Rental Car Insurance: To Buy Or Not To Buy?
The age old question of whether to buy the rental car company’s extra insurance or not. It’s haunted man since the beginning of time.
Whether you buy it or not, it’s wise to make certain you have enough coverage to pay for costly repairs if you should happen to suffer an accident in a rental car.
Before You Rent
Before renting, familiarize yourself with your insurance options. If you already have car insurance, call your insurance agent and find out if you will have enough coverage under your existing policy.
You can also call your credit card company: Many offer coverage when you charge the rental. Either way, these two options may be cheaper than purchasing insurance at the rental counter.
To Buy Or Not To Buy
Making sense (and cents) out of all the coverages you already have on your car insurance and the ones that are offered by the rental companies is not easy.
Buying all of the insurance offered from a rental car company can double your rental costs. Buying none of it might put you in a bad financial spot if you have an accident. Here are some factors to keep in mind.
If you don’t have collision and comprehensive insurance and you’re renting a car, it’s a good idea to purchase the Loss Damage Waivers (LDW) or Collision Damage Waivers (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.
You might decline the LDW altogether if you have collision and comprehensive coverage because you’d be paying for “double coverage.” But remember that you still have to pay your deductible if the car is stolen or vandalized, or if you crash it.
Compare Your Options
If you don’t have personal auto insurance, you should compare products offered by your credit card company, rental car company and a non-owners auto insurance offered by regular auto insurers.
Also, remember that most states require the rental companies to automatically provide at least the minimum required liability coverage at no charge to you. If you feel that you can get by with just the bare-bones policy, you won’t spend a dime on liability insurance.
If you have your own liability insurance, it will generally kick in first in the event of an accident. There’s no deductible for liability insurance.
When purchasing coverage at the rental counter, keep in mind that their offerings of accidental death and personal property insurance give you needless “double coverage” — if you already have health, homeowners or renters and life insurance.
Typically, your health insurance (or auto insurance if you have MedPay) will kick in for your medical costs, regardless of what car you’re driving.
Your homeowners or renters policy normally covers personal property if it’s stolen or damaged while in your car.
To Sum It Up
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.
I can see that look on your face. Still want to talk this out?
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