Date: August 16, 2001
For more information contact: Eileen Mallow (608) 266-7843 or eileen.mallow@wisconsin.gov

Madison, WI--When vacationing or on a business trip, renting a car may be in the travel plans for many Wisconsin residents. However, residents are reminded to check their automobile insurance policy to make sure they have adequate coverage before renting a vehicle for any purpose. Auto insurance policies differ in the coverage they provide on a rental car, therefore, checking with the agent or company may save consumers from being stuck with overwhelming costs if an accident should occur.

Consumers have a number of options to consider when renting a car for personal use. These include coverage options offered by the personal auto insurance companies, credit card companies (on certain gold or platinum cards) and rental car companies.

Wisconsin car rental companies must provide written notice informing customers of their rights and potential liability. The car rental company may offer a Collision Damage Waiver (CDW). A CDW is not insurance; it is a contract offered by the rental car company. The contract shifts liability for collision damage from the person renting the car to the car rental company. Collision damage to the rental car is any damage resulting from an accident.

The CDW contract protects only the person signing the rental contract. Other persons not mentioned on the CDW are not covered when driving the rental car. It is important that all potential drivers sign the car rental agreement. In addition to the CDW, car rental firms typically offer coverage for liability, personal property and medical expenses.

If you currently have an auto insurance policy with collision coverage and comprehensive coverage and you are renting a car for personal use only; the damage to a rental car is usually covered under your personal auto insurance policy. Therefore, the decision on whether to buy a CDW from the car rental company will depend upon your personal situation and other coverage you may already have.

However, there are many cautions to consider when renting a vehicle. If the car is damaged, the rental car company may immediately charge your credit card for an estimate of the ultimate loss. The company may also charge for actual lost revenue while the car is being repaired or replaced. Even if you purchase the CDW contract, there will be situations that are not covered. Examples of this include driving on surfaces not intended for use by a car or leaving the car unlocked. The exceptions to the CDW are provided when a CDW is purchased.

Your personal auto insurance policy will cover some of the situations not covered by the CDW, but will have its own limitations. There will be a limit to the length of coverage provided by the personal auto policy. Your policy most likely will limit the payment to the value of one of the vehicles listed in your policy, which means that there will be an additional expense if a more expensive rental car is damaged. Also, your policy might expect that all drivers of the rental car have signed the car rental agreement. If you have specific questions about your auto insurance policy, you should contact your insurance agent.

When renting other vehicles--moving vans for personal use or vehicles for business purposes--you are not covered under your personal auto insurance policy. You should discuss coverage for this type of vehicle rental with your agent or insurance company beforehand and compare alternatives to the CDW.

If you do not own a car but sometimes rent one for vacation purposes you may be able to purchase a non-owners liability policy through an insurance company or agent. This is a liability-only policy that covers the policyholder's negligence when driving a car that the policyholder does not own. Even though the liability coverage is very important, the non-owners liability policy will not cover damage to the rental car. Ask your insurance agent if collision and comprehensive coverage is available for your situation.

It is also important to read the car rental contract carefully before renting the car. Remember that different car rental coverage and laws apply to each individual state, and most coverage does not apply outside the United States and Canada. The best way to avoid any surprises is to ask your insurance agent or company what type of coverage you have under your own personal auto policy, what the deductible is and what is not covered. Also, let the agent know what type of car you intend on renting, what it will be used for and who will be driving it.

Consumers can contact OCI with any auto insurance complaints, to find out more information on insurance when renting a car, or request a 2001 updated version of the Consumer's Guide to Auto Insurance at 1-800-236-8517 or at http://oci.wi.gov/oci_home.htm.

Consumers can also contact the Department of Agriculture, Trade & Consumer Protection if they experience problems with a car rental company at 1-800-422-7128 or http://datcp.state.wi.us.