Essential Facts About Rental Car Insurance Policies

A car rental agency is naturally protective of its assets. People may not drive as carefully in a car they don’t own, which leads to accidents. Because the agency needs the damage repaired or the car replaced, it generally recommends renters buy its provided insurance policy.

When you rent a car, though, you may wonder if you need to buy this policy or if your existing policy will cover the rental.

“The answer is yes and no,” said State Farm agent Pam Hansen Alfred. “Are you renting in the U.S.? At State Farm, we don’t extend coverage to any country except Canada and 25 miles into Mexico. Otherwise, the way it works is, if you have comprehensive and collision on a vehicle, that coverage will extend to the rental car if you have a claim.”

For instance, Alfred recently had a client whose rental car was stolen, a situation that a comprehensive policy would pay for after a deductible. Similarly, if you were in an accident or your windshield was damaged, the cost of any repairs would be covered after you paid your deductible.

Beyond these situations, though, you should discuss a couple of unique areas of car rental insurance with your agent to ensure you’re covered.

Loss of use

While your insurance will cover damage to your rental car, you may be on the hook for other expenses if a car rental agency experiences loss of use.

“If you wreck a vehicle and they can’t rent it out, they charge you for the amount of time it is in the shop as though you were still renting it,” Alfred said. “This cost would not automatically be covered by your car insurance. But you can add a coverage under your State Farm policy called unowned auto liability and

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Springfield rental car agency owner faces charge of insurance fraud

Jordan Monroe, CEO of Urgent Rent-a-Car, at his office in Springfield on June 24.

Jordan Monroe, CEO of Urgent Rent-a-Car, at his office in Springfield on June 24.

The owner of a Springfield rental car agency has been accused of insurance fraud amid an investigation into the agency by the secretary of state’s office.

Jordan J. Monroe, 31, of Chatham, faces one count of insurance fraud, a Class 3 felony. The charge, filed Wednesday in Sangamon County Circuit Court, involves a claim made on or about Feb. 13, 2021, to National Interstate Insurance Co. of Richfield, Ohio.

Monroe could not be reached for comment Friday afternoon. Sangamon County State’s Attorney Dan Wright did not immediately return a request for comment.

Monroe is scheduled to make an appearance on July 14 in court.

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The charge comes as Monroe’s business, Urgent Rent-a-Car, 2730 Stevenson Drive, was being investigated by the state regarding state insurance requirements on rental vehicles.

The state requires rental car companies to have insurance from a company doing business in Illinois, with minimums ranging from $50,000 to $150,000 for bodily injury and property damage.

Henry Haupt, a spokesperson for the secretary of state’s office, confirmed last week in a statement that Urgent was under investigation.

“Illinois Secretary of State Police continues to investigate Urgent Rent-a-Car,” Haupt said. “The Illinois license plates on the company’s fleet rental vehicles (had) been revoked for failure to meet the state’s insurance requirements.”

At the front desk of its shop last week, Urgent displayed a copy of an insurance policy from National General Auto Insurance. The policy was effective in February. The policy in question involves commercial fleet insurance, typically designed to cover large quantities of cars for companies.

The company said an audit by the secretary of state’s office was completed

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