Because car rental insurance is not something most of us do regularly, when we need to choose this kind of coverage, it is easy to misunderstand or get distracted. You need to learn some basic information about rental car insurance and whether or not your personal automobile insurance policy requires additional coverage.
Rental car insurance is a must for some drivers. It is a redundant cost for some. However, how do you know in what group are you? It's worth checking your personal car insurance policy before you rent a car. The insurance you have on your own car in some cases applies to a car you hire. In other words, you might double what you already pay for while purchasing rental auto insurance cover.
However, the added expense of the rental coverage may be meaningful in a few situations. Therefore, it is important to consider what is covered by your personal car insurance and what the rental agency offers.
Can I rent a car without car insurance?
When it comes to traveling with rental cars, the most common question is "Do I need insurance coverage for a rental car?" But you don't even want to cover needless duplicate insurance coverages which can double the cost of your rental, as long as you and your rental car are insured.
The only response to that is "yes." Without auto insurance, you can rent a car. This is also one of the causes why car rental firms, first of all, offer their coverage. The truth is that rental cars are covered automatically although on minimum requirements. Also, car rental companies offer additional insurance so you can cover yourself in the event of an accident.
Usually, it does not make sense for you to use extra money (up to $40 a day) to cover the insurance of the rental car firm since you have your own insurance coverage.
But you'll need to purchase a part from the rental agency if you do not yet have your own policy.
3 things to consider before buying rental car insurance
You should ask yourself three questions prior to buying car insurance from the rental agency:
- What does the rental car company’s insurance cover? Some rental firms cover the State minimum liability insurance needed automatically, but you have to ask. In some states, requirements can vary slightly.
- Am I already covered by another policy? And, if you have health insurance through work, at least in an accident in which you are injured, you will probably still have health insurance coverage. Travel insurance can also in some cases cover rental cars.
- Does my credit card offer car rental insurance? Many credit cards provide coverage for car rental. You must use the card to take benefit of this coverage. Find out precisely what is protected by your credit card provider before renting out and what are the exemptions.
When is rental car insurance coverage a good idea?
You must at least purchase a liability policy from the leasing company before you get on the road since you currently don't have any coverage. This is because, in most countries, the law requires liability provisions for all drivers.
If any of these scenarios apply, it is worth considering the additional cover offered by rental insurance:
- Your current policy doesn't have comprehensive and collision coverage
- You're only insured under a commercial car insurance policy
- You don't want to risk paying a high deductible
Your existing car insurance probably won't protect you if you drive abroad (except in Canada). To find out about this, check your policy.
Vehicle rental can be a costly and complex experience. There is a lot of paperwork and few people try to read it completely. After all, it's written in two languages, and most car rentals take place at an airport terminal, where customers waiting impatiently and in great haste to go somewhere else. Most people simply sign the documentation and agree to what the agreement says. Often this can lead to an expensive rental experience.
Rental car companies typically sell you rental insurance with respect to the rental fee. In case of an accident in a rental car, this insurance protects you. Many consumers will already have this extra policy doubling the coverage they have.
What types of policies are available?
With a variety of cover levels, there are several different policies. Some of the most significant are:
- Collision Damage Waiver: Protects you if the bodywork gets damaged.
- Theft Protection: You won’t have to pay for a new car should yours get stolen.
- Third-Party Liability: This protects you if you damage or hurt anything/anyone while you are driving.
How does car hire work?
All leasing companies can give you basic coverage when renting a car. It's usually referred to as CDW or LDW. CDW an abbreviation for Collision Damage Waiver while LDW is short for the Loss Damage Waiver. Both of these coverage forms are almost the same thing and protect only some parts of the vehicle you leased.
You must therefore check the policy in advance. Typical elements of this form of insurance include theft, damages, and third-party liability. The third-party liability applies when you damaged or injured something, and is normally not included when renting a vehicle in America or Canada.
In addition to the auto coverage provided by car rental companies could be one of the following items:
Liability insurance - This means that if you cause damage to another car if an accident happens. It would include fixing a broken car or providing funds if it was to purchase a new vehicle. Your personal car insurance policy would probably provide you with liability insurance if you rent a car.
Personal accident insurance - This deals with the medical bills of drivers or passengers in another vehicle if you have an accident. This could cover treatment costs, operational costs, or any incidental medical costs.
Collision Damage Waiver (CDW) - If you have a car accident driving a rental car, you are liable for damages caused to your rental car. The purchasing of CDW would alleviate the financial burden, but at a price - many of them are demanding around $20 a day. If you use their credit card to pay the rental costs, a few major credit cards offer coverages for this. Before grabbing your rental car, you can seek advice from your bank card firm.
Some rental companies will provide additional insurance protection for your vehicle's loss of personal belongings due to theft. This will cover the loss involving suitcases, skis, golf clubs, or anything you might be traveling with.
It is a terrible idea to rent a car without any extra insurance cover. You may want to purchase certain insurance coverage while you rent the vehicle if you do not own a vehicle or have your own car insurance policy.
At least the crash damage waiver must be purchased, even if an accident occurs, you will be held accountable for the full costs of a new car. Again, many automotive insurance policies expand the protections for their customers into rental cars, thereby making further insurance purchases unnecessary.
The wise thing is that before you grab your rental car you notify your insurance provider as well as your charge card provider. Ask them what coverage, if any, you could have from current procedures. You will notice you are protected from anything with your current insurance policy. You can then pick up and enjoy your ride in this situation. You can enjoy the cash you save on your car policy elsewhere.
What is a car hire excess insurance?
While the basic coverage is provided for you, this also involves an "excess." This ensures that you must make a contribution to the car repair, regardless of who is at fault. This can be up to $2,000, so it's important to know what you are responsible for before you buy a policy.
The key to excess insurance is that it would not otherwise protect the most vulnerable areas of the car. This covers windscreens, cars, and vehicle roofs.
Do I need a car hire excess insurance?
Like other insurance forms, if you don't want to, you don't need to get it. But you can pay a nominal fee to avoid paying a bigger one for car hire excess insurance. Sometimes, you would not be protected for items like broken windscreens or tires, which can be destroyed quickly, with the fundamental insurance given. It can be handled by a third party or by the rental company themselves, generally known as 'Excess Reimbursement Insurance.'
One problem that you can examine is how the insurance is paid. Sometimes, leasing firms ask you to pay using a credit card, since they are confident that they will get the money if an accident occurs. If you pay by credit card, you probably have to take excess premiums, which could potentially cost you even more.