I live here in New York and usually rent a car whenever my own car is in repair. Do I need to have a separate insurance for rental cars?

Anna

Manhattan, NY

Rental car insurance is always a confusing matter for most of us. Renters buy supplemental rental car insurance for $20 to $40 per day for fear of what might happen if they refuse. What many of us do not know is that additional rental car insurance is mostly unnecessary if you have sufficient car insurance coverage. Before renting a car in New York, it is good to call your car insurance agent. Inquire about how much coverage you have on your car.

Generally, whatever deductibles and coverage you have on your car insurance would apply to your rental car. If you have removed the collision or comprehensive coverage on your car insurance policy, your rental car will not be covered if it was damaged or stolen.

Ask your agent if your insurance provider covers towing fees or administrative charges. Some car insurance companies cover these for their policyholders and may prove to be less expensive since you would not need to buy full coverage through the rental car company.

The next thing to do before renting a car is to call your credit card company. Companies like Visa, American Express and Discover may shoulder comprehensive damages to most vehicles. MasterCard offers secondary coverage to its platinum and gold card holders.

My teen got his driver’s license 2 years ago. He is now in college in another state. To my understanding, I was not required to inform my car insurance company about my son so I haven’t told them yet and besides they never asked me. Just recently, we purchased a new vehicle, and my son’s license came up. I got a bill from my insurance company backdated from 7/05-7/07 (what we would have paid) totaling about $1100. I really don’t mind paying more now, but backdating premiums don’t seem right. I am in Brentwood, NY.

Abby

Brentwood, NY

The New York Insurance Department allows insurance company to automatically include children of policyholders to their insurance. This is because in the event that bodily injury or property damage occurs due to that teen’s operation of the vehicle, insurers are permitted to use classifications that reflect a possible exposure for liability on the part of the insurer such a “limited use” classification. However, this reflects the reduced likelihood of an incident due to “occasional” operation by a youthful driver, and is rated lower than if that person were the “principal operator”. And in general, children living away at school (over 100 miles) are eligible for a reduced rate.

If your insurance carrier in Brentwood, NY bills you for prorated insurance charges, legally speaking there is no basis for doing this. However, your insurance company will not do so if your state does not allow it. In the first place, you should have informed your insurance company of your son’s licensing status when he first began to drive. Most insurance companies require their policyholders to list all household licensed drivers and to notify them once their child becomes licensed. Failing to do so could be found as a form of insurance fraud or misrepresentation.

It would be best to contact the NYS Insurance Department to find out for certain if receiving back charges is allowed by your state. The consumer division of this department should be able to inform you if you have a choice or not to pay these charges.

Tags: auto insurance premium, automobile, car insurance rate, teen insurance