Rental Coverage (or Extended Transportation Expense-ETE) is a Physical Damage coverage that can be purchased on your auto insurance policy. ETE comes into play if you are involved in an At-Fault accident (an accident you caused) and need a form of transportation while your vehicle is out of commission.
ETE is limited to 30 days max and can be purchased in different increments. I have seen the increments as low as $20/day and as high as $200/day. The most common amount is $40/1200. That’s $40 per day with a limit of 30 days or $1200 max. This amount will put you in a fine replacement for a few days while your vehicle is being repaired.
Who Needs ETE Coverage:
If you are in a household with the same amount of cars as drivers than you want to consider ETE coverage. For example, say you have 4 drivers and 4 cars. Suppose one of those cars were to be in an accident. What would the driver of that car do without their vehicle? Chances are you don’t want to rely on people giving rides and you may not want to borrow Grandmom’s LeSabre. ETE coverage makes sense for at least a few of the vehicles in this household. You must have comprehensive and/or collision coverage on a vehicle in order to purchase ETE coverage. Do you need comp/collision coverage? Find out here.
Who Doesn’t Need ETE Coverage?
Any household that has more vehicles than drivers. If you have 2 drivers and 3 cars than you probably don’t need ETE coverage UNLESS one of those vehicles in unreliable.
What’s the Cost of ETE Coverage?
In most cases the cost of coverage of $40/$1200 is about $20-$25/year. In some cases it’s higher, in some cases it’s lower.
What if you are in a Not-At-Fault Accident?
If someone hits you and causes your car to be undriveable then the other insurance company will pay for your rental regardless of if you have ETE coverage on your policy or not. They should pay to put you in a car that is similar in like, kind and quality of the vehicle you were driving. Need more information regarding Not-At-Fault Accidents? Read this.
What to watch out for:
- Make sure you are not under insured with your ETE coverage. DO NOT take less coverage so you can save $5.00. IT IS NOT WORTH IT. If you need the car for an extended period of time, you will be out a lot of money if you have less than $40/$1200.
- If you add a vehicle, consider dropping ETE coverage. If you now have 3 reliable cars and only 2 drivers than you don’t need ETE coverage. You can drop it and add it again if you sell one of the vehicles at a later date.
- Do I need insurance on a Rental car? Your comp and collision deductibles will transfer over to a rental car. If you don’t have comp and collision on any of your vehicles than you will need to purchase the insurance from the Rental car company.
If you live in the Western Philadelphia suburbs I would recommend a local company, Kulp Car Rentals. Their service is second to none in the industry.
Insurance on a rental car company while your on vacation is a different topic. Before going on vacation, I would recommend discussing with your agent where you are going and who you are renting with. This will help you decide if you should purchase the insurance that the Rental car companies are offering.
Do you have any horror stories from Rental car companies? Have you ever been in an accident while in a rental car?