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Rental Car Insurance:
Should You Buy Rental Car Insurance?
Should You Buy Car Rental Insurance (Previous Page)
Next, Call the Credit Card Company.
Ask your credit card company about the benefits they offer. Each company is different, and each level of credit is different. For example, a regular card might have different insurance benefits than a gold or platinum card. Ask the card company to send you your benefits IN WRITING. If you're in a hurry, ask them to fax or email it to you.
Some cards may only cover collision and comprehensive, and leave you uninsured for liability. Some cards only offer coverage when you rent from a certain rental company. Some restrict the number of days of coverage. Some cards don't automatically cover you and require you to sign up for a particular program. Still others limit the kinds of vehicles you can rent. (see below for some exclusions)
If you have more than one credit card, call each one and find out the card with the best benefits. 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.
Credit card Collision Damage Waivers cover:
• vehicle damage
• loss of use
Collision Damage Waivers exclude:
• Injury to anyone or damage to anything inside or outside the rental vehicle.
• Loss or theft of personal belongings.
• Loss due to intentional acts, like DUI, drug use or other illegal activities.
• Off-road operations. If you rent an SUV and take it off-road, no coverage.
• Rental periods of more than 15 days within your country of residence, or more than 31 days in a foreign country.
• Vehicles that do not meet the definition of "covered vehicles," such as: expensive, exotic and antique vehicles; certain vans; pickup trucks; other trucks; motorcycles and ATVs.
See your credit card company's written CDW for all the details.
Car Rental Insurance
Most major rental car companies offer these four coverages.
1. Collision Damage Waiver (CDW). This covers a rental vehicle damaged by an accident, vandalism, theft or loss of use. Costs range between $9 and $20 per day.
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. Insurance is regulated by each state. Collision Damage coverage is a waiver. 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. In most states, car insurance policies don't cover loss of use. 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. But if you're using your credit card's automatic coverage, it will pay for that loss of use.
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. Being forced to come up with thousands of dollars in immediate cash could ruin a vacation. You're protected from these up-front costs by the CDW. Read your rental contract CAREFULLY!
2. Personal Effects Coverage. This provides coverage for theft or damage to personal items inside the rental car. Costs range between $2 and $5 per day.
3. Supplemental Liability Insurance. This provides liability coverage up to $1 million. Costs range between $7 and $9 per day.
4. Personal Accident Insurance. This covers you and passengers in your vehicle for medical expenses. If you already have personal health policies or travel policies, it won't be necessary to buy this optional coverage. It usually costs between $3 and $5 per day.
Corporate Travelers. If you're a frequent traveler for business, do one other thing. Check with your company to find out if they have a corporate travel policy. If they do, find out what that policy covers, and then simply don't buy duplicate coverage on the rental car contract.
Car rental outside your country of residence. Some insurers exclude coverage if you're driving in a foreign country. Some will cover you, but only a limited time. Some credit card companies cover car rentals outside your country of residence. Check with your insurance company and credit card company for specific details, and GET IT IN WRITING!
Frequent Car Rental Insurance Questions
Q: Can I allow others to drive my rental car?
A: If you're using your personal or business auto coverage to cover your rental car, the chances are all "authorized drivers" are covered. An "authorized driver" is anyone listed on the policy. However, here's a BIG GOTCHA! If your teenaged son drives your rental car and he allows his girlfriend to drive the car, you're covered. If the girlfriend allows another person to drive, NO COVERAGE!
Some car rental companies have exclusions for young drivers. Some charge extra for young drivers. Find out this information BEFORE you arrive at the car rental counter.
Q: How do I file a claim if I've had an accident?
A: When you experience the damage or theft, immediately get a camera and take lots of photos of the damage, including any other autos or property that was damaged. Keep those photos! Notify the rental company IMMEDIATELY of the damage.
Report the damage to your own auto insurance company if you have personal or business coverage.
When you return the vehicle to the rental company immediately ask for:
• A copy of the accident report and any claim documents, which should show the amount you're responsible to pay, as well as any amounts that have been paid toward the claim.
• A copy of the initial and final auto rental agreements.
• A copy of the repair estimate or the paid repair invoice.
• A police report, if one exists.
So the bottom line is this: 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. Your situation may vary.
Get everything in writing, and make an informed decision. Then enjoy your car rental experience!
Article by Russell Longcore. Russell has two special reports at no cost. One is 5 Things To Do When Shopping For Car Insurance, and the other is 5 Things To Avoid When Shopping For Car Insurance. Each one is a $9.95 value, but free to you when you sign up for my newsletter at the website address below. Do Not Buy Insurance, or Submit an Insurance Claim Without Visiting This Website! Check out: http://www.insurance-claim-secrets.com
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