Renting the good life — and insuring it

Linda Melone

Imagine arriving at a soiree in a Lamborghini or jetting off to the Caribbean island to unwind. With luxury rentals, you don’t have to be a millionaire to live like one, but you do need the right insurance.

Without insurance, losing a diamond necklace or damaging a car on a remote island can mean paying thousands of dollars out of pocket.

Experts offer these tips for keeping your elite rentals covered.

Fancy wheels

For $5,500 a day, you an impress your friends by showing up to the bowling alley in a Lamborghini Aventador (retail price: $375,000). Or for considerably less, $400 to $500 a day, you can tool around town in a luxury BMW or Porsche.

Whether you’re getting behind the wheel of a Lamborghini or Porsche, your insurer may or may not cover you, says Ryan Hardgrave, an agent with the Insurance One Agency in Texas. If your insurer doesn’t normally insure a Lamborghini, it likely won’t cover you if you rent one. If that’s the case, you’ll want to buy additional insurance offered through the dealership or rental car company, Hardgrave says.

In general, all motorists must carry full coverage (liability, comprehensive and collision) on their own auto insurance to be able to rent a car, says Loretta Worters, a spokeswoman for the Insurance Information Institute. In most cases, whatever coverage and deductibles you have on your own car would apply to the rented car, provided you’re using the rented car for recreation. Keep in mind that you can pay for insurance sold by the rental car company, or your credit card issuer may offer rental car insurance as a benefit.

Liability limits must meet a state’s minimum requirements; liability coverage is mandatory in every state except New Hampshire. The insurance industry recommends at least worth of $100,000 coverage per person for bodily injury, $300,000 per accident for bodily injury and $100,000 per accident for property damage, Worters says. In insurance lingo, that coverage would be written as 100/300/100.

You’ll also need a clean driving record, as dealers and rental car companies balk at letting a high-risk driver head out in one of their cars.

Bling it on

Renting a sparkling diamond necklace for a soiree won’t cost as much as renting a Lamborghini, but losing the jewels can cost you if you’re uninsured. Fortunately, many jewelry renters such as Adorn.com include insurance in the price of their rentals.

At Adorn, prices start around $150, including insurance (which covers lost or damaged stones) to rent a diamond necklace worth at least $15,000. Other sites offering lower-priced jewelry, such as bagborroworsteal.com, also include insurance as part of the rental price, but it covers only cleaning and damage, not loss or theft.

If you rent through a website like Adorn.com, shipping insurance covers the jewelry while it’s in transit without a deductible, Worters says. While the jewelry is in your possession, it continues to be insured. However, if you file a claim, it’s subject to a deductible equaling 33 percent the jewelry’s retail value.

Rental companies also typically require a security deposit, usually equaling 5 percent of the jewelry’s retail value, Worters says. That amount is put on hold on your credit card while you’ve got the jewelry.

You also may be able to add a rider, called a personal articles floater, to your homeowner’s insurance in case something happens to the jewelry. After all, 33 percent of the retail value can be costly — nearly $9,000 for a $27,000 diamond necklace.

Make like Gilligan

When you’ve had enough of work demands, you can leave it all behind and hide out on your own private island. At PrivateIslandsOnline.com, rental options range from Alaska ($5,000 a week) to Fiji ($3,500 a week).

Brian Kane, owner of Donnelly & Sproul Inc. Insurance in New Jersey, warns that your American home insurance policy won’t protect you if the rented island is not in the United States. Island rentals outside the United States require personal liability coverage from a specialty insurer like Lloyd’s of London. “The cost depends on what you plan to do on the island, whether it’s just your family or 50 of your closest friends,” Kane says.

If you’re renting a house on a private island just for your family for a week, you can expect to pay about $1,000 for the extra liability coverage, according to Kane.

Live like a celebrity

The rich and famous may buy up homes like Monopoly properties but often have little time to spend in them. For instance, movie star Anne Hathaway has stopped living in her 7,750-square-foot duplex in Manhattan. But you can rent Hathaway’s pad for $65,000 a month. In Palm Springs, Calif., you can rent an array of celebrity homes for $895 a night or $9,740 a month, according to RentalsPalmSprings.com.

So, what happens if you break a vase in one of those homes or spill wine on the carpet? The personal liability portion of your home insurance policy will cover the damage, according to Kane. Likewise, the personality liability coverage will pay your legal expenses — up to a set amount — if the landlord sues you for any damage that’s done.