|
When renting a car, you
need insurance. If you have adequate insurance on your own car,
including collision and comprehensive, this may be enough.
Before you rent a car:
-
Contact your insurance company.
Find out how much coverage you have on your own car. In most cases,
the coverage and deductibles you have on your personal auto policy
would apply to a rental car, providing it's used for pleasure and
not business. If you don't have comprehensive and collision coverage
on your own car, you will not be covered if your rental car is
stolen or if it is damaged in an accident.
-
Call your credit card company.
Find out what insurance your card provides. Levels of coverage vary.
If you don't have auto insurance, you have two choices: you can buy
coverage at the car rental counter; or you can purchase a a non-owner
auto liability insurance policy.
Rental car
counter insurance
Rental car counter insurance can provide the following coverage:
-
Collision Damage Waiver (CDW).
Sometimes called a Loss Damage Waiver (LDW), this coverage relieves
you of financial responsibility if your rental car is damaged or
stolen. The CDW may be void, however, if you cause an accident by
speeding, driving on unpaved roads or driving while intoxicated.
This coverage generally costs between $9 and $19 a day. If you have
comprehensive and collision on your own car, you may not need to
purchase this coverage.
-
Liability Insurance.
This provides excess liability coverage of up to $1 million for the
time you rent a car. Rental companies are required by law to provide
the minimum level of liability insurance required by your state.
Generally, this does not offer enough protection in a serious
accident. If you have adequate liability coverage on your car or an
umbrella policy on your home/auto, you may consider forgoing this
additional insurance. It generally costs about $9 to $14 a day. If
you don't own a car, and rent cars often, consider purchasing a
non-owner liability policy. This costs approximately $200 - $300 per
year. Frequent car renters sometimes find this more cost-effective
than constantly paying for the extra liability coverage.
-
Personal Accident Insurance.
This provides coverage to you and your passengers for
medical/ambulance bills. This type of insurance, usually costs about
$1 to $5 per day, but may be unnecessary if you are covered by
health insurance or have adequate medical coverage under your auto
policy.
-
Personal Effects Coverage.
This provides coverage for the theft of personal items in your car.
However, if you have homeowners or renters insurance, you may be
covered for items stolen from the car, minus your deductible. You
need to have receipts or other proof of ownership. This type of
insurance usually costs about $1 to $4 per day.
Some rental car companies combine personal accident
and personal effects coverage together as one type of insurance, while
others sell it individually.
The cost of insurance at the rental car counter will vary depending on
the rental car company, state, and location of the dealer and the type
of car you rent.
Some rental car companies may check your credit and driving history and
may deny coverage. Check with the rental car company to find out its
policy.
Non-owned auto
liability insurance
Instead of buying liability coverage from the car rental company each
time you rent a car, you can purchase a non-owner auto liability
insurance policy from an insurance company for about $300 a year which
might be cheaper if you rent frequently.
In addition, if you're thinking of buying an umbrella liability policy,
a non-owner auto policy may meet the underlying auto insurance policy
requirements. Umbrella liability insurance provides high limits of
liability coverage above basic policies. Most insurers will not issue an
umbrella liability policy unless the basic policies meet certain dollar
limits of coverage.
A non-owned auto insurance policy covers you for damage you may cause to
some else’s car and liability for injuries to its occupants, or to
pedestrian, in the event of an accident. The policy will also provide
medical payments coverage for you and your passengers, and under-insured
and uninsured coverage. This pays for the cost of an accident involving
a hit-and-run driver or a driver who has little or no insurance.
However, non-owned auto insurance does not provide collision coverage.
Collision coverage pays for damage to the car you’re driving if you
crash into another car or object or the car rolls over. You have to buy
this from the car rental company. However, some credit cards provide
collision coverage if the rental car is paid for with the card—so check
with your credit card company first.
Note: If you're renting
a car abroad, you may need an international drivers license.
©
Insurance Information Institute,
Inc. - ALL RIGHTS RESERVED |
