When you step up to the Rental Car Counter the Rental Agent is
going to ask you if you want to purchase insurance for the rental
vehicle. If you say no they will ask you to initial next to each
coverage that you decline. The decisions that you make in these few
moments could have a dramatic impact on your financial situation.
Deciding if you need to purchase the auto insurance offered at the
Rental Car counter before you arrive can keep you from incurring a
serious financial loss or wasting your money on insurance that you
already have or do not need. One of the questions that we are asked most
as auto insurance agents is "Do I need to purchase the auto insurance
offered at the rental car counter when I rent a car?" The answer to this
question is maybe. You may be able to provide coverage for the rental
car using insurance policies you already own or you may decide you need
to purchase additional protection. In this article we are going to give
you the information that you need to make these crucial decisions.
When
You Rent A Car There Are Several Ways To Secure Coverage For It Without
Having To Purchase Coverage At The Rental Car Counter.
Transfer
Coverage From Your Existing Auto Insurance Policy - If you are going to
be renting a car and you have an existing auto insurance policy you
should take your insurance I.D. card with you when you rent the car. The
car rental company may require it and it can save you a lot of time and
aggravation if you are pulled over by the police in your rental
vehicle. The coverage and deductibles on your own auto insurance policy
will automatically transfer to cars that you rent as long as you are not
using the rental car for business purposes or renting in another
country. You should check the declarations page of your personal auto
insurance policy to find out if you currently carry Property Damage
Liability, Comprehensive and Collision coverage. Make note of your
Property Damage Liability limit and your Comprehensive and Collision
Deductible. If you are renting a car in another country you should
definitely consider purchasing coverage at the rental counter as most
personal auto insurance policies only cover their owners in the country
where the policy was written.
Damages to your rental car will be
covered by the Property Damage Liability portion of your personal auto
insurance policy if you are renting the car for pleasure use. However,
if you were involved in an accident that is covered by your auto
insurance policy and your car is in the shop being repaired. Damages to
the replacement car that you rent will be covered by the Comprehensive
and Collision coverage portion of your personal auto insurance policy.
That means that you will have to pay the deductible for these coverages
if you damage the rental car.
Use Coverage Provided By Your Credit
Card - Most major credit cards advertise rental car insurance as one of
the benefits of owning their card. The truth is that the coverage that
these cards provide usually only pays after your personal auto insurance
policy limits have been exhausted and only if you used their card to
pay for the entire price of the rental. The level of protection with
credit cards seems to change on a daily basis so we recommend calling
your credit card company to determine your exact level of protection for
rental cars. When you talk to the credit card representative ask them
for information about Liability, Comprehensive and Collision coverage
for rental cars. It is best to get this in writing as it is not unheard
of to get several different answers from the same credit card company.
You should also ask if there are any exclusions. Many credit cards
exclude coverage for luxury or exotic car rentals.
Purchase A
Non-owned Auto Insurance Policy - If you rent cars frequently but you do
not have your own auto insurance policy you can save yourself a lot of
money by purchasing a "Non-Owned Auto" Liability policy. This policy
provides you with the same type of protection as the Excess Liability
coverage offered at the rental car counter. These types of policies
usually cost around $300 a year and will cover you when you are driving
any private passenger automobile. This policy only provides protection
for Bodily Injury and Property Damage Liability. It will not pay for
damages to your rental car so you will still need to purchase the
Collision Damage Waiver or use one of the coverage methods we discussed
earlier.
If you are unable to secure coverage by using any of the
methods listed in the previous chapter you should seriously consider
purchasing coverage at the Rental Car Counter. It can be hard to get an
honest advice about these coverages from the rental car agent because
they are paid a commission every time they sell it to you. Don't worry;
we have provided you with all of the help you need below.
Collision
Damage Waiver (CDW) - This protection is also called the loss damage
waiver (LDW) by some rental car companies. It is often referred to as
insurance but this is incorrect. It is actually a waiver of
responsibility. When you purchase this protection the rental car company
waives your responsibility for damages or theft of the rental car. If
something were to happen to the car you would simply file a quick claim
form when you returned the car and the rental car company would pay to
repair or replace it. The price for this protection usually ranges from
$15 to $25 depending on where you are renting.
Caution: This coverage may become void if you cause an accident while breaking the law. This includes excessive speeding, driving off road or driving while intoxicated so be careful when you are driving a rental car or any car for that matter.
Caution: This coverage may become void if you cause an accident while breaking the law. This includes excessive speeding, driving off road or driving while intoxicated so be careful when you are driving a rental car or any car for that matter.
If you carry a minimum
limit such as $10,000 for Property Damage Liability coverage you may
want to consider purchasing the Collision Damage Waiver because this low
limit may not be enough to pay for repairing or replacing the rental
car. Remember you could also be held responsible for damages to other
peoples car's or property if you are involved in accident and found to
be at fault and Rental car companies will charge you for loss of rental
income for the car that you damaged. These are all important factors
that should be considered when deciding if you should purchase the
Collision Damage Waiver.
Another advantage to this coverage is
that there is no deductible. This can come in handy if you were involved
in an accident that is covered by your auto insurance policy and you
are renting a replacement car while your car is in the shop being
repaired. You see in this scenario any damages to the rental car would
be covered by your Comprehensive or Collision coverage which means that
you would have to pay the deductible.
Excess Liability - Car
rental companies are required by law in most states to provide a minimum
amount of liability protection for renters of their vehicles but this
is rarely enough to protect your interests if you seriously injure
someone in an accident. The liability portion of your personal auto
insurance policy will transfer to your rental car so you have adequate
limits of bodily injury and property damage liability on your personal
auto insurance policy we would not recommend purchasing this coverage.
This coverage would only pay after your personal auto insurance policy
limits are exhausted. This price for this protection is around $10 to
$13 dollars per day for 1 million dollars worth of excess protection.
Personal
Accident Insurance - If you or your passengers are injured in an
accident or as a pedestrian this coverage will pay for your medical
expenses and ambulance fees if needed. If you live in a "no fault"
state, have health insurance or carry medical expenses coverage you
probably already have this protection and do not need to buy it from the
car rental company. Check your auto insurance and health insurance
policy to find out for sure. A claim for this type of loss on your
personal auto policy will not cause an increase in price so if it is
covered on another policy there is really no benefit to buying it from
the car rental company. The price of this protection usually runs from
$2 to $5 a day depending on where you rent.
Personal Effects
Coverage - This is coverage for theft of you or your passenger's
personal items such as cameras, camcorders or Laptop computers. This
protection may also be provided on your homeowners or renters policy if
you have one so you may not need to buy it from the rental car company.
However, homeowners or renters deductibles are usually $500 or higher
and all of your articles may not be covered. Check the declarations page
of your policy for your deductible and the exclusions section to find
out if the items you are taking with you are covered.
One of the
benefits of purchasing this coverage from the rental car company is that
you usually do not have to pay a deductible. You simply file a claim
when you return the rental car and you are reimbursed for the theft of
your items. You will usually need to prove ownership of the items that
you claim were stolen by providing the rental car company with receipts
or other proofs of ownership. You should also ask the rental agent if
any exclusions apply to this coverage prior to purchasing it. The price
for this protection is $2 to $5 dollars a day.