Straight answers to the nagging questions about Rental Car Insurance
Rental Car? At Huff Insurance, we recommend: Buy the insurance
There you are, just off the plane, at the Rental Car counter. From the plane, you’ve already seen the incredible color of the water… turquoise-blue, and crystal clear. Crowned by little tufts of foam. Framed by white beaches. As you walk to baggage-claim, you peek out the window and see palm trees swaying in a gentle breeze. At the airport, even! Palm trees! The only thing between you and two weeks of careless happiness is one more signature on one more sheet of paper. And off the grid you’ll be! You can’t wait.
Then, the question comes: “Would you like to purchase the insurance for your rental car?” Well, no. Or yes? But doesn’t your credit card provide coverage for rental cars? Plus you have Auto Insurance. At home, that is. But from what you’ve heard, they are all driving fast and furious here. So it might be smart to buy extra insurance…so, yes. But you don’t want to start your vacation spending a couple hundred dollars on an unaccounted-for expense. Ah, shucks! Now what?
Start your vacation off right and don’t let surprise questions catch you off-guard at your destination. When it comes to rental-car insurance, our answer and easy and straight-forward: Buy the insurance.
You have the option to purchase a “Loss Damage Waiver” (LDW) from the rental car company. If purchased, this waiver relieves you from financial liability for the loss of, or damage to the rental car and the parts and accessories that come with it.
We recommend buying the LDW for a variety of reasons:
If you cause damage to the rental car, the rental car company will likely require immediate reimbursement for the repairs. They won’t wait until a claim is submitted and processed. That means, they will charge (and possibly max out) your credit card to get the car fixed as quickly as possible. They won’t do that if you purchase the LDW.
Not only that: A rental car company only makes money when they rent out their cars. If the car is “on hold” because it is in a repair shop due to the damage you caused, the rental car company may also charge you for “loss of use”. This is also covered if you buy the LDW.
If you don’t have collision / comprehensive coverage on your personal auto policy, there also won’t be collision / comprehensive coverage available for the rental car. That means, you will be responsible if you don’t buy the rental company’s insurance. So – again. Buy the LDW.
If you do have collision / comprehensive coverage on your personal auto insurance, your policy will extend, but you still have to pay the deductible. Also, you may face a rate increase at your next policy renewal. If you buy the LDW, there is no deductible, and no potential rate increase for your personal auto policy.
Keep in mind: Even if you buy the LDW, there are likely to be some exclusions, such as only listed drivers are covered, you are not covered if you drive while intoxicated, or may not be covered on certain sections of road or off-road (such as the infamous road to Hana on Maui So, take a moment to read the fine print.
As to your credit card: Some credit cards will, indeed, extend to provide coverage for a rental car. But contracts vary from card to card, and some cards may only provide secondary or excess coverage, which requires you to file a claim with your auto insurance first. Call your credit card company to confirm coverage before your rely on them
Also, please keep in mind that your personal auto insurance will only extend protection in the US and Canada. If you travel abroad to Europe, Asia or South America and plan to rent a car, it is best to purchase maximum liability limits through the rental company’s coverage.