An Independent Look at Rental Car Insurance

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.