a car, it is nearly guaranteed that your lease contract will include GAP (Guaranteed Auto Protection) insurance coverage. If you get into a car accident, your auto insurance policy will cover the current market value of the car, not the total amount of money you actually owe the finance company. This amount can be especially large if you put down a very small up-front payment. GAP insurance covers this literal gap between what is covered and what you owe. GAP insurance is a worthwhile investment when leasing a car, but it is not necessary for someone who purchases a car.

4. Most car companies require comprehensive and collision coverage for leased cars.

Both comprehensive and collision insurance are crucial for anyone leasing a car. Collision insurance covers the damage done to your vehicle when you collide with another vehicle or object. Comprehensive insurance covers losses caused by anything from fire to natural disasters to vandalism to theft. Most car companies require both types of insurance for leased cars, while car purchasers are not required to purchase either. Insurance requirements for car owners vary from state to state, but they are not dictated by car companies.

4. Many car companies require original parts for leased-car repairs.

You don’t technically own a car when you lease it. Thus, if you damage it in a collision or accident, you have done damage to property that isn’t yours. Often, car companies that lease cars to drivers require them to replace damaged parts with original parts. Original parts can only be bought from the original manufacturer and can be very expensive. When a car owner damages his car, he has the choice to replace the damaged part with any part of his choice; this can ultimately save him a good deal of money.

If you're looking to lease or buy a car and have questions on Dallas Auto Insurance, giveAmerico Direct Insurance a call at 214-374-9997.