Should I Buy Rental Car Insurance?
Rental car agencies have a menu of insurance policies they would like to sell
you. While each policy could be of some benefit under the right circumstances,
you should review each plan (its provisions, limitations, and exclusions) before
making a purchase. It is a good idea to request the detailed information from an
agent at the rental office, as most companies only provide a summary on their
Web sites.
Keep in mind; you may not need to buy this additional car insurance because
you have auto insurance from your own car insurance company. Generally speaking,
when you rent a car, the liability coverage limits you have in your own auto
insurance policy remain in effect with the same limits. In addition, the
comprehensive and collision coverages you have in your own auto insurance policy
remain in effect with the same deductibles. You do have comprehensive and
collision coverage don't you?
You may also have some kind of additional auto insurance coverage through
your credit card but it is important that you check your credit card information
for specific details. Some cards only offer coverage if you rent your car from a
particular agency. Some limit the days for which coverage is available. Some
will only provide coverage for certain types and/or classes of cars. With some
cards, the coverage is not automatic and you must enroll in a program to get
coverage. Some cards that advertise automatic rental insurance really only
reimburse you for the deductible that you would have to pay under your regular
insurance policy. Still others may provide only collision and comprehensive
coverage, leaving you exposed for personal injury or property damage to others.
Rental car agencies typically offer liability coverage in two parts - a
supplemental liability policy protects against claims from others and a Loss
Damage Waiver (LDW) covers the rental car. LDW is not technically insurance;
rather, it is a company's agreement not to hold the consumer liable for loss
from all or part of any damage to merchandise.
Before you rent a vehicle, realize the charges you could be responsible for
and how these charges are covered or not covered by both your own auto insurance
policy and the car insurance the rental company is offering.
If you suffer a loss that is not covered under your auto policy, check your
other insurance policies. For example, if personal property has been stolen from
your rental car, it may be covered under your homeowners or renters policy.
Similarly, certain medical policies may cover costs of injuries not covered by
your car insurance policy.
As always, check with your insurance company to find out exactly what is
covered under your own auto insurance policy.
