Most rental car companies provide insurance called Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW), which protects against financial liability in case your rental vehicle is damaged or stolen. This coverage shields you against financial obligations should the rental vehicle become damaged or lost during its time with you.
However, if you already have enough liability coverage through your personal auto policy or credit card, it might be beneficial to forgo this extra coverage.
1. What coverage is normally offered through my rental car company?
When renting a car, rental agencies usually provide various forms of coverage. One is a collision damage waiver (CDW), which relieves you from covering physical damages to the rental car itself; personal accident coverage covers medical costs in an accident. Both policies typically come as part of your auto policy with possible exceptions or restrictions in effect.
Rental car companies usually offer loss damage waiver or excess liability insurance as additional protection against financial responsibility in case of an accident or theft, with many credit cards providing this coverage when paying with their card for rentals; however, this coverage usually kicks in once rental car company policies have been exhausted first.
2. Is it necessary to buy rental car insurance from the car rental company?
People may hesitate to purchase rental car insurance directly from car rental companies, but it might not be necessary. Some premium credit cards provide primary rental car coverage that includes Collision Damage Waivers that provide liability-free protection in case your rental vehicle is damaged or stolen.
Personal accident coverage provides medical expenses in the event of an injury; in contrast, this does not extend to rental cars as most auto policies already cover them through collision and comprehensive coverage (which protects against non-collision losses such as vandalism and theft), so additional coverage from rental car companies may be unnecessary and understanding their terms and conditions is key for safe renting experiences.
3. Is it possible to decline rental car insurance?
Car rental companies usually provide insurance protection to their customers, usually comprising collision and comprehensive coverage to compensate for damage caused to the vehicle by events other than driving such as fire, severe weather, or theft. The costs may be offset by your auto policy by covering part of this expense such as deductible and administrative fees; or by personal accident insurance that pays out when injuries occur to yourself and other passengers in your rental car.
Some credit cards provide loss-damage waiver, or LDW, coverage that covers physical damage to rental vehicles and allows renters to avoid hard sell at the car rental desk. Unfortunately, however, this coverage often acts as secondary coverage and you must file your claim through your auto policy before the credit card company steps in to help.
4. What are the benefits of rental car insurance?
Rental car insurance provides travelers with a safety net in case of accidents or vehicle damages, such as those associated with towing. Rental companies usually offer such policies at the counter as an optional add-on; however, you might also find coverage through your personal auto policy or credit card benefits.
At the counter, salespeople will push additional coverages such as collision damage waiver and personal accident insurance onto you. Before agreeing to additional policies, however, you must review existing ones carefully and understand their parameters fully before adding new ones. Also having auto and credit card coverage details readily available will assist with expeditiously filing claims in the event of an accident or other incident.
5. What are the disadvantages of rental car insurance?
At the car rental desk, salespeople may try to sell you additional coverages such as a collision damage waiver that could add $30 per day to your rental cost. If your insurance agent confirms that your auto policy covers rentals adequately, forgoing these extra coverages may be worthwhile.
Before making an informed decision about rental car insurance options, you must understand their advantages and disadvantages. Rental companies provide various plans besides collision damage waivers such as personal accident protection/medical payments for injuries to yourself or passengers in an accident, loss-damage coverage that covers the cost of stolen vehicles as well as personal accident protection/medical payments coverage for injuries resulting from accidents.
6. What are the alternatives to rental car insurance?
Renting car insurance can quickly add up. However, drivers should know that many credit cards offer coverage that could reduce or eliminate their need to purchase additional rental car coverage at the counter. Most credit card policies provide liability protection that protects drivers against bodily injuries and property damages as well as collision coverage – helping keep costs under control for drivers who rent cars.
Credit cards also typically provide first-party medical and loss-of-use coverage to cover medical bills and rental car company charges in case your vehicle is damaged or stolen, making rental car insurance unnecessary in many instances. Motorists should evaluate their needs carefully when considering renting car coverage through rental car companies; it may be possible to opt-out and save money in this way.
7. What are the risks of not buying rental car insurance?
If you are considering declining rental car insurance from a car rental company, several points should be kept in mind. First of all, remember that your auto policy likely already provides coverage for rental vehicles; premium credit cards may provide primary coverage as well; this coverage usually excludes luxury and exotic cars and often does not apply to pickup trucks and vans.
Personal accident coverage should also be included when renting a car; this coverage option typically provides medical costs coverage in the event of an accident – though please remember that primary coverage (ie, your primary policy) takes priority over secondary policies like this one.
