You’re on the weekend, and you have just rented a car for a quick getaway with friends. All of you are excited to go on a trip, and grateful to have the option to rent a car. Are you certain you have the right coverage in case you get into an accident? It can be confusing and frustrating to have so many options when it comes to rental car insurance. Many people end up paying too much, or have dangerous gaps in their coverage.
Four types of rental car insurance coverage
A few years ago, I needed a rental-a car. When I went to the counter to pick it out, I was presented with several options: Loss Damage Waiver and Liability Insurance. Personal Accidents Insurance and Personal Effects Coverage were also available. What is the difference between these types of coverage?
Not Necessary Coverage
The agent who rented me the car was very persuasive and I worked it out with tons coverage that I later found I didn’t really require. Before you even step into a rental car office to speak to the friendly agent, it is important to find out what coverage you have. This can be done by two phone calls.
Phone calls
Call your agent if you have auto insurance. Most cases, the coverage you have for your car will also cover your rental vehicle. Call your credit card company to confirm that the card you intend to use for the rental is valid. Did you know that almost all cards provide rental coverage? (I had no idea!) Card to card coverage can vary in terms of the amount and type. Call the number at the back to find out the details.
Now, when you get to the rental office, there will be several options for insurance that you can choose from. Although they may vary slightly from one state to the next, in general you will be offered:
(1) Collision Damage Waiver or Loss Damage Waiver
You will be covered in the event that your car is stolen or damaged. If you have auto insurance, or your credit card covers it, there is a good possibility you won’t have to purchase this.
You should be aware that rental companies often charge additional fees for accidents. These fees can add up quickly, but the Loss Damage Waiver will pay for them.
(2) Liability Insurance
Owner Liability
If you are sued for an accident that occurred at your rental property, this will provide financial protection. Keep in mind that you may already have auto insurance.
Non-Owner Insurance
You can also get Non-Owner Insurance if you don’t own a car but rent a lot. This gives you additional protection when you rent or borrow another car.
(3) Personal Accidents Insurance
You and your passengers are covered for ambulance and medical bills. You may not need it if your health insurance is good or your auto-insurance covers medical bills. However, you should still check to make sure.
(4) Personal effects coverage
If your car is stolen, this will protect your belongings from theft. This should be included if you have a Renter’s or Home Owner’s insurance policy.
Avoid Double Insurance
Bottom line: Rent-a-car insurance is more profitable for the company, so they encourage you to purchase more. While I don’t recommend you not get coverage, it is important to ensure that you are protected against financial ruin. To make sure that you don’t duplicate the coverage you have.
Credit Score Matters
It is important to know that not all companies will run credit checks. They may deny you a rental due to your credit score.
The Age of
Lastly, many rental car companies won’t rent to anyone younger than 25 years of age. Even if they do rent, it is often at an additional cost.
Before you rent, do your research on the coverage that you require and what you don’t. Remember, driving safely is the best protection.
