Renting a Car in the US and Travel Insurance

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l43a2

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#306620 8-Aug-2023 10:06

Hi Team

Im going to the US next year and hope to rent a car for part of the trip, Travel insurance covers rental car issues, but do you need to purchase any Extra insurance from the rental car companies for this cover to apply?

Any help understanding this would be helpful.

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#3113118 8-Aug-2023 10:19

What "issues" does your travel insurance cover? Usually, travel insurance doesnt cover car rental damage, excesses etc

l43a2

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#3113120 8-Aug-2023 10:21

Southern cross mentions it covers up to 10k on rental car excesses.

tchart

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#3113130 8-Aug-2023 10:44

l43a2:

Southern cross mentions it covers up to 10k on rental car excesses.

That is good to know!

So when you rent a car in the US there are generally 3 insurances;

No insurance
Insurance with an excess
Insurance with zero excess (will be called Loss Damage Waiver)

For #1 this is usually only available to US residents as their personal car insurance will usually cover rental car insurance (or so Im told).

Some states require liability insurance as a minimum.

Given southern cross you probably want option #2.

BTW excess or not I have in the past used this site (https://www.rentalcover.com/en/rental-car-usa-guide) which was much cheaper than what I was quoted from the car rental place. In saying that I've never had to claim so I don't know how well it would work in relation to an accident.

While car rental insurance is a bit of a rort its obviously the easy option since you don't need to worry about any third parties in case of an accident.

CokemonZ

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#3113139 8-Aug-2023 11:03

You do not need additional insurance.

In almost all cases your credit card will have enough to cover it. If not essentially any reputable travel insurance will cover it.

Travel to the US on a regular basis for work.

frankv

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#3113203 8-Aug-2023 12:01

I don't know if this applies to the USA, but a YT video on driving in France recommended getting the rental car company's comprehensive insurance. These YT people seem trustworthy and not sponsored by a rental car company or insurance company.

Their reasoning was that, apparently if you have an accident, the rental car company will want your part of the repair bill settled in full in cash (or I guess credit card, if your limit is high enough), immediately. Obviously, if you have no insurance you could end up having to stump up $50K or more. But a large excess (aka deductible) could also ruin your holiday... whilst Southern Cross travel insurance does cover your excess, they won't pay it out immediately, so you might be short a few thousand dollars just when you need it most.

Incidentally, they also recommend taking a video or photos of the car before you start, in case the rental company hits you up for pre-existing chips or dings.

@CokeMonZ -- did you ever need to make a claim?

freitasm

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#3113204 8-Aug-2023 12:03

CokemonZ:

You do not need additional insurance.

In almost all cases your credit card will have enough to cover it. If not essentially any reputable travel insurance will cover it.

Travel to the US on a regular basis for work.

Credit cards have a very specific fine print when it comes to insurance. Some will only cover anything if the whole trip (travel, accommodation, car rental) is paid with the card.

I wouldn't rely on card insurance unless you read and understand the conditions.

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CokemonZ

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#3113210 8-Aug-2023 12:10

freitasm:

CokemonZ:

You do not need additional insurance.

In almost all cases your credit card will have enough to cover it. If not essentially any reputable travel insurance will cover it.

Travel to the US on a regular basis for work.

Credit cards have a very specific fine print when it comes to insurance. Some will only cover anything if the whole trip (travel, accommodation, car rental) is paid with the card.

I wouldn't rely on card insurance unless you read and understand the conditions.

Thats a hugely important point! Good catch.

Always read the fine print :) And specifically yes - at least the rental car if not flights and accommodation will typically need to be booked and paid for using the credit card you are relying on.

That being said I have put in a small rental car claim with my kiwibank credit card (mag damage to one wheel) and they paid it without too much hassle. I believe it was backed by tower.

To add to this - if you are over insured - car insurance from the provider, credit card and travel insurance, they may all have clauses saying that you have to try and get other insurances to pay out first. This I imagine will be a headache should it occur. More things to read.

mattyb

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#3113341 8-Aug-2023 14:20

Following this topic.... am also travelling to the US next year and planning to rent a car. Seems like a minefield the more I read about it! If someone has a good guide on this, particularly with respect to how the NZ vs USA car insurance systems work that would be valuable. Thanks in advance.

johno1234

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#3113346 8-Aug-2023 14:31

It is a little more complicated than described in posts above this one. In the USA there is insurance for damage and insurance for liability. The latter should be specifically covered if you are driving as you only need to bump someone to be a target for litigation. Only liability insurance covers that.

@sbiddle has covered this extensively. Travel insurance can cover all this - you do have to read the policy.

CokemonZ

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#3113442 8-Aug-2023 14:50

johno1234:

It is a little more complicated than described in posts above this one. In the USA there is insurance for damage and insurance for liability. The latter should be specifically covered if you are driving as you only need to bump someone to be a target for litigation. Only liability insurance covers that.

@sbiddle has covered this extensively. Travel insurance can cover all this - you do have to read the policy.

It is a bit more complicated but lets not run away with ourselves here. Most insurance policies that are designed for the travel to the US market are aware of and cover this.

Wording from Kiwibank Credit Card insurance regarding personal liability:

Unless you do something crazy you'd be hard pressed to reach this. Again, your credit card and insurance may differ.

It probably comes down to:

Can you wear the cost of the excess while you are claiming back from travel insurance/credit card insurance?
How long are you renting the car for - longer rental, more risk of damage.
How much is the insurance upcharge, and trade that cost for no hassle?

Fair point @sbiddle knows more. and writes stuff up very well.

(Doc published here: Travel_Insurance_Credit_Card_Policy_Wording_Jun22.pdf (kiwibank.co.nz) )

Kiwifan

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#3113454 8-Aug-2023 15:54

We have always selected option two as above but this year we are going for option three. The main reason we are changing is there has been an increase in car break ins especially in some of the cities we will be visiting so it is worth the extra cost to us.

Our go to city in the past was San Francisco (in and out) but over the past week we have seen several videos of how the place has deteriorated. We have spent many a happy hour on Market but the shops have all gone and it looks like there is a lot more homeless and drug addicts there now. So sad to see people just smashing car windows to grab folks possessions.

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surfisup1000

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#3113466 8-Aug-2023 16:33

You still need to be careful and check as it can vary by state too.

US rental car insurance has definitely improved from a few years ago. I see they tend to include LDW/LIS in the price now. One just needs to make sure they are included.

Renting a car in the US is cheaper than it used to be, because the price of the included insurance is less than the cost of when it was offered as an option.

I'd also double check the rental excess amount against your travel insurance rental excess coverage. Just make sure it is covered (eg, my last trip the rental car loss/damage excess was $6000 but my credit card insurance would only pay up to $3000 of that).

K8Toledo

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#3113473 8-Aug-2023 16:48

@l43a2

I'm half American and lived in the States for many years.

Personal Auto Insurance covers the car, not the driver - same as NZ.

You don't have to purchase insurance as the Rental Car Company have their own insurance.

Liability Insurance is extra and covers costs if the other party sues as the result of an accident where you were deemed liable.

nztim

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#3113475 8-Aug-2023 16:50

As someone who goes to the US at least once and sometimes twice a year get the rental companies liability and car insurance.(two separate extras)

Most travel insurance covers excess on rental cars but in the US there is no insurance with high excess to start with., you are totally liable without taking the cover from the rental company.

Any views expressed on these forums are my own and don't necessarily reflect those of my employer.

K8Toledo

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#3113534 8-Aug-2023 21:21

nztim: As someone who goes to the US at least once and sometimes twice a year get the rental companies liability and car insurance.(two separate extras)

Most travel insurance covers excess on rental cars but in the US there is no insurance with high excess to start with., you are totally liable without taking the cover from the rental company.

I believe Car Rental Insurance covers the excess that could be charged by the rental car company in the event of an accident.

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