My head hertz.

May 17, 2009 7:19 AM

More rental car insurance confusion. I live in NYC so have no car/no insurance. I can't tell if I need to buy what the rental car company is selling.

I'm renting a car for five days in Georgia this week. I got the car through Orbitz--the rental car agency is Hertz.

This previous question indicates that I need to purchase additional insurance, since the insurance my credit card provides is not liability. But this previous question indicates that Hertz DOES provide primary liability insurance up to a state's limit (which in Georgia appears to be 25/50/25).

Hertz's website says this: On all rentals commencing in the state of Georgia, Hertz will provide secondary liability protection. The renters personal/business insurance is used to its limits. In the event of no applicable liability protection, Hertz, by default, becomes primary. Hertz will become primary if the Liability Insurance Supplement - LIS - is purchased. LIS is available at USD 12.95 per each full or partial day of rental. I take that to read that they provide it at no cost--but you can purchase it to make their insurance, not yours, the primary. And if you don't have insurance, it's provided automatically.

But calling the location itself to verify that was not helpful, as the girl on the phone simply said, "If you don't have insurance already, you need to buy it." I'll be calling their corporate line as well, but it certainly appears that if I'm happy with the 25/50/25 coverage they're required to offer, I don't in fact need to purchase any insurance through them.

However, I haven't dealt with car insurance in about seven years and all this back-and-forth has me questioning reality in general. Am I reading this right? If you were in my shoes, would you pay for insurance through Hertz? (It's not a huge amount but I really don't want to pay for something they'd be providing me with anyway.)

Bonus question: either way, does that insurance cover me and a secondary driver (assuming I list that second drive with Hertz), or just me?

posted by peanut_mcgillicuty to travel & transportation around New York, NY (13 answers total)

The material you quoted doesn't leave much room for confusion -- you must purchase Hertz's insurance to have liability coverage.
posted by kindall at 7:23 AM on May 17, 2009

The material you quoted doesn't leave much room for confusion: "On all rentals commencing in the state of Georgia, Hertz will provide secondary liability protection. [...] In the event of no applicable liability protection, Hertz, by default, becomes primary."

If I were you, however, I would check with an insurance person and see if you can buy a separate, short term liability policy. My regular car insurance costs me ~ $2 a day. I would suspect a temporary policy from an outside agency would leave no room for confusion, and not cost too much. (Not for nothing, 25/50/25 coverage isn't bad, but a middling to bad accident will eat that up pretty quickly and you'd be on the hook for anything above that. A separate high limit policy would surely be cheaper than Hertz's, and give you greater protection.)
posted by gjc at 7:34 AM on May 17, 2009

I did some more searching on their website, and think I've answered my own question--they do in fact provide this at no cost.

From here:

Question
Is insurance included in the rate quoted?
Answer
The provisions of liability protection vary from state to state and country to country. In the U.S., Hertz provides at no extra charge, on either a primary or secondary basis, depending on the state (except for California), basic liability protection for bodily injury and property damage to third parties within limits when the car is used in accordance with all terms and conditions of the rental agreement.
posted by peanut_mcgillicuty at 7:34 AM on May 17, 2009

gjc, thanks for the recommendation--I will also check with my rental insurance agent. Is that the type of thing you can turn on and off when you're likely to be driving? Even at $2 a day, I don't want to pay $600 a year when I'm driving maybe twelve days a year.
posted by peanut_mcgillicuty at 7:37 AM on May 17, 2009

Clearly there is room for confusion, kindall. "In the event of no applicable liability protection, Hertz, by default becomes the primary." That means if you don't have your own insurance, Hertz will be the primary insurer. And this insurance covers all drivers you listed with Hertz on your rental contract.

In the event of the claim, Hertz will want to make sure there is no one else (like your auto insurance company) has primary coverage. If there is none, like in your case, it will pay out. When you actually rent the car they don't ask about your insurance situation, they only give you the keys and send you on your way. They wouldn't let cars off their lot without being compliant with the state liability laws.

The LIS insurance is an add-on if you feel you have assets to protect larger than the minimums required by law. Remember, the minimum required by law is the minimum. If you're in a terrible accident, your liability may be greater than the minimum. Hertz sells the LIS $1 million policy for people worried about it.

Unless you're feeling terribly unlucky, you don't need the LIS.
posted by birdherder at 7:45 AM on May 17, 2009

Note that basic liability protection for bodily injury and property damage to third parties doesn't cover damage to you or to the rental car.
posted by jon1270 at 8:19 AM on May 17, 2009

"In the event of no applicable liability protection, Hertz, by default becomes the primary."

Yes, and then you read the next sentence, which says, "Hertz will become primary if the Liability Insurance Supplement - LIS - is purchased. "

Obviously they are not going to give you insurance without you paying for it! They will be the primary insurer, since you don't have insurance of your own, but you don't have a policy.
posted by kindall at 8:29 AM on May 17, 2009

What they're basically saying is: "If you don't have liability protection, Hertz will provide it. This costs $12.95 a day."
posted by kindall at 8:41 AM on May 17, 2009

The renters personal/business insurance is used to its limits. In the event of no applicable liability protection, Hertz, by default, becomes primary. Hertz will become primary if the Liability Insurance Supplement - LIS - is purchased.

I think this language refers to which company has to pay first--If I have insurance, my insurance company has to pay first, then Hertz's automatically-provided insurance kicks in, unless I purchase insurance from Hertz, in which case theirs becomes the primary. If I don't have any insurance, theirs becomes primary.

Obviously they are not going to give you insurance without you paying for it!

That's what I thought, but that question from January indicates that Hertz in particular does in fact do that, which is what started this whole search. It seems they build this into the cost of the rental, per my first update.

Note that basic liability protection for bodily injury and property damage to third parties doesn't cover damage to you or to the rental car.

Yes--this is where my credit card-provided insurance kicks in. I've already verified that with them, and their language was very easy to understand. It's the legally-required liability insurance I'm concerned with here, and which confused me so badly.

I'm still going to check with Allstate (who provides my rental insurance) to see if they can offer me higher coverage at an acceptable price.
posted by peanut_mcgillicuty at 9:10 AM on May 17, 2009

kindall, you are wrong, plain and simple.

The state of Georgia, like most (all?) states, requires mandatory minimum liability coverage for drivers. If Hertz did not provide that legally required coverage they would not be able to rent to you.

Hertz has no ability to independently verify that you have liability coverage. If you lied to them and said "yes I do" and it turned out you did not, they would have put their car on the road with an uninsured and thus illegal driver and would incur significant liability onto themselves. Secondary insurance which only becomes primary when needed is the safest way around it for them. It is no coincidence that the coverage limits vary by state and match the state's required minimums.
posted by aguy at 10:35 AM on May 17, 2009

What aguy said. The car rental comes with the minimum state required liability coverage. Rather than an insurance policy, car rental agencies often post a bond with the state in which the car is registered to satisfy the state requirement. If you were pulled over, you'd show them the proof of bond/insurance in the glove box or the rental agreement, not your private insurance if you had it. Hertz cars would not be allowed on the street without proof of financial responsibility.

The reason Hertz mentions on basic coverage it is secondary is that in the event there's another insurance company to pay Hertz wants you to know your insurance company will pay first, then Hertz. On the $12.95 coverage your private insurance won't be involved at all (unless your damages go above the $1m coverage). I think also that Hertz may not be super clear with this language (or the language about the LDW and other waivers so that people just pay the money).

I've rented extensively from Hertz and when I had an accident Hertz sent a bill to me because they didn't know if I had insurance (It doesn't come up in renting a car -- they want your license and a credit card to pay for it). In the letter they mentioned that my auto insurance may cover the amount or the credit card company insurance may as well... or I could enclose a check for the amount due. In my case I reported it to the insurance company and told Hertz to contact them.

So if I were you, I'd decline any additional insurance and enjoy your trip.
posted by birdherder at 10:52 AM on May 17, 2009

Can I just pipe in to suggest that you contemplate buying the LIS. While I agree with the assessment above that the basic Georgia required insurance will be included in your rates, the coverage appears low (which makes sense for a mandatory policy). As you noted, unless you are "unlucky", you can get away with not having additional insurance. But, as you note, you don't have any secondary insurance yourself. This means that if you ARE unlucky, you will become personally liable for any damages/injuries above the included coverage. Frankly, even $1M seems like a low coverage amount for the LIS, but certainly better than the minimums.

I am not an insurance person, and though I am a lawyer, I am not your lawyer, nor do I practice in this area of law, and this is not legal advice. I have, however, heard enough horror stories about un/under-insured people.
posted by birdsquared at 11:52 AM on May 17, 2009

Even if Hertz provides the basic insurance, a matter on which I stand corrected, that doesn't mean they won't come after you for reimbursement if they have to pay out.
posted by kindall at 6:29 AM on May 18, 2009