BY CB STAFF

When renting a car while traveling for business or pleasure, it’s customary for the car-rental company to offer insurance coverage for a few extra dollars a day. And while many opt for the additional charge, others assume they are already covered by their own auto-insurance plan or their credit card provider. However, Jaime J. González, president, CEO & chairman of Antilles Insurance Company, warns that there are a number of pitfalls in turning down the car-rental company’s insurance and assuming that the coverage you have through your own policy or credit-card company is the same. “When I rent a car, I always buy the liability and physical damage policy offered by the car-rental company,” he said.

“If you rely on your personal auto-insurance policy or the coverage offered by your credit-card company, it could turn into a real nightmare if you have an accident or the car is stolen.”

He explained that if you pay the extra fee to have your car insured through the car-rental company’s plan, usually all you have to do in the event of an accident or theft is turn in your keys and get another rental car. However, if you rely on your own resources, you not only face a mountain of paperwork, but there are often a number of items and expenses that aren’t covered. “If you have an accident in a rental car and you don’t have their coverage, the first thing the car-rental company will do is send you the damage information and you have to send it to your insurance company and they open a claim,” he said. “Worse, if you injure someone, the lawyers are going are to send all the paperwork directly to you and you have to deal with it yourself.” He added that if you are covered by the car-rental company’s policy, the worst that can happen in the case of bodily injury is that the police will require a sworn statement and you can be your own way. “Also, people don’t realize that if they use their own auto policy and have an accident in a rental car, their premiums go up and they pay the deductible just as if it happened in their own vehicle.”

He also pointed out that for those relying on their credit-card companies for their auto-rental coverage, most people fail to read the fine print. “If you have an accident in certain countries, you could be out of luck, as the fine print in many of these plans lists a number of countries where the coverage isn’t valid,” he said, and added that many people are also unaware that car rental loss and damage insurance provided by credit-card plans and their auto policies is considered excess coverage, which means that it should only be used as a backup. González also said that the fine print on credit-card plans can also list a number of makes and models of vehicles not covered, as well as various kinds of losses and damages. “There are a number of exclusions that are very worrisome, and unless you really study the fine print, you could be in for a very unpleasant surprise if something unfortunate happens,” he warned.

Another area that renters overlook is the loss-of-use charge, given that a damaged or totaled car is worthless to the car-rental company until it is repaired or replaced. “If a car-rental company is making $2,000 per week by renting a (given) car and it takes two weeks to fix it, they are going to come after you for that loss,” said González. “But if you take out a policy with them that is taken care of.”  He also said that if you don’t have their policy, any losses incurred will be put on your credit card until they are paid. “A lot of (insurance) providers, brokers, and agents don’t always go the extra mile and tell their clients these things,” he said. “But given all the additional paperwork, time and expenses involved if something happens and you’re not covered (by the car-rental company), the best option is to pay the extra five or six dollars a day for added peace of mind.”

Published by: Caribbean Business

Thursday, October 9, 2008 / p. 36