Even when driving a rental car, it is wise to be covered by adequate car insurance. If you are fully covered, you will have enough insurance to pay for costly repairs or even for expensive hospital bills resulting in a car accident which you caused.
You Have Many Insurance Options
It will be wise for you to familiarize yourself with every insurance option available to you before you select the car you are going to rent. If you have your own car, you surely must have some form of insurance coverage. You can examine your insurance policy to see what type of insurance coverage you already have. Or you can call your insurance agent and ask him.
Your credit card company also offers other car insurance options. Usually, credit card companies offer insurance coverage when you use your card to charge your car rental. These two options can be a cheaper way compared to purchasing insurance protection offered by the car rental company.
Your Own Car Insurance
Before renting a car, you need to know which car insurance works best as rental car insurance. You should realize that your present car insurance offers a type of coverage that is usually applicable to rental cars.
If your existing car insurance contains collision coverage, any collision damage that you cause to any car that you are driving will be covered. But there are some car rental companies which will claim that your insurance is in ‘excess’ to their insurance coverage. The reality is: your own collision coverage requires you to pay a deductible before the insurance of the car rental company kicks in.
If you cause a car accident while driving the rented car, your liability insurance will pay for the damages that the other car or its passengers sustained, in addition to the medical expenses that result because of your negligence. You will be covered by your liability insurance up to the maximum limit of your policy. Therefore, your own collision coverage is really an “excess” to any additional coverage that the car rental company is offering.
Your Credit Card
If you will charge the cost of your car rental to your credit card, the credit card company will usually give you insurance coverage for free. Even if it is not totally free, the credit card company may have a cheaper rate for the same insurance coverage that the car rental company is offering you.
But according to the III (Insurance Information Institute), when choosing the insurance coverage of your credit company, ask them to give you a written detail of your coverage.
You need this detail in writing because some credit card companies cover only damage to your rented car and not to other cars, while others don’t offer personal liability coverage for bodily injury or death claims.
Therefore, before committing yourself to a car rental company, you need to research matters referring to rental car insurance in relation to your existing car insurance coverage.
Car Insurance Offered by the Car Rental Company
Car rental companies not only earn from renting their cars, but also from the car insurance coverage that they sell. They offer a wide variety of car insurance and waivers. These insurance policies broaden your protection against damages and mitigate your responsibility in paying for a damaged rented car.
The usual waivers that they offer are Collision Damage Waivers (CDW) and Loss Damage Waivers (LDW). They take the place of your existing comprehensive and collision insurance. If you crash the rented car, or it is stolen, or vandalized, these waivers will take care of the damages.
But there’s a caveat in all of these waivers: they will become void if the accident occurred because you were driving under the influence, over speeding, or caught in some form of reckless driving.
Waivers are technically not insurance products since they are not underwritten by an insurance company. They are purely under the auspices of the car rental company. Therefore, if you already have comprehensive car insurance, getting these waivers is practically duplicating your protection, which is unnecessary. The cost of these waivers ranges from $9 to $19 per day.
In addition, car rental companies such as Lowe’s and Penske also offer additional liability insurance or supplements. This would be a better option if your existing liability insurance is not sufficient. According to the III, you can buy this coverage for around $7 to $14 per day.
At this price, you will be covered for up to $1 million. If you choose to buy this insurance from the car rental company, it becomes your primary insurance covering all the damages in a car accident that you cause.
This liability insurance coverage, should you choose to buy it from the car rental company, will relegate your own personal liability insurance to excess-coverage status. Other insurance policies that most car rental companies offer are personal property insurance and accidental death coverage.