It's the weekend and you've just rented a sweet ride for a little getaway with your friends. You are all excited to take a trip and glad to have the convenience of a rental. But are you sure you are fully covered in case of an accident? Rental Car Insurance can be a confusing and frustrating labyrinth of choices. And people often end up either paying way too much or having risky gaps in their coverage.
Four Types of Rental Car Insurance Coverage
Not too long ago, I needed a rent-a-car and when I arrived at the rent-a-car counter to pick it up, I was bombarded with a slew of options – Loss Damage Waiver, Liability Insurance, Personal Accidents Insurance, and Personal Effects Coverage. What are all these types of coverage?
The rental car agent was pretty persuasive so I did work it out with tons of coverage that later I learned – I did not really need. So before you ever step foot inside a rental office and talk to the charming agent, you need to know what kind of coverage you already have by making two phone calls.
If you already have auto insurance, call your agent. In most cases the coverage you have for your personal automobile also covers for your rental too. Second, call the credit card company if the card is what you are going use to charge the car on. Did you know that most cards have some kind of coverage for rentals? (I had no idea!) The amount and type of coverage varies from card to card. So just call the number at the back and find out what they have.
Okay, now when you arrive at the rental office, you will be given several choices of insurance to purchase. They usually vary slight from state to state but in general, you will be offered –
(1) Loss Damage Waiver or Collision Damage Waiver
This will cover you in case the car is damaged or stolen. There is a good chance you do not need to buy this if you already have your own auto insurance or if your credit card covers it.
What you should know is that many rental companies now charge various fees after an accident. This can really add up but the Loss Damage Waiver will cover this.
(2) Liability Insurance
This provides financial protection from law suits if you are sued because of an accident involving your own rental. But keep in mind – You may already have this to your own auto insurance.
By the way, if you do not own your own car and you rent a lot, you get something called Non-Owner Liability which gives you extra protection every time you rent or when you borrow someone else's car.
(3) Personal Accidents Insurance
This covers you and your passengers for medical and ambulance bills. Now, you may not need this if you have pretty good health insurance or your auto-insurance covers your medical bills but you should check just to be sure.
(4) Personal Effects Coverage
This protects your stuff from theft if it's stolen from your rental car. You should already be covered with this if you have a Home Owner's or Renter's Insurance Policy – which you should have.
Avoid Double Insurance
The bottom line – Buying insurance at the rent-a-car counter means more profit for the company so they want you to buy a lot. I'm not saying do not get any coverage because Lord knows you need to protect yourself against financial ruin. Just to be sure you do not duplicate any coverage you already have.
Credit Score Matters
You should also know that some companies run credit checks and can deny you a rental based on your score.
Finally, some rental car companies will not rent anyone under 25 years old. And even if they do, there is usually an added charge.
Do your homework on whatever coverage you need or what you do not need before you rent. And remember, driving safe is the best protection of all.