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Rental Car Insurance
Many of us prefer to rent a car while on holiday. It can be both, a necessity on a business trip and a convenient way to travel around during your vacation, not having to deal with the public transportation schedules and expensive taxis. If you are going on a long trip, you may not want to put the miles on your own car and will also find a rental car more beneficial.
Just like you have your own car insured, you may need your Rental Car Insurance to cover damage or theft to a vehicle you rent during your travel, as well as liability to other people or cars you might injure or damage while driving a rental car. Your personal Auto Insurance policy may not cover all risks related to vehicle rentals. Some policies will cover you only for in-country rentals. Thus, if you have a US policy, you may need to purchase Car Rental Insurance in country of your destination.
It is very important to read through your Rental Car Insurance contract carefully not to suffer from the information shortage in a situation where you have to submit a claim. Be aware that at the moment you sign a rental contract, you take up a personal responsibility for the loss of revenues of the rental agency in case the car you rented becomes unavailable to rent due to repair works, no matter if you are at fault or not; damage to the rental car, including accidents, fire, theft, and road hazards, regardless of who is at fault; and injuries or property damage you cause to others while operating the rental car.
Check your existing personal Auto policy or credit card before you purchase a Rental Car Insurance in order to determine whether you need to buy more coverage. Depending on your policy, you may have the occasional use of a rental car covered. Some insurers may extend coverage under your Collision and Comprehensive Auto Insurance policy for damage you cause to the rental car. If your current policy doesn't offer coverage for a rental car, check if an insurance rider can be offered to you at a low fee.
An optional collision-damage waiver (CDW), or loss damage waiver (LDW) may be the option for those who are not covered by their Auto Insurance policy and for people who are renting for business purposes. Liability coverage for rental cars is generally offered in two parts: a supplemental liability policy, protecting you against claims from others and a Loss Damage Waiver (LDW). However, LDW may have certain restrictions, and may not provide coverage in all situations.
The collision damage waiver does not strictly belong to insurance policies, but rather serve as a guarantee that the car rental firm will pay for certain damages that you may cause to the vehicle. Such waivers also cover the "loss of use" period, i.e. the sum which a car rental firm happens to lose when the vehicle cannot be rented out. In case you don't take out collision damage insurance with the car rental firm, you could have to pay "loss of use" out of your pocket.
You are legally required to take out liability insurance, which will cover you in case you injure another person in an accident. If you own a car, your Auto Insurance may or may not provide liability coverage for driving a rented vehicle. Remember that if someone is killed or injured in an accident, your liability can be much greater than the value of the car.
Credit cards often include Rental Car Collision insurance, but not liability insurance. If you take the full coverage option, including liability, passengers, and the rental car itself, it is likely to cost you about $25-$30 per day. However, these $30 extra per day may buy you a peace of mind, and from this perspective, the price is not high.
You may not need to obtain Rental Car Insurance from the rental company since many credit card companies automatically offer this insurance if you pay for the car rental using the credit card. You don't have to take out separate rental car insurance if your own Auto Insurance covers liability, and your credit card covers the rental car.
In case you don't have adequate Car Insurance and your credit card company does not offer any benefits, check what coverage rental companies offer. Review provisions, limitations and exclusions of each plan before making a purchase. Ask an agent at the rental office to clarify the issues you don't understand and shop around for competitive rates.