Sunday, December 19, 2010

Do you really need that extra car rental insurance?

Business traveler Rey Manes often times declines the extra car insurance when he travels.  He has thought at times the extra care could have come in handy even tho he estimates he's saved thousands of dollars over the years.

What are you REALLY getting when you purchase the extra protection?  If you have car insurance, the type of coverage you bought, along with its deductibles, usually applies to rental cars as well.

 Assuming you purchased collision coverage, it will cover damage you cause to any car that you're driving. However, many auto insurance policies say that your collision insurance is "excess" to any other coverage, meaning that any coverage you buy from the rental car company kicks in first. Don't forget that your own collision insurance requires you to pay a deductible before the insurance company picks up the tab.

If you cause an accident, your liability insurance will pay for the damages you cause to someone else, plus any medical expenses that arise from your negligence. Your liability insurance will cover you up to the limits of your policy, and if you were driving a rental at the time of the accident, your personal auto liability insurance, like your comprehensive and collision, will likely be excess coverage.

 A lot of car rental companies do offer the extra protection that really allows you to be 100% worry free.  We paid an extra $15 per day for insurance from Enterprise Car Rentals that allowed us to "bring back the car with damage and pay nothing."

 So should you buy the protection?   Some things to remember...

If you don't have collision and comprehensive insurance and you're renting a car, it's a good idea to purchase the LDW or CDW, whichever your rental company offers. You might want to buy the waiver that offers you the broadest protection in this situation. Rental companies have several levels of damage waivers.

As a summary:  Before you rent a vehicle, check your auto and homeowners or renters policy to get an idea of what coverage you have while in the rented vehicle. And while at the rental car company, take some time to find out exactly what they offer. Compare those coverages to the ones you already have. That way, you can avoid buying coverage you don't need.   But if you got the extra cash and seek peace of mind, you can always just buy the extra coverage and cruise down the road to worry about other things, such as where to book your hotel that night.

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