It’s no secret that rental car insurance can be very expensive. Adding a collision damage waiver can increase the cost of your rental by as much as $15 per day. If you also add other available coverage types for your personal belongings, liability, and injuries, your car rental bill could more than double. If you are tired of paying outrageous prices for your rental cars, continue reading to learn whether coverage at the counter is all it is cracked up to be.
Benefits of Rental Car Insurance
Sometimes, the coverage offered at the rental counter is either advantageous or perhaps even necessary. If you do not have any alternative source of coverage, for example, the collision damage waiver and liability coverage are a must. Even if you do have other coverage options, however, there are reasons you might consider opting for the collision damage waiver anyway.
No Shared Financial Responsibility
If you carry a large deductible on your car insurance policy and do not have a credit card with secondary coverage, it might make sense to take the collision damage waiver – especially for short-term rentals. It guarantees you will not have any out of pocket costs if something happens to the car.
No Claims History
If you are worried about filing a collision or comprehensive claim on your personal insurance, the collision damage waiver can protect you from a black mark on your record. If you are claims-free, one new claim could disqualify you from discounts and raise the cost of your personal coverage. If you already had a few claims on your record, adding another one might even affect your ability to find an insurer willing to provide coverage in the future.
So long as any damages that happen to the rental car occur do not violate the terms of your loss damage waiver, you can simply turn in the keys and walk away. All of the responsibility will be transferred to the rental company, regardless of how big the loss may be. This is a stark difference from the experience you might have using a third-party source of coverage. Not only does it take time to settle claims, but there can also be disputes between rental companies and insurance companies over the value of the loss. Unfortunately, it is you who might get stuck in the crosshairs.
The Coverage You Already Have
In many cases, drivers who rent cars already have at least some coverage available to them when they rent vehicles. Some of the most common sources of pre-existing insurance include:
- Personal auto insurance
- Health insurance
- Credit card membership benefits
- Umbrella insurance
- Trip insurance
We recommend contacting your independent insurance agent and your credit card company to find out the details surrounding your existing coverage and how it might affect you if you need to file a claim. The collision and comprehensive coverage on your personal auto insurance, for example, should follow you to cover your rental car. However, you will still be responsible for your deductible, and you may need to float the cost of repairs on a credit card until the claim is settled.
If you own one or more credit cards, be sure to learn about the benefits on those cards before paying for your rental car reservation. Most card companies offer at least some rental car damage coverage. While a select few of them feature primary coverage that saves you from filing a claim on your personal auto insurance, most provide secondary coverage that picks up where your personal insurance left off. At the very least, the credit card company might pick up your deductible after a covered claim, allowing you to avoid out of pocket costs.