Fact 1: Every rental car in the United States, by law, has state minimum lability insurance.
Owners of regular vehicles are required by law to have at least the state minimum liability limits. Therefore, it makes sense that rental car companies (as the owners of the vehicles) should also ensure their vehicles are covered to the minimum liability level.
For example, in Illinois, the limits are as follows:
* Bodily Injury (BI) & Property Damage (PD) Liability = $25,000
* Uninsured Motorist (UM) = $50,000
* Under Insured Motorist (UIM) = $20,000
See a full list of each state's Liability Financial Responsibility Limits
Compared to your personal auto or umbrella liability coverage, the state minimum limits don't adequately cover the true risk. That being said, if your tolerance for risk fits within the minimal limits for your state, then this level of coverage is at least better than not having any liability insurance at all.
Rental car companies, in my experience, are reticent to let renters even know that their rental cars already have state minimum liability insurance included. I suspect by withholding this information from a renter, the rental agent believes they have a better chance of up selling to Supplementary Liability Insurance (SLI) upon vehicle pickup at the rental counter.
Fact 2: Insurance Options Offered By Rental Companies Are 'Optional'!
Even though a rental agent cannot force you to take out their Collision Damage Waiver (CDW) nor buy their liability options (both are optional, by law), they can however ask you to provide proof of insurance. Often times renters have an insurance card, though if that's not the case having your insurance policy number and the name of the insurance company should suffice. I personally have my annual rental car insurance policy stored on my smart phone DropBox, just in case.
If by chance, an agent disputes the claim that CDW is optional, then ask to see the rental agreement, and at the top of the agreement, it should say "Optional Damage Waiver", or something to that effect. If their form doesn't use the word "Optional", then it's our understanding that they are in breach of the law.
Super Smooth Rental Car Pickup Steps
When picking up your rental car, consider these simple steps to ensure a smooth pickup process.
- 1) Have your credit card and drivers license ready. (note: ensure its a credit card and not a debit card, given many rental companies require you to have return flight tickets to be able to use a debit card)
- 2) When asked if you want to buy the insurance:
- A) simply say: "No thanks, I already have damage insurance".
- A) Be ready to give the name of the insurance company (in our case Bonzah is the insurance agent, but the actual insurer is Arch Insurance).
- C) If they ask about liability insurance, just say: "I am ok with the state minimum liability that the car has". (at this point they may think you are a smart aleck ;-)
- D) Or if you do have your own auto or umbrella liability insurance, you can mention that too.
- E) We recommend at least having your policies stored on your smart phone, in case the agent asks for proof of the policy number and the insurers.