Life behind the wheel can be pretty unpredictable; especially when climbing into the driver’s seat of a rental car. Even if you’re a driver with a clean record, accidents happen. Sometimes costs exceed that which is covered in a primary insurance policy. This is when secondary car insurance can be a massive benefit, kicking in after a maximum payout is made on your primary policy. There are a few key types of secondary insurance that may benefit you. Read on for your options below.
Types Of Secondary Insurance
Provider-Based Insurance
There are two major types of secondary insurance to choose from. The first being secondary auto insurance from a completely separate provider. For example, if you’re with Progressive you may seek secondary coverage with Geico. Some companies offer secondary insurance as a type of shelter policy. They act as a supplementary cushion between you and the high cost of an accident. With this type of coverage, you choose a premium based on a monetary limit. Secondary coverage through an insurance provider is perfect for accidents that cause major injuries and in which you are at fault. Secondary insurance is key if you have a very basic auto insurance policy.
Credit Card Insurance
Credit card insurance automatically kicks in when renting a car. Unlike provider based secondary insurance, credit car rental insurance is free and you don’t need to choose policy benefits. When you rent a car using your credit card, the rental car insurance kicks in as soon as the card is processed. In the event that you’re in an accident, your auto insurance company will pay the claim, then the credit card company will reimburse your deductible and other costs not covered by your policy. Unfortunately, not every credit card company offers secondary insurance or rental car insurance.
What’s Covered and What’s Not?
What is Covered
Though coverage can vary based on your credit card company or insurance provider, most will assist in a few key areas. Credit card insurance does not pertain to every area of protection and will not typically cover personal injury or personal liability. However, credit cards do typically cover collision in what is known as a loss damage waiver or collision damage waiver.
Most will also offer some form of damage or theft protection. Secondary coverage may also cover towing expenses should your car simply breakdown. Remember, since coverage is secondary, you will have to file a claim with your primary car insurance first. However, your secondary insurance will always pick up right where your auto insurance left off, including paying the tab for your deductible.
What Is Not
While secondary insurance can be a total lifesaver, it doesn’t cover the full run of things that can happen out on the road. Coverage options and regulations can also vary drastically among different states. The regulations connected to the types of claims being declared and factors such as neglect and permission. Neglect refers to you as the owner or primary driver of a car, lending a vehicle to a high-risk driver with a less than a stellar driving record.
As mentioned above, secondary insurance will not always cover injury or liability concerns. For example, if you destroy property other than the car you are driving or cause harm to others, you will not be covered. Should you be sued for something you did behind the wheel, coverage will also lapse. Thankfully, this is where your primary provider truly gets their moment to shine.
Depending on the circumstances, loss of personal belongings or theft within the vehicle may not fall under the umbrella of coverage. If your car was parked in your driveway, this could go to your homeowners or renters insurance. Credit card coverage can also fail to pay medical bills in the event of an accident, in this case, claims may be filed with your health insurance.