Real Estate

An independent look at rental car insurance

When you approach the car rental counter, the rental agent will ask if you want to purchase insurance for the rental car. If you say no, you will be asked to initial next to each coverage you decline. The decisions you make in these brief moments could have a dramatic impact on your financial situation. Deciding whether you need to purchase the auto insurance offered at the rental car counter before you arrive can prevent you from incurring a serious financial loss or wasting your money on insurance you already have or don’t need. One of the most frequently asked questions of us as auto insurance agents is “Do I need to purchase the auto insurance offered at the car rental counter when I rent a car?” The answer to this question is perhaps. You may be able to provide coverage for the rental car using insurance policies you already have, or you may decide that you need to purchase additional protection. In this article we will give you the information you need to make these crucial decisions.

When you rent a car, there are several ways to secure coverage without having to purchase coverage at the car rental counter.

Transferring coverage from your existing car insurance policy – If you are renting a car and have an existing car insurance policy, you should bring your insurance identification 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 hassle if the police stop you in your rental vehicle. The coverage and deductibles from your own auto insurance policy will automatically carry over to the cars you rent as long as you are not using the rental car for business purposes or in another country. You should check the declarations page of your personal auto insurance policy to find out if you currently have collision, comprehensive and property damage liability coverage. Take note of your property damage liability limit and your total 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 car insurance policies only cover their owners in the country where the policy was written.

Damage to your rental car will be covered under the Property Damage Liability portion of your personal auto insurance policy if you are renting the car for recreational use. However, if you were involved in an accident that is covered by your auto insurance policy and your car is in the shop for repair. Damage to the replacement car you rent will be covered under the comprehensive and collision coverage portion of your personal auto insurance policy. That means you will have to pay the deductible for these coverages if you damage the rental car.

Use the coverage provided by your credit card – Most major credit cards advertise rental car insurance as one of the benefits of owning your card. The truth is, the coverage these cards provide generally only applies to the country after your personal auto insurance policy limits have been exhausted and only if you used your card to pay the full rental price. The level of protection with credit cards seems to change daily, so we recommend calling your credit card company to determine your exact level of protection for rental cars. When you speak with the credit card representative, ask for information about liability, comprehensive and collision coverage for rental cars. It is best to get this in writing, as it is not uncommon to get several different responses from the same credit card company. You should also ask if there are any exclusions. Many credit cards exclude coverage for luxury or exotic vehicle rentals.

Buy a Non-Owned Auto Insurance Policy – If you frequently rent cars but don’t have your own auto insurance policy, you can save a lot of money by purchasing a “non-owned auto” liability policy. This policy gives you the same type of protection as the Excess Liability coverage offered at the car rental counter. These types of policies generally cost around $ 300 a year and will cover you when you drive a private passenger car. This policy only provides protection for bodily injury and property damage liability. You won’t pay for damage to your rental car, so you’ll still need to purchase the Collision Damage Waiver or use one of the coverage methods we discussed above.

If you cannot secure coverage using any of the methods listed in the previous chapter, you should seriously consider purchasing coverage at the car rental counter. It can be difficult to get honest advice on these coverages from the car rental agent because they are paid a commission every time they are sold to you. Do not worry; We have provided you with all the help you need below.

Collision Damage Waiver (CDW) – Some car rental companies also call a loss damage waiver (LDW). It is often referred to as insurance, but this is incorrect. Actually, it is a disclaimer. When you purchase this protection, the car rental company waives its responsibility for damage or theft of the rental car. If something happened to the car, you would simply file a quick claim form when you return the car and the rental company would pay to repair or replace it. The price of this protection usually ranges from $ 15 to $ 25, depending on where you rent.
Caution: This coverage may be voided if you cause an accident while breaking the law. This includes speeding, off-road driving, or driving while intoxicated, so use caution when driving a rental car or any other car.

If you have a minimum limit like $ 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 the repair or replacement of the rental car. . Remember that you could also be liable for damage to other people’s car or property if you are involved in an accident and it is found that you are at fault and the car rental companies will charge you for the loss of rental income from the car that hurt. These are all important factors to consider when deciding whether to purchase the collision damage waiver.

Another advantage of this coverage is that there is no deductible. This can be helpful 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 for repair. In this scenario, you see that any damage to the rental car would be covered under your comprehensive or collision coverage, which means 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 their vehicle renters, 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 that you have adequate limits of liability for bodily injury and property damage in your personal auto insurance policy. We do not recommend purchasing this coverage. This coverage would only pay after the limits on your personal auto insurance policy are exhausted. The price for this protection is around $ 10 to $ 13 per day for $ 1 million 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 necessary. If you live in a “no-fault” state, have health insurance, or have health coverage, you probably already have this protection and don’t need to buy it from the car rental company. Check your auto and health insurance policy to be sure. A claim for this type of loss on your personal car policy will not cause an increase in price, so if it is covered by another policy, there is really no benefit to buying it from the car rental company. The price for this protection typically ranges from $ 2 to $ 5 per day, depending on where you rent.

Personal Effects Coverage – This is coverage for the theft of your personal items or your passengers, such as cameras, camcorders, or laptops. This protection can also be provided in your homeowner or renter policy if you have one, so you may not need to buy it from the car rental company. However, deductibles for landlords or renters are typically $ 500 or more, and not all of your items may be covered. Check your policy declarations page for your deductible and exclusions section to find out if the items you carry are covered.

One of the benefits of purchasing this coverage from the car rental company is that you usually do not have to pay a deductible. You simply file a claim when you return your rental car and are reimbursed for theft of your items. Generally, you will need to prove ownership of the items that you claim were stolen by providing the car rental company with receipts or other proof of ownership. You should also ask the rental agent if any exclusions apply to this coverage before purchasing. The price for this protection is $ 2 to $ 5 a day.

It’s best to make all your rental car insurance decisions before you go to the rental counter. No one should be forced to make quick decisions on such important issues, and now you don’t have to. We hope you have found the help you needed in this manual. I love getting feedback on this article, so please send your questions or comments to [email protected]. I hope to hear from you!

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