Questions and Answers
Three Common Questions about Auto Insurance
- When I rent a car, do I really need to buy the extra insurance they sell? It is very expensive! Does my credit card cover me at all?
- If I borrow my friend's car and get into an accident, does her auto insurance policy cover me?
- I left my laptop in my car, and it was stolen. Is this covered by my auto policy?
Question: When I rent a car, do I really need to buy the extra insurance they sell? It is very expensive! Does my credit card cover me at all?
Answer: The optional daily insurance commonly sold by the auto rental companies for physical damage is indeed expensive (usually $10 to $25 a day). However, we suggest that you seriously consider purchasing this coverage. In recent years, auto rental contracts have added “additional financial burdens” not typically covered by your auto policy or by your credit card.
Assuming you have a Massachusetts Auto Policy and that you have selected Part 5 (Optional Bodily Injury) and Parts 7 & 9 (Physical Damage - Collision and Comprehensive), then your auto policy will “follow” you and extend your current coverage to a private passenger rental vehicle in the United States, its territories or possessions, Puerto Rico or Canada.
However, your own auto policy does not cover the additional financial burdens for which rental car companies may charge, such as:
- Rental revenue lost while a car is being repaired or replaced. In some rental contracts, this amount can be charged to you regardless of whether an accident was your fault.
- Loss of “value” of the repaired rental car after an accident. Unfortunately, vehicles depreciate if they have been in an accident.
- Replacement cost of a totaled auto. Your Mass Auto Policy will only pay the Actual Cash Value (Replacement Cost less Depreciation) leaving you responsible for the difference.
Purchasing the optional daily insurance coverage from the rental company will cover you for these items. Note that terms of rental contracts vary from one company to another; we strongly advise that you read each contract closely before signing it.
Remember: When you rent a car, you are not only driving a vehicle you are unfamiliar with, but you are also often driving in an unfamiliar area. Both of these factors increase the likelihood of getting into an accident.
Question: If I borrow my friend's car and get into an accident, does her auto insurance policy cover me?
Answer: If you are not sharing a residence with your friend, and if you borrow her car only rarely, then you may be covered under the owner's policy even if you are not listed on it. However, if you are living in the same household or borrow her car more often, you must be listed on her policy or the insurance company may exclude you in the event of an accident.
Your friend’s Massachusetts Auto Policy will typically cover you up to the limits provided in their policy. There are some exceptions to this:
- If you are living in the same household, you are required to be added as a driver to your friend’s policy in order for coverage to apply. All licensed drivers in a household must be listed on each other’s auto policies.
- If you “borrow” the vehicle without permission, you will not be covered.
- If you do not live in the same household but you borrow her vehicle on “regular basis”, then you also must be listed on her policy as a driver in order to be covered by her Mass Auto policy. The problem is that “regular basis” is not specifically defined in the policy, which can lead to a dispute at time of the claim.
Question: I left my laptop in my car, and it was stolen. Is this covered by my auto policy?
Answer: Items stolen from a car are not typically covered by your Massachusetts Automobile Policy. However, your homeowner’s, condominium, or renter’s policy will provide coverage subject to your deductible which is typically $250 to $1,000. The amount you receive from your insurance company depends on the type of coverage you have.
Most homeowner’s, condominium and renter’s policies cover you for replacement cost but some provide Actual Cash Value only (Replacement Cost less Depreciation). Coverage for the contents of your car varies depending on options you may have selected on your insurance policy. For example, if you have scheduled a particular item (typically jewelry, electronics, or other valuable item) on your policy, then that item will be covered and no deductible will apply.