Rental Car Insurance – Is Your Own Auto Policy Good Enough?

It’s summer and you might be thinking of renting a car to go on vacation. It all depends. You can save a lot of money if you do your research before you go to the rental counter. This will not take long because you can check out the insurance status while you are looking for a great rental deal.

Your first contact for renting a car is not to the rental agency, but to your insurance agency. It is important to determine the extent of your auto coverage. While most auto policies cover rental cars, insurance experts suggest that you inquire about collision damage waiver or liability. Ask your agent or the rental agency about coverage if your teenager is driving the rental car.

The collision damage waiver or CDW, as it is often written on rental contracts, covers damage to your car and liability covers damage to others. Ask your agent about the limits on collision insurance. You may rent a luxury car, but you are a regular driver of an older vehicle. Make sure that your personal insurance policy covers the entire cost of replacing the car. If your policy does not cover replacement costs and your car is valued at $2,000, and you rent a vehicle that’s worth $20,000, then you will be responsible for $18,000.

Consumers who drive older cars often don’t have collision coverage. This is why you should either buy a policy from the rental counter, or get credit cards that provide this coverage. Consumer advocates suggest that if you frequently rent cars, you may get an estimate from your agent for a policy that will cover you. It might be less expensive.

Let’s talk about the …. credit card. Major credit card companies will offer insurance coverage to you if you rent a vehicle with their card. READ THE FINE PRINT as they may not offer complete coverage. Some cards will only cover you if your rent from a specific agency. Others may limit your coverage to certain types of cars. Some may not reimburse you for the deductible that you would need to pay under regular auto insurance. Other cards may provide only collision and comprehensive coverage and leave you exposed to personal injury and property damage. READ THE FINE PRINT, or call the credit card company to ask. Additional advice: Get it in writing.

What about the insurance that the rental car company offers you? You will need to research exactly what insurance they offer. Some agencies rent cars with collision, liability, contents, and life insurance, while others provide some form of collision. The collision coverage may include all or exclude certain items like tires, wheels, and glass. You should find out this information before you go to the rental counter. This will ensure that you don’t feel pressured or rushed when making these decisions. Check your homeowner’s insurance to make sure you are covered if your car is stolen.

Some people believe that if they rent insurance from a rental company and have an accident, they will not be charged more. You are not covered. Some large insurers state that if you are at fault and no one pays, your home insurance company may raise your rates.