Rental Car insurance can be an area of misconception for many people – the coverage that a rental agency offers may not be enough, and can still put you out if you end up needing to use it. In most cases, your existing liability, comprehensive and collision coverage (on your own vehicle) will apply to a rental car, given that the rental is used for pleasure and not business. The best time to make the decision about whether you will need extra rental car insurance is before you’re standing at the car rental counter. We’ve put together some helpful information to help you decide if you need extra coverage.
- A Collision Damage Waiver (CDW), or Loss Damage Waiver (LDW), excludes you of financial responsibility if your rental car is stolen or damaged. If you already have comprehensive and collision insurance on your own car, you most likely won’t need to purchase CDW from a rental car agency.
- Also, it’s possible that your credit card company may include some collision and theft protection if the rental car is paid for on your card. This may include “loss of use” coverage, which refers to the amount of money a rental car company can stand to lose while their car is being repaired. If your credit card doesn’t offer loss of use coverage, consider purchasing a CDW from the rental agency.
- Liability insurance provides excess liability coverage (up to $1 million) for the time you rent the car. Car rental companies are required by law to provide the minimum level of liability insurance required by your state. In serious accidents, though, this often does not offer enough protection. If your liability coverage is adequate, or if you have an umbrella policy on your home/auto, you should consider forgoing this additional insurance.
- Rental Trucks, etc.: If you rent a moving truck or large-capacity van – vehicles not classified as passenger cars – you will need to purchase a separate policy from the rental company to obtain coverage for that truck as your personal auto insurance policy may not provide coverage. Check with your carrier.
- Out-of-country Rentals: Most U.S. auto insurance does not cover you when you leave the country. In some cases, though, your policy may apply when you drive to neighboring countries. Double-check with your agency to determine if your policy covers you in Canada, Mexico, or countries south of Mexico. Most overseas car rental agencies usually provide auto insurance, but the required coverage may be minimal. Consider purchasing overseas coverage that is at least equivalent to your usual auto policy’s.
Don’t wait until you’re at the rental car checkout desk to evaluate your insurance options. Contact Insurance Incorporated today for answers to any questions you might have about auto insurance. Lic #0235301