Have you at one time found yourself at a rental car agency pondering whether you need to purchase their additional coverage?
What, you ask yourself, does my regular car insurance cover?
Unfortunately, there are no simple answers that apply to everybody.
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Whether you are covered, and for how much and for what, is determined by what kinds of rental car insurance you have, where you are renting the car and what protection your credit card provides.
Before you rent, contact your credit card provider and your insurance company, so you understand what terms apply to a rental car.
You should not wait until you are on the side of the road waiting for an ambulance or tow truck.
Normally, coverage from your primary car insurance will extend to a rental car.
In case you cause an accident while behind the wheel, your rental car liability insurance would pay up to your policy limits for the damages to other vehicles or property.
Similarly, collision coverage on your regular insurance plan would pay for damages that are accident-related to the rental car you are driving.
Finally, damages to the rental car not connected to a traffic accident, like vandalism or theft would be taken care by your comprehensive coverage.
Renting a vehicle can really help when you are planning to start an exciting road trip with your current car.
The term rental car insurance can arise on several instances referring to different things.
Rental car insurance may be broke down into two kinds.
- Insurance coverage on your car policy that pays for a rental car while your car is being repaired because of a covered loss. Insurance providers refer to this insurance coverage using different terms like rental, increased transportation limits or something equivalent.
- Car coverage on the car you rent.
Insuring a rental car
Insuring a rental car is just like insuring your own vehicle.
Coverage for physical damage, liability, and medical is needed. It is essential to know what you are buying.
The car rental provider gives multiple kinds of coverage, which are named a bit differently from your car policy.
- Collision Damage Waiver
- Emergency Sickness Plan
- Personal Accident and Effects Coverage
- Additional Liability Insurance
The choice of price can differ tremendously based on where you get rental car insurance.
You may get insurance for a rental car from some different sources.
- Directly From the Car Rental Firm
- Online Travel Packages
- Credit Card
- Car Insurance
In case you have full coverage auto insurance on one of your insured cars, your auto insurance coverage will probably extend coverage to a rental car.
The greater concern is that the rental car provider will probably charge you rent on the car while it is getting repaired.
Their car is out of commission, and they can’t make money off of it.
You might be stuck with a huge bill although your car insurance coverage pays for the damage. Look at the fine print or customer support representative to determine just what is given from each source.
Keep in mind; sometimes you will get what you pay for.
Car insurance coverage that pays for renting a car
In case you are involved in a car accident and do not have access to a back-up car, a rental car is essential.
An optional insurance coverage on your car insurance is car rental insurance coverage, or it is often known as increased transportation limits.
The coverage will help cover the expense of renting a vehicle.
Rental insurance coverage only applies after a covered loss
Car insurance coverage which pays for renting a vehicle is only useable if you have a covered loss.
Your vehicle has to be undrivable because of a loss so as for the coverage to pay out.
It doesn’t cover if you are going on holiday and need a rental car or mechanical maintenance repairs.
Consult your insurance provider to find out if your policy pays towards a rental car after a covered loss.
Rental car insurance is essential to understand. Nothing is more upsetting than thinking you have coverage for something, only to discover it is not what you thought.
Rental vehicle insurance will protect you when you require a rental car and when you are driving one.
When you know what coverage you require, and where to get it will save you from a colossal headache down the road.
Rental car insurance: Selecting your coverage wisely
Whether you use your own car insurance or purchase coverage from a rental company, it is good to make sure you have enough insurance to pay for expensive repairs if you experience an accident in a rental car.
Before you rent, get to know all your insurance choices.
If you already have car insurance, contact your insurance agent and determine if you will have enough coverage under your current policy.
You can even contact your credit card provider: Most provide coverage when you charge the rental.
Either way, these two choices might be inexpensive compared to buying insurance at the rental counter.
Which insurance will work best as rental car insurance?
Your car insurance
If you have auto insurance, the kind of coverage you purchased, together with its deductibles, often applies to rental cars also.
Assuming you bought collision coverage, it will cover damage you caused to any vehicle that you are driving.
But most car insurance policies state that your collision insurance is “excess” to any other coverage, which means that any coverage you purchase from the rental car provider takes effect first.
You should not forget that your own collision insurance needs you to pay a deductible before the insurer picks up the tab.
Your comprehensive coverage will probably apply to any rental car you drive and cover animal collisions, theft, fire or vandalism. Once more, your own comprehensive insurance coverage is excess coverage and is subject to your deductible.
If you are responsible for an accident, your rental car liability insurance will pay for the damages you cause to somebody else, plus any medical costs that occur from your carelessness.
Your liability insurance covers you up to the limits of your policy, and if at the time of the accident you were driving a rental, your car liability insurance, such as your collision and comprehensive, will probably be excess coverage.
Your credit card’s insurance
Most credit card providers give car insurance for rental cars benefits at no cost if you charge the cost of the rental on your credit card.
If it is not free, your provider might provide an inexpensive deal compared to if you bought it at the rental counter.
Credit card coverage differs tremendously from provider to provider.
Some credit card policies cover only damage to your rental car but not to other vehicles.
Others don’t give personal liability coverage for death claims or bodily injury. Do your research.
Rental car firm’s insurance
Rental car providers sell various kinds of waivers and insurance that widens your liability protection and relieves you of the liability of paying for a destroyed rental.
Collision damage waivers (CD) and loss damage waivers (LDW) from the rental provider basically take the place of your own comprehensive and collision insurance, which lets you off the hook if the rental car is vandalized or stolen, or if you crash the car.
Some loss damage waivers include the collision damage waiver, and some waivers need you to pay a deductible, similar to your collision and comprehensive insurance. But be cautious.
These waivers are not an insurance product since they are not sold or underwritten by an insurance provider.
It is the collision and comprehensive insurance version of the rental provider.
If you already have collision and comprehensive insurance for your own vehicle, do not duplicate coverage you already have.
However, if you have dropped your collision and comprehensive insurance or do not have car insurance, it is worth the money.
If you buy this insurance from the rental car provider, it becomes your main liability insurance.
Your own personal car liability insurance is, once more, relegated to the status of excess coverage.
A rental car provider might also offer to sell you personal property and accidental death insurance.
Many rental car providers also provide “personal effects” coverage for your personal property, which may get stolen out of the rental car.
Should you purchase rental car insurance?
Understanding all the coverage you currently have on your auto insurance along with the ones made available by the rental providers is quite difficult.
By purchasing all of the insurance provided by a rental car provider, can double your rental costs.
Purchasing none of it may get you in a bad financial position if you have an accident.
Below are some factors to consider:
If you do not have comprehensive and collision insurance and you are renting a car, it is smart to buy CDW or LDW, whichever your rental provider offers.
You may want to purchase the waiver, which offers you the broadest protection in this circumstance.
Rental providers have numerous levels of damage waivers.
You may turn down the loss damage waivers altogether if you have comprehensive and collision insurance since you would be paying for “double coverage.”
However, keep in mind that you still need to pay your deductible if you crash the car, is vandalized or stolen.
If you do not have personal car insurance, you need to compare products provided by your rental car provider, credit card provider, and a non-owners car insurance provided by regular car insurance providers.
Also, keep in mind that most states need the rental providers to automatically offer at least the minimum needed liability insurance at no cost to you.
In case you have your own liability insurance, it will typically kick in first in case of an accident.
There is no deductible for rental car liability insurance.
When buying coverage at the rental counter, remember that their offerings of personal property and accidental death insurance offer you unnecessary “double coverage,” if you already have life, homeowners, health and renters insurance.
Your renters or homeowners policy usually covers personal property if it is damaged or stolen while in your car.
And your life insurance will pay out, no matter how you meet your end.
Holiday car insurance is coverage for travelers who plan to drive to and/or at their business or vacation trip destination.
Drivers of top of the range cars particularly need to ensure they have coverage before leaving on a trip.
Benefits of holiday car insurance
Even if you have some other sort of car insurance, you could benefit from buying more comprehensive travelers car insurance.
If you choose to get travelers car insurance, get ready to enjoy the following benefits:
Car repair or replacement
Full coverage to repair or replace your car as required after a break-down or accident while on vacation.
Medical expenses
In the event you or your passengers need hospitalization after an auto accident, travelers car insurance could cover your full medical expenses.
Accidental demise
If a car accident leads to your demise or a passenger, car insurance will cover entire funeral and cancellation costs for the benefit of your family.
Choices for high-end cars
Holiday car insurance is particularly essential for the top of the range car. Ensure your top of the range car coverage includes:
Foreign coverage
If you are driving your own vehicle, you might think you have the best luxury car coverage already; however, you might not be covered while out of the country.
Rental car company insurance
The expense of repairing or replacing a luxury car, even a rental, can cost you a lot of money Ensure you are covered, even if you are renting.
Car hire insurance when driving overseas
Whether you are taking your own vehicle overseas or renting a car when you arrive there, you should have insurance.
Keep in mind, it is simple to spend a lot of money on needless car hire cover, and the excess can be extremely high.
If you want car hire insurance abroad, you need to consider these tips:
- Look at what is included in the car hire
Based on the country you are traveling to, you may be legally compelled to have three kinds of basic insurance, and they are often included in your car hire costs and contact:
- Cover for property damage or injury suffered by a third party also called ‘supplementary liability’ or ‘third party cover.’
- Cover for damage to the car, also called ‘vehicle damage cover, ‘collision damage waiver,’ or ‘damage excess waiver.’
- Cover for the theft of the car referred to as ‘vehicle theft cover’ or ‘theft protection.’
- Understand credit card pre-authorization
When you sign a vehicle rental agreement, it often includes approval for the rental provider to charge your credit card for extra items.
This is why you typically need to show your credit card at the desk when you collect up your hire vehicle.
The car hire firm can take a payment from your card without letting you know or obtain your authorization.
In theory, a car rental firm could charge you the full ‘excess’ cover for even slight damage to the vehicle.
Ensure you examine the car thoroughly and document every mark and scratch.
When you return it ensure the hire service provider signs and documents each mark so that you both agree on the state it was brought back in.
- Look at the small print
Go through all terms and conditions on the internet before you purchase (though sometimes the full documentation is only offered at the desk) when you go to collect the vehicle.
- Check you are covered for unlimited daily mileage if you are traveling long distances.
- You should look at your credit card statement at the end of your tours to ensure there are no rogue charges. If you find any charges, you want to dispute you should report them to both your credit card company and the hire company who will help resolve this for you.
Consider van hire excess insurance so you do not pay excess.
You can buy excess reimbursement insurance to cover yourself always, which lets you claim your excess back (if charged).
This cover comes with things not often included in any top-up insurance, for instance, lost keys or tyre damage.
However, you cannot get it for camper vans or prestige cars.
If you are traveling, car hire can be a beneficial option, particularly if you are looking to see as much of the area as possible without depending on public transport.
It can also be an inexpensive choice as well; however, there are some things you may need to consider if you are looking to make savings on car hire and make the most out of it:
Book in advance:
Doing your research to get the best car hire deals might appear obvious; however, that does not stop most people from leaving it until the last minute, or even waiting until they get to their destination.
Advance booking can help you save serious money that could provide you with more money to enjoy during the tour.
Note down all damage:
Before driving away in your hire vehicle, you need to thoroughly inspect it over for any damage, and have this documented.
While it is likely somebody will do this for you if they happen to miss a scratch it could end up costing you afterward.
So, take some time to check thoroughly, and, if necessary, think of taking photos of the state it is in before you drive.
Ensure everything that is intended to be in the car (like a spare wheel) is there as well.
Why you need to purchase rental car insurance coverage
So you are going on a holiday and renting a vehicle.
Before you get the loaner at the counter or log onto the rental car site, you need to think carefully regarding one of the first questions you will be asked; will you be buying rental car insurance coverage?
Many consumer and financial reporters in the media will say never to purchase it. However, that advice is uninformed.
Spending some extra money for rental vehicle insurance might be one of the wisest things you can do.
If you have renters, car or home insurance, the first call you need to make is to your current agent.
Explain that you intend to hire a car and ask how your existing insurance covers the loss of personal property and damage to the rental car.
If your car insurance contains comprehensive and collision coverage, then this must also cover the rental car within the limits of your existing coverage.
If you charge the cost of the rental on a credit card, your credit card might include rental car loss damage waiver as a cardholder benefit.
However, do not stop there assuming that since you have car insurance with comprehensive and collision insurance, or charge your rental on a credit card, that rental vehicle insurance is a waste of your cash.
Below are three solid reasons why getting car insurance for rental cars can be worth every penny.
- In most states, car insurance policies do not pay for the “loss of use” of the rental car provider, which is the loss of rental fees by the service provider while the vehicle is in the shop for repairs. If you would like to cover this, then you should purchase the rental car insurance.
- Intending to drive the vehicle out of the country? Before you do, look into the insurance limits needed by those countries, and you might find that your existing insurance is lacking.
- Another consideration is coverage for personal effects. When traveling with iPods, digital cameras and laptops, the possibility something will get stolen or lost while traveling is higher. The costs of replacing to these things will surely mount up. If you have renters or homeowners coverage, especially the form that includes replacement value insurance for personal property, then your existing insurance must cover this. However, many people have increased their deductibles to offset soaring car rental insurance cost. Only a loss in excess of the deductible will be covered by your current insurance.
Given the fairly low-cost of personal effects coverage provided by rental car insurance, the additional insurance is worth it.
Still not persuaded? Then consider this.
In case you file a claim on your personal car insurance plan for an accident you cause with a rented vehicle (which might be probably because you are driving an unfamiliar vehicle in a strange location), your existing car insurance provider might mark you as a higher risk driver.
The outcome is an increase in your car insurance premiums.
It might be better to pay for car insurance for rental cars for the few days instead of risk many years of higher car insurance premiums.
Timing could be everything when searching for a rental car; you may find a low rate; however, if you sit and expect cheap rental car insurance, you might miss out on a deal.
However, there are other secret methods to get the best price. Take advantage of these three techniques, and perhaps even score an upgrade.
Avoid insurance potholes
Your travel insurance, credit card, or personal car insurance, might cover your car during your rental.
Check it out it up before you rent, and also read the fine print. It could help you save some money on the on the cost of your vehicle.
You should not forget to bring proof of your insurance coverage; more and more, car-rental providers have begun to demand this before you pick up the car.
Try lesser-known websites
The least competitive deal may be the one you find on the website of your car-rental company.
Rather, try an aggregator.
Outwit fees
Rental providers usually price their cars in odd ways, as well. For instance, vehicles rented at the airport happen to be costlier due to added fees and taxes.
Rent at an off-airport spot and you could save 20 % or more.
If you love driving and value your freedom, you will want to keep using a vehicle, even when moving to another country, where you might have to get accustomed to different traffic conditions.
For expat drivers, car insurance is a huge part of staying safe.
If you are intending to have a trip overseas and are driving a car yourself, you should think of buying international car insurance.
Insurance is something all of us hate paying for but are pleased we have it when we need it.
You should have car insurance at home; being in an unfamiliar country is not any different.
There are always facts to think of when traveling.
Benefits of buying international car insurance
If you’re driving a borrowed car or your own overseas, you will have to think of buying car insurance.
With full coverage, you will get similar coverage to what you have at home; medical, liability, collision and comprehensive and personal property insurance.
With this insurance coverage, just about any situation about an accident will be covered.
In some instances, it is even more essential.
If you are driving your own car, it will be noticeable with a license plate from a different country.
If the area you are visiting has a criminal element, intentional accidents or theft can take place.
Several times, vehicles with foreign license plates are vandalized, or criminals might break into the vehicle while the driver is away from the car.
There is also the possibility of local law enforcers apprehending you for an at-fault accident.
In case you are visiting, any financial requirements not paid might cause your exit from the country to be restricted.
Good international insurance will cover any financial constraints.
Most international car insurance can be packaged with additional coverage kinds like legal representation, hospitalization, trip insurance, personal property loss and even medical.
Most will also help in credit card or money replacement in the event of you robbed.
Disadvantages of buying international car insurance
Some insurance plans will cover you for driving a borrowed car in a foreign country.
It may have limitations like time in the country. It is advisable to consult your insurance provider before buying any additional coverage.
In many cases, international car insurance is a lot costly than you would have to pay back home.
There might be limitations or other fees enforced by the country you are visiting.
One restriction enforced by the insurance providers is that coverage is just for business-related transportation and not personal driving.
This kind of insurance is only valid for a borrowed car; because rental car providers might need you buy car insurance as part of the rental agreement.
Without actual evidence of coverage, they may reject outside insurance policies when renting.
When traveling to a foreign country, laws, driving habits and even which side of the road to drive on may be different.
Plus with different regulations, if you don’t have to drive your own car, it may be wise to hire a car and driver, use public transportation or taxis. By doing this, you can sit back and enjoy your trip.
Many tour agencies and hotels can arrange for vans or cars with drivers for a couple of hours or a couple of weeks.
If you intend to visit is and drive to multiple countries, most include different restrictions and may need you buy insurance in their respective country.
With the costs and restrictions, once more it may be a good idea to hire a driver.
Conclusion:
Before you rent a car, check your renters, car insurance, and homeowners policy to get proper picture of what coverage you have while in the rented car.
And while at the rental car provider, take the time to know just what they offer.
Compare those insurances to the ones you already have. By doing this, you can avoid purchasing coverage you do not need.
You need to know what your insurer covers before you travel, to help you see whether the cost of the collision damage waiver is worth it.
Ask your policyholder in depth questions regarding how you will be covered in a rental car accident and the things you might be accountable for.
A five-minute call may save you lots of money in the end.