When renting a car for business or pleasure, having rental car insurance lets you enjoy the experience without fear of financial catastrophe. Terminology and coverages will vary among companies, so read the fine print. In general, the coverages include:
Collision and Personal Loss. Collision and loss insurance may protect you from paying for your rental vehicle's accident damage and other losses like theft. Sometimes your own automobile insurance policy will cover collision to a rental. Check with your insurance company. As the name implies, "personal injury protection" covers your own party for medical expenses.
One company's "personal accident and effects insurance" (PAE) protects against injury and loss of personal property. You may enjoy this protection while not even in the vehicle. You can choose protection against uninsured or under-insured motorists that cause you bodily injury or property loss.
Liability Coverage. Liability insurance applies to property and medical damages you cause others. In some rental situations, the rental car insurance will cover your liability as the "primary" protection before making your own insurance pay out. With other companies and jurisdictions, the reverse may be true.
Extra Coverages. Rental companies also frequently offer insurance against miscellaneous costs. For example "roadside plus" offered by one auto rental company covers the cost of inconveniences, including fixing a flat tire, towing, jump starting, and retrieving keys locked in the vehicle.
Beware of Exclusions. Most policies have "exclusions" that nullify the insurance, such as suicide attempts, criminal actions and racing.
Insurance distinguishes itself as a product you buy but hope never to use. To provide peace of mind, purchase optional personal and liability protections to cover what your own insurance policies won't. This will help you relax so you can concentrate on driving instead of worrying about an unexpected bill.
At the Counter
Rental car company representatives help customers select their desired rental vehicle and the terms of the rental. They also add some recommended rental car insurance coverage to the package of paperwork that the customer fills out at the counter before taking the vehicle. However, they do not always go into detail about what they're recommended insurance covers, whether it's optional or mandatory, and how a driver can figure out their real liability.
Insurance "Waivers"
Some rental companies called their insurance "waivers" because they let drivers waive liability by purchasing the company's rental insurance options. These options are often called loss damage waivers (LDW) and collision damage waivers (CDW). It's important to know that these are not really considered "insurance products" so much as specialized options provided by a rental car company. The waivers take the place of a driver's own collision and comprehensive insurance. That's why, to figure out if they are needed, a driver has to know what insurance he or she currently has in place for routine transportation needs.
What Needs to Be Covered
For any of those car rental customers who are thinking about "taking their chances" on less than sufficient coverage, the most important consideration is thinking about the actual value of the rental vehicle. A driver who's used to operating older used cars may not realize that the value of their rental vehicle will generally exceed $10,000, and as a result, they can be liable for some pretty steep fees in the case of any accident or other event. Getting the coverage you need for a rental car is not a rip-off as long as you're not overpaying.
The Freedom of Choice
The rental car representative will tell you, when asked, that there are alternatives to getting the rental company's insurance. What you can do is call your own insurer and add comprehensive and collision coverage for the rental car to your existing policy for the specific duration of the rental. Drivers who take this route often find that they are saving a lot of money with just a couple of quick phone calls.
Your Credit Card Company
If you pay for your rental car via a credit card, you may have added insurance coverage provided freely or at a discounted rate by your credit card company. Credit card insurance coverage can vary greatly between companies (concerning car/property damage and medical liability coverage), so you should always know the details of your credit card company's policy.
Which to Choose From
In order to make the best decision regarding rental car auto insurance, you have to consider your specific situation. If you already have good collision and comprehensive protection from your regular auto insurance plan, it would be silly to also pay for LDW's and CDW's from the rental car company. However, if you do not have collision/comprehensive protection from your auto insurance plan, or if you don't have any auto insurance at all, you should surely purchase insurance from the rental car company, or use the insurance offered by your credit card company, if applicable. Additionally, if you do not have home-owner's insurance, you may want to purchase the "theft protection" option offered by most car rental companies.
Just the Basics
Rental car insurance coverage may not be included in your regular auto insurance policy. If you rent a car without this in your own policy, you may want to get temporary basic rental car insurance just to make sure you are covered. If you are involved in an accident with a rental car, the damages will normally be higher since it isn't your car.
Other Ways to Get Coverage
If you're planning on renting a vehicle for an extended period of time, you should consider purchasing a non-owners car insurance policy. This type of policy will provide coverage for you and the vehicle when you're driving a one that you don't own.
Also, there are many travel insurance policies that provide car rental coverage If you are planning on taking a vacation, ask the travel agency about policies available and make sure they include rental car coverage.
Check with Your Company's Corporate Travel Policy
If you are working with a company that has a lot of traveling involved then do check to find out whether you are offered complete coverage. The company also covers all traveling employees under a separate travel and protection plan.
Please note that not all car rental insurance is bad. A few like the collision damage waivers are really essential to protect you when you use the rental car. As a driver, you are already protected with your personal car insurance, but clarify the exact details before you refuse any car rental insurance or you will have to bear the damage charges from your pocket.
Additional Benefit of Rental Cars Insurance
For people who do not have home-owner's insurance, the theft protection option offered by many rental car companies is an excellent option to consider. Without any other type of insurance to cover one's stolen property, anything stolen from a rental car may be lost for good. However, if you choose to purchase some form of theft protection from the rental company, you'll be covered if you personal property is stolen from the rental car.
Other Online Coverage
Many car rental companies allow you to accept or reject the car rental insurance at the time you complete the rental document. So if you rent a car online, you can accept the CDW, the liability coverage, personal accident insurance and personal effects coverage when you rent the car.
However, if you decline the coverage online, then you will almost surely get the sales pitch for the insurances again once you arrive at the rental counter.
You can buy car rental insurance online, and sometimes you can save a lot of money doing so. Just be sure you aren't duplicating coverage provided by your own auto, home, or health insurance.
Why You Shouldn't Get Rental Car Insurance
Many consumers and experts will warn others about opting for rental car insurance when "going to the counter." Here are some of the top reasons to skip these kinds of temporary policies, and make a quick call to your own insurer instead.
These are some of the basic things to keep in mind when going to the rental car counter. If possible, have a conversation with your insurer well in advance of the rental date, and you will most likely find that a quick phone call is all it takes to purchase the same rental insurance coverage at a dramatically reduced cost.
Car Rental Car Insurance: To Buy or Not to Buy
If you agree to it, could you be overprotecting yourself and wasting money? Or are you taking a huge chance by not purchasing it? Unfortunately, there is no simple yes or no answer to this question.
Should You Get Car Rental Reimbursement Coverage?
Rental reimbursement coverage is an add-on to auto insurance that often gets overlooked due to lack of knowledge about its benefits and cons. Before you decide whether rental reimbursement coverage is a good investment, you should be thoroughly informed on how the coverage works as well as its benefits and cons.
How Rental Reimbursement Coverage Works
Rental reimbursement coverage adds $20 to $60 to auto insurance every six months depending on the coverage. The coverage applies when your car is not drivable or in repair due to an accident. It also covers auto theft cases but insurance companies require you to report the theft within 48 hours. Some insurance companies will also apply a per accident limit to the coverage. If you are eligible to receive this coverage, your auto insurance company will either work with their preferred rental companies or reimburse you after you've paid upfront.
The Benefit
The benefit of rental reimbursement insurance is the costs it covers to rent a car, which can add up to several hundreds of dollars. When you compare the costs of rental reimbursement coverage to the costs of renting a car, it may be a good investment. The U.S. Bureau of Transportation Statistics reports that the average repair time for an auto accident is two weeks. Therefore, a compact car rental for $50 per day would amount to $700 in total rental expenses. If you were paying $60 every six months or $120 every year, it would take about 6 years to exceed the $700 rental costs.
The Drawback
You may not ever need this auto insurance coverage and as a result, the coverage could end up costing you more than saving. Additionally, you may be already covered by the auto company that engineered your car. BMW and Mercedes offers loaner cars to customers who have their car in the repair shop. These loaner cars are often used as an incentive during a sales agreement. Check with your local dealership to see if you have access to a loaner car before buying rental reimbursement coverage.