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Rental Insurance Coverage

The flight was long, the kids are fighting, and you just want to get your license and credit card back, sign whatever paperwork is necessary and jump in your car to start the vacation. But the agent at the rental counter is running you through the gauntlet.

Interested in an upgrade? “If it’s a red Mustang convertible for the price of a subcompact, sure. Otherwise, this is fine.”

Need a GPS or directions? “Nope, I’m good. Never get lost.”

Do you want to pre-pay or return the gas tank full? “I’ll fill it.”

Insurance? “Ah…”

So what should you do? If you own a car and have insurance on that car you may already be covered. But it depends on your policy. Many credit card companies also cover their cardholders with automatic, supplemental coverage when they use the card to rent a car.

We recommend checking with your credit card company and, most importantly, with your independent insurance agent, who can review your policy and give you specific recommendations. But let’s tackle 5 common questions:

1. What are Loss-Damage Waiver (LDW) and Collision-Damage Waiver (CDW) and should I buy them?  They’re one in the same, and essentially it transfers liability for damage to the rental vehicle from you to the rental company if you get in an accident, the vehicle is damaged for any reason other than collision or the car is stolen. Check your insurance policy before leaving home. As long as you have collision and comprehensive coverage on your own car your rental is likely covered but ask your agent about potential exclusions so you can make an informed decision.

2. Will I have to pay a deductible? Most likely.

3. Probably a good idea to get supplemental Liability Insurance, right? Again, not necessarily. This covers damage you may cause to property and / or injuries to others in an accident. You may be covered by your existing policy. However, ask your insurance agent about coverage limits and potential exclusions, so you can make an informed decision.

4. Should I sign for Personal Effects coverage so my camcorder and the kids iPads are covered if stolen from the car? As long as you have home or renter’s insurance you’re likely covered in the event something is stolen from inside the car. Your homeowner/rental policy deductible will apply. We do recommend keeping track of which personal items you have with you and, in the event of a theft, contact the police and file a report.  If you do need to leave something valuable in the car, keep it hidden.

5. They said if I’m hurt in an accident I’ll want to have personal accident coverage to pay medical bills. True? It depends upon what type of auto policy you have. If you have personal injury protection on your own auto policy, you and your passengers may be covered up to a limit. This is another topic, though, you’ll want to discuss with your agent. It may also be helpful to check with your health insurance provider regarding coverage areas while traveling.

So, once you book that dream vacation make sure you talk with your insurance agent about car rental insurance. If you do need insurance from the rental agency make sure you read everything carefully since it is often non-standard. Drive safely so you won’t need the coverage, regardless of who is supplying it.


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