Most auto insurance companies will cover private passenger rental cars in the United States for both liability and damage to the rental car. Your insurance agent can explain what coverage you have on your own auto insurance policy. If you have enough liability coverage to protect other passengers and their vehicles, you’ll not need your rental company’s personal liability insurance. If you have sufficient collision and comprehensive coverage, you can pass on purchasing a CDW or LDW to protect your rental car from damage. Taking the time to understand the coverage you already have on your current auto policy could save you a few dollars on your rental car insurance.
Know What Coverage You Have
You may not know that your credit card company might offer rental car coverage. You could also receive free benefits if you charge your rental on your credit card. When these benefits are not free, your credit card company may offer you a cheaper deal for renting a car. However, some people mistakenly believe that their credit card company will provide full coverage for rental cars. There are several factors to take into account. Your credit card company may not cover SUVs, pickups, luxury cars, vans, or other vehicles. Rentals for over two weeks and travel outside of the designated geographic area are not likely to be covered as well. Some policies do not offer personal liability coverage for bodily injury or death claims. Other credit card policies may only cover damage to your rental, but not to other cars.When you know how much coverage you have through your auto insurance policy and your credit card issuer, make sure you inquire about limitations and other situations that may affect your coverage. According to the Insurance Information Institute, if you’re at fault for causing an accident by speeding or driving under the influence, your insurance coverage may be void. Always ask questions to understand what is covered and what is not.
Keep in mind that that there are a few potential traps to be aware of and a few important points to remember when renting a car:
- Renting a commercial vehicle like a cargo van or a U-Haul box truck - make sure to check with your insurer because it is likely that your personal auto insurance policy will not provide coverage. A rule of thumb is to check the license plates – if they’re commercial, you probably need to buy the rental car insurance, but check with your insurance agent to confirm.
- If your vehicles are all company-owned, you’ll need to check with your insurer as you may not have coverage on rental cars.
- Collision coverage - if you have your own coverage and decline the loss damage waiver (LDW), you will still have to pay a deductible if the rental car is damaged, vandalized, or stolen.
- For travel outside of the United States (to Canada, Mexico, etc.), check with your insurance agency as you may not have coverage.
- If you do not have collision or comprehensive coverage on your auto policy, damage to the rental car will not be covered. In this case, consider purchasing a CDW from the rental car company. If not purchased, you could be held responsible for damage, vandalism, or the theft of your rental car.
Bottom line, before renting a car it’s best to research and familiarize yourself with the different insurance options. Review your auto insurance policy and your credit card company’s benefit guide. If you don’t have any other insurance, purchasing coverage from the car rental company is strongly recommended. When buying insurance coverage, find out exactly what’s covered and included to help avoid spending on unnecessary coverage.
Additional Information Links:
http://articles.moneycentral.msn.com/SavingandDebt/TravelForLess/SteerClearOfThese5CarRentalTraps.aspx
http://www.bankrate.com/finance/credit-cards/does-your-credit-card-insure-a-rental-car-1.aspx
http://www.insureme.com/auto-insurance/rental-car-insurance
http://www.insure.com/car-insurance/rental-car-basics.html