insurance

What car insurance does and doesn't cover

The rental is covered ... sort of
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The rental is covered ... sort of

If the question of whether to purchase rental car insurance puts a blank stare on your face, you're not alone. A 2007 study by the NAIC says more than 2 out of every 5 consumers are confused by rental car insurance or only have a vague idea about what it covers. John-Bernard Duler, founder of the auto insurance company Esurance, says if you rent a vehicle and wreck it, the damage to the car should be covered by your regular auto insurance. Unfortunately, those won't be the only charges.

"The auto rental company could charge you for loss of use," Duler says. "You could get charged for 45 days of renting this car every day, and that's not covered (by insurance)."

In addition to not compensating the rental company for lost income, Duler says your car insurance may not cover the full value of the vehicle. Many insurance policies only provide compensation for the actual value of the vehicle or the cost of repair -- whichever is less.


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