Rental Car Insurance - Should You Buy Rental Car Insurance?
It doesn't matter if you're a regular car renter or just an occasional traveler
who needs to rent a car, you'll likely face these kinds of choices at the car
rental counter. Before leaving on your trip, I recommend that you make two phone
calls - one to your auto insurance company and another to the credit card
company you'll be using to pay for the rental car. You'll need to find out if
you have automatic coverage for your car rental from each company, and the
various terms and conditions for that automatic coverage. In your personal or
business auto insurance policy, there is coverage for damage to your auto. If
you rented a car and it got damaged, your insurance company would provide the
full coverage for the rental car, which is the broadest coverage in your policy.
If you normally drive an older car with only liability insurance on it, there
will not be any property damage insurance extended to the rental car. In this
instance, you should either use the credit card's Collision Damage Waiver or buy
the CDW from the car rental company.
Ask your insurance company representative
how much coverage you have on your car. REALLY important to know this...you
could owe the rental car company tens of thousands of dollars to repair or
replace a high value rental vehicle if you're not properly covered. Find out
what collision and comprehensive deductibles you have on your car, because those
deductibles will apply when you rent a car and use your own insurance for rental
coverage. You should buy the rental car coverage, both the CDW and liability
coverage. Or, you should use your credit card's CDW and buy the optional
liability coverage from the rental car company. This solution might save you
money over the coverage available through the car rental company. A: Most
Collision Damage Waivers provide coverage for theft of the vehicle, but not any
personal property stolen or damaged inside the vehicle. Some people think that,
if they purchased the Collision Damage Waiver or used the CDW from their credit
card, and the rental car got damaged, they don't have to report it to their own
insurance company. If you're going to use your own personal or business auto
coverage, decline the Collision Damage Waiver on the car rental contract. Then,
use that credit card to pay for your rental car, and use their benefits.
If
you're planning on using the credit card company's coverage, you must decline
the Collision Damage Waiver shown in the rental car contract. Otherwise, the
credit card company's coverage will become excess to the coverage in the rental
car company's Collision Damage Waiver. "Excess" means that any other available
coverage would pay first, and the credit card coverage would pay any remaining
portion of the loss. Most major rental car companies offer these four coverages.
The most misunderstood part of car rental coverage is the Collision Damage
Waiver, or sometimes called the "Auto Rental CDW." Remember...the car rental CDW
provided by the car rental company is not insurance. The car rental companies
agree to not hold the renter responsible if the rental car is damaged or stolen,
and they guarantee that they will pay for certain damages listed in their
coverage agreement. In many cases, the waiver also provides "loss of use"
coverage, which pays the rental company if the damaged or stolen car cannot be
rented. So, if you choose not to buy the Collision Damage Waiver, you might have
a loss of use exposure if the rental car gets damaged. Some car rental companies
will require you to pay for repairs or replacement costs out of your own pocket
up front, and then you have to get reimbursed by your own insurance company.
This provides coverage for theft or damage to personal items inside the rental
car. If they do, find out what that policy covers, and then simply don't buy
duplicate coverage on the rental car contract. Some credit card companies cover
car rentals outside your country of residence. A: If you're using your personal
or business auto coverage to cover your rental car, the chances are all
"authorized drivers" are covered. If your teenaged son drives your rental car
and he allows his girlfriend to drive the car, you're covered. Report the damage
to your own auto insurance company if you have personal or business coverage. If
you have personal auto insurance, commercial auto insurance or corporate travel
coverage, it is usually not necessary to pay for the Collision Damage Waiver or
extra coverages offered to you by the rental car contract.
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