Things to Consider when Getting Auto Insurance for Rental Cars
When getting a rental car, rental companies will almost always ask you if you want rental car insurance. Before you decide, here are some things to consider:
Your Auto Insurance Policy
Your existing auto insurance policy and coverage usually will apply to the rental car. Keep in mind how much coverage you have with your auto insurance company before waving the rental car insurance. Any damages outside of your insurance coverage will need to be paid out of pocket. So if you do not have comprehensive coverage or collision coverage, you may want to purchase additional coverage from the rental car company. Always review your policy or speak with your auto insurance representative and have a full understanding of your coverage.
Your Credit Card Company
Your credit card issuer may provide rental car insurance if you pay with a credit card. The insurance offered by credit cards vary by providers and can change from time to time. Typically, your credit card issuer will provide collision and theft coverage, but not liability coverage. Additionally, some providers may not be willing to cover certain types of vehicles, certain accident and repair fees charged by rental companies, and certain countries. Be sure to talk with a representative and know what is covered under your credit card.
Your Homeowner's Insurance
If your personal possession gets stolen from the rental car, your homeowners or renters insurance policy may cover your losses.
If you are traveling outside of the US, you should check with your insurance providers if your coverage will extend to the rental car. In some instances, rental car companies may not allow you to decline rental car insurance if you are in a foreign country.
Loss of Use Fees
If an accident happens, rental car companies may charge a "loss of use" fee - a fee that covers any lost profit while the vehicle is getting repaired. Many auto insurance policies and credit card providers will not cover you for this fee and you may have to pay out of pocket.
Gaps in Insurance Coverage
If you have any gap in coverage from your auto insurance policy and credit card, you may want to purchase rental car insurance. Rental car companies usually offer the following:
- Collision Damage Waiver (CDW) and Loss Damage Waiver (LDW): These options will waive you from any responsibility for vehicle damages and theft.
- Personal accident insurance: Covers any medical cost as a result of an insurance claim
- Supplemental Liability Insurance : Extends your existing liability coverage, usually up to 1 million dollars.
- Personal Effects Coverage: Covers losses for any stolen personal property from the rental vehicle.