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Auto
Rental Car Information
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What is the collision damage waiver offered by rental firms?
The collision damage waiver is a release of your obligation to pay the rental company if the rental vehicle is damaged, as long as you have complied with all the terms of the rental agreement. Rental contracts vary, but generally they require reimbursement up to the full value of the vehicle rented, as well as loss of use and administrative fees in the event of damage to the vehicle. This could amount to $25,000 or more depending on the vehicle rented.
Do you need to buy the collision damage waiver?
While your North Dakota or Minnesota personal auto policy may provide some coverage for rental vehicles, it does not cover all the obligations you assume by signing the rental contract.
You must purchase additional liability and physical damage coverage when you rent a motor home or truck (U-Haul, for example). This type of vehicle is not covered by your personal auto policy. Rental of a pickup or van for business use is not covered by your personal auto policy.
By law, North Dakota and Minnesota personal auto policies provide coverage for damage to a rental vehicle under the liability section of your policy regardless of fault. For the coverage to apply, the vehicle must be rented in your own name and for 30 days or less.
Based on legal requirements, you most likely have coverage for damage to a rental vehicle under your personal auto policy. However, there are reasons you may want to purchase the collision damage waiver anyway. We feel it is our obligation to advise you when coverage applies and the advantages of the rental car insurance so that you can make an informed decision.
What are some advantages to purchasing the waiver?
- Even though your insurance would cover the damages, the rental company may bill the estimated damages to your credit card when the car is turned in. This could result in a diminished line of credit for the balance of your trip or interest fees built up during the settlement process.
- At-fault accidents are more likely in unfamiliar cities, driving an unfamiliar car. If the collision damage waiver is not purchased, your insurance company will most likely increase your rates if the accident is considered at-fault.
- Credit card companies are eliminating coverage for rental vehicles. Check with your credit card company before assuming they provide this coverage. Most often the coverage is simply deductible reimbursement. Some pay the damage, and then turn the claim in to your insurance company.
The broadest protection is achieved by:
- Renting from a reputable rental firm.
- Purchasing the collision damage waiver.
- Having a full coverage personal auto policy with high liability limits.
- Having a personal umbrella liability policy.
Before renting a car:
- Include the cost of the collision damage waiver when comparing the total cost of vehicle rental from company to company.
- Find out from the rental company how the claim is handled if the rented vehicle is returned damaged and the collision damage waiver was NOT purchased.
- Will a charge be made against your credit card for the damages?
- What is the maximum dollar amount you could be liable for?
- Find out from the rental company how the claim is handled if the rented vehicle is returned damaged and the collision damage waiver WAS purchased.
- What actions would cause the collision damage waiver to be voided?
- Does the collision damage waiver cover comprehensive losses (fire, theft, hail,
vandalism)?
- Ask the rental company to send you a copy of the contract you will be signing so that you have adequate time to review it before arriving at the rental counter.
If you send the contract to us, we can determine for you what specific coverage your auto policy has and how it applies to this agreement.
- It is also critical that YOU read through your rental contract carefully so that you do not violate any of its provisions and void the coverage it provides.
When renting vehicles remember to:
- Bring your auto insurance ID cards. Some states require all drivers to have evidence of insurance in their possession, and the rental company insurance may not be acceptable.
- Completely and thoroughly inspect the vehicle before you leave the lot. Be sure all previous damage and/or missing parts are listed on the contract.
- If you will be crossing state lines or national borders, be sure to have the rental clerk approve this in writing on the contract.
- Be sure ALL potential operators of the vehicle are approved and sign the rental contract. Be sure all operators have their own personal insurance policy or be sure to purchase the collision damage waiver.
- Carry two credit cards with you if possible so that one can be used for the vehicle rental and another for travel expenses.
- When you are renting a vehicle for more than 30 days at a time, or at regular intervals, be sure to tell us. Your policy will need to be amended to extend any coverage for this situation. This additional coverage typically costs only $12 per year.
- If you have not purchased a personal umbrella policy, perhaps now is a good time to do so.
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