The Simple Truth About Rental Car Insurance
It’s not uncommon for rental car agencies to offer you the opportunity to purchase additional auto coverages on your rental, but do you need them? Before you rent a car, contact ARCW Insurance to find out how much collision and liability coverage you have on your vehicle. In most cases, the coverage and deductibles you have on your personal car insurance policy would apply to a rental car, providing it is used for pleasure and not business.
Decide Before You Ride
The best time to make the decision about whether you will need extra rental car insurance is before you’re standing at the car rental counter. Read on to learn about car rental insurance considerations and what you need to know to make sure that you’re covered.
It’s not uncommon for rental car agencies to offer you the opportunity to purchase additional auto coverages, but do you really need them?
Collision Damage Waiver (CDW), or Loss Damage Waiver (LDW), relieves you of financial responsibility if your rental car is damaged or stolen. If you have comprehensive and collision on your own car, you most likely do not need to purchase CDW from the rental car agency.
Additionally, your credit card company may include some collision and theft protection if the rental car is paid for with your card. This includes coverage for “loss of use,” which refers to the amount of money a rental car company can stand to lose while a car is being repaired. If your credit card doesn’t offer coverage for loss of use, you may want to consider purchasing CDW from the rental agency.
Liability insurance provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. Generally, this does not offer enough protection in a serious accident. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance.
Auto Policy Options
If you don’t already have comprehensive and collision coverage on your own car, you will not be covered if your rental car is stolen or if it is damaged in an accident. If you plan to rent a vehicle frequently, your best bet is to purchase a non-owner auto liability Insurance policy.
A non-owner auto liability insurance policy covers you for damage that you may cause to someone else’s car and liability for injuries to its occupants, or to pedestrians, in the event of an accident. The policy will also provide medical payments coverage for you and your passengers, and under-insured and uninsured coverage. This pays for the cost of an accident involving a hit-and-run driver or a driver who has little or no insurance.
However, non-owner auto liability insurance does not provide collision coverage. Collision coverage pays for damage to the car you’re driving if you crash into another car or object, or the car rolls over.
If you drive an older vehicle, but plan to rent a luxury vehicle, it’s important to make sure that your existing car insurance policy will cover the complete cost of the replacement value of the vehicle you are renting.
In addition to a non-owner auto liability policy, an umbrella liability policy is also an option to meet the underlying auto insurance policy requirements when renting a vehicle.
One more thing to note: if you are renting a vehicle that is not classified as passenger car (such as a moving truck, 15-passenger van, etc.), you must purchase a separate policy from the rental company to be covered in that vehicle.
Renting a car outside the United States?
In general, your U.S. auto insurance does not cover you abroad. However, your policy may apply when you drive to countries neighboring the United States. Check with our agency to see if your policy covers you in Canada, Mexico, or countries south of Mexico.
Car rental agencies overseas usually provide auto insurance, but in some countries, the required coverage is minimal. When renting a car overseas, consider purchasing insurance coverage that is at least equivalent to that which you carry at home.
Keep in mind, if you are renting a car abroad, you may need an international driver’s license.
This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. Should you have any questions or would like to discuss your risk exposure with your family’s car insurance, please contact the insurance pros at ARCW Insurance. We are here to help.