ZipCar Insurance

[Bruised_Pepper]

I'm selling my car and considering signing up for ZipCar for any car needs.  I'm considering this over normal renting because:

- I get a subsidized membership rate through work
- My potential rental needs would be for a couple hours, in-town sort of stuff.  For long trips I would just take a plane/train.  I figure ZipCars are more cost-effective than renting from a regular rental place for rentals of a few hours. 
- There are 2 ZipCars located right outside my office (I can practically see them from my window) and there are 3 more about 5 minutes away (walking, of course)

The one thing I'm hung up on is the insurance.  There are some horror stories about shoddy coverage from a few years ago, but it sounds like they merged with another company recently and strengthened their insurance policies.  From what I can tell they offer $300,000 coverage (I can't tell if it's liability or combined liability/collision) with a $750 deductible per incident.  I also know that certain credit cards offer some collision coverage (with plenty of limitations of course).  Anybody with more experience with this company/insurance have some advice/analysis?  I would just want to make sure I could be comfortably covered before I even consider using the company. 

[seattlecyclone]

I have used Zipcars a few times, mostly larger vehicles for hauling stuff that was too big to fit in our car. The service works well overall. The frustrating thing about it when I used it was that the larger vehicles (pickups, SUVs, minivans, etc.) were rarely available on weekends if you were looking just a few days beforehand. Your area may be different in that regard, or they may have purchased more vehicles to better meet demand.

Anyway, I have no firsthand experience dealing with their insurance since I never crashed a Zipcar. Your description of it sounds about right: $300k liability insurance (combined personal injury and property damage liability). The $750 figure is a "damage fee" rather than a deductible. I'm not sure what the difference is, except that maybe if you somehow managed to run someone over without scratching the car, the liability insurance would pay out and you wouldn't owe Zipcar a cent. Their FAQs state that credit cards will sometimes cover the damage fee in case of an accident, but you'll have to call your credit card company beforehand to verify.

[Bruised_Pepper]

So, I'd have $300k of liability insurance with ZipCar, plus some collision coverage if I use the correct credit card.  If the credit card provides enough collision coverage without fine print limitations, I'd pretty much be covered for accidents, right?  But what about comprehensive coverage? 

[jfer_rose]

Yup, this is how I understand ZipCar's policies. Each time you reserve a car you have the option of paying a small fee for additional insurance that would waive the $750 damage fee should you damage the vehicle.

I only rarely use Zipcars but I had been getting that additional insurance for each trip. Then, for a recent reservation I decided that was not very Mustachian of me to pay extra money for a low probability event. I mean, I had never damaged a car in my life. Yup, that's the time I damaged the Zipcar. 100% my fault. And yup, that cost me $750. (Especially frustrating was the fact that the actual damage done was about $759. Ugh.)

[Dr. A]

Until the last month I have not owned a car and have rented both zipcars and traditional rentals regularly. Overall, I found that Zipcar was preferable for rentals up to 24 hours, and beyond that a traditional rental was cheaper. You say you won't drive to distant locations, but if you ever do, remember that Zipcar charges a hefty fee per mile over the 150 or so they give you per day.

Zipcar previously only insured up to the state minimum, and nobody really noticed for a while. This is probably the era your horror stories come from. The $300,000 liability coverage they provide today is much more reasonable, though someone with a high net worth may want additional protection.

I haven't had the misfortune of making a damage claim to a credit card, but this is what I do know. The card provides "secondary" insurance, meaning they do not get involved until all other insurances (your own, the rental company's, etc.) have paid out. They generally have significant deductibles ($1,000 maybe) and cap coverage at $25,000 or $30,000. Rental companies (and, I would assume Zipcar, now that they are owned by Avis) frequently try to claim "loss of use" damages, meaning the money they could have made by renting the car you wrecked while it's in the shop. The card companies generally either explicitly state they don't cover these fees, or deny liability for them after the fact. I suspect in the case of Zipcar, because the $750 damage fee is probably less than the credit card's deductible, the card's coverage never comes into play.

If you do an occasional traditional rental, keep in mind that you no longer have liability coverage under a personal insurance, and those companies only cover to the legal minimum unless you buy their supplemental liability policies. I always took supplemental liability coverage when I rented as a non-car-owner.

The auto insurance companies also have "non-owner" policies, but those are only worthwhile if you rent a lot (I found I would break even at 30 rental days per year).