Escaping the Cold This Winter?


Based on how fall played out this year, it looks like we could be in for a long winter! If you’re planning to take a break to someplace warm and sunny, you’ll need to know if, and how, your insurance travels with you.

Renting a car? If your personal auto insurance policy has Comprehensive and Collision on at least one vehicle, those coverages will also apply to a private passenger auto you rent short-term in the United States or Canada (as well as territories of the U.S.). The deductibles that apply to your own car will also apply to a rental car. So, if you have a $500 deductible for Collision coverage on your car, that same deductible will apply to collision damage to a rental car.

The liability and other coverages on your auto insurance policy will also apply to your use of a rental car. But remember, your auto insurance policy covers you only in the U.S. and Canada. If you rent a car outside the U.S. or Canada, check with the car rental company to see what coverage they offer. If you have an Umbrella Liability policy, it may provide liability coverage for your use of a rental car outside the U.S. and Canada. This would protect you against lawsuits for bodily injury and property damage caused while driving the rental car, but not for damage to the rental car.

Car rental agreements usually hold the renter responsible for three costs that may not be covered by your auto insurance policy:

1. Loss of use. The rental company will charge you for their lost rental income while the damaged car is being repaired. Depending on the amount of damage, the time required to make repairs could be several weeks, so this expense can add up.

2. Diminished value. Even though the rental car may be repaired to perfection, the mere fact that it was involved in an accident may cause used car buyers to pay less than they would for a vehicle that was never in an accident. As a result, when the rental company sells the vehicle they may get less than they would for a similar vehicle that wasn’t damaged. This is when you get a bill, which can amount to hundreds, or thousands, of dollars.

3. Claim administration fees. The rental company will incur expenses for the time spent administering repairs to the vehicle and pursuing reimbursement, so they’ll charge you a fee to cover this expense. We commonly see claim administration fees of $250 to $500. In addition, they can charge you for towing and storage if the car is damaged while in your possession.

How can you avoid these potential additional expenses? You can purchase a “loss damage waiver” (LDW) from the car rental company. This will relieve you of responsibility for damage to the vehicle (as long as you use the vehicle in compliance with the provisions of the rental agreement) and will normally include coverage for the three items noted above. Check with the car rental company to be sure. Or, you may be able to add coverage to your own auto insurance policy for minimal cost to provide coverage year-round. This way you’ll have coverage anytime you rent a car in the U.S. or Canada. Check with us if you’d like to know more.

What about your personal belongings, such as skis, golf clubs, and clothing? If you have a home, condo, or renter’s insurance policy, chances are, your personal belongings will be covered anywhere in the world. The same perils (the causes of damage or destruction) that apply to your property while it’s at your home will apply while your personal property is traveling with you. This usually includes coverage for damage caused by fire, smoke, theft, wind, hail, lightning, vandalism, explosion, and several other causes. If your property is stolen, the provisions of your policy will require you to report the theft to police before you file a claim on your insurance. What about the airline losing it? Sorry, that’s not covered.

If you plan to travel, we hope you have a safe and enjoyable trip. And, please bring some sunshine home to share with the rest of us!

This article was written by Dave Boer. Please send comments or questions to Dave at