Most of us have been there before. We make all the proper arrangements for our trip, which sites to visit, booked the hotel with the right room package. We even have picked just the right car for that road trip that we need to rent. When the days comes everything seem to work out just fine until you set foot in the car rental agency wanting to pick up the keys to that rental car. When the final bill comes and we have picked the most comprehensive insurance package, we are shocked that the price of the rental car suddenly doubled. Looking through the details, you find that it is the car insurance that is doubling the rental costs. It is quite normal for people to get very aggravated and even shocked that something like the insurance for their rental car can cost so much. In this article it is our hope that we can bring to light some common ways to first arrest the rental car insurance costs and also to look at ways to reduce them substantially.
In order to full understand rental car insurance, we need to know the different types that are available to us. Below we will list the commonly available coverage types.
CDW (Collision Damage Waiver), LDW (Loss Damage Waiver), PDW (Physical Damage Waiver) It is the most basic of rental car insurance coverage that you need. Basically, if you cause an accident an anything happens to the car, you don’t need to pay for the damage. There are however limitations. The limitations will be set by the policy and are normally things like mileage, distance from city or even if you were caught drunk driving.
LIS (Liability Insurance Supplement) This insurance is in addition to the one above. It will cover any third party that is involved with any accident that happens with the rental car.
PAI (Personal Accident Insurance or Coverage) This coverage is also in addition to whatever is above and covers the passengers and whatever damage or maiming requiring hospitalization.
PEC (Personal Effects Coverage) or Personal Property Insurance This is the least important of all the coverage options that we have listed above. It covers whatever personal belongings that you have in the rental car if it should be lost in an accident of a break-in.
The insurance coverage items that we have described to you above are ordered from the most basic at the top to the extras at the bottom. The most basic insurance package that individuals should drive away with are at least a combination of CDWs and LISs. This is the very minimum coverage that we consider safe. Any less and you could be in for a very messy and prolonged case if you do get into an accident.
Another thing note is that if you have comprehensive car insurance for your own car, it might still apply to your rental car. Some comprehensive car insurance products are so “comprehensive” that they even have some coverage options for any rentals that you might have in the same country. This is again, very dependant on the insurer that you have. If you aren’t sure of what options you have, it would certainly be worth your while to give you current insurer a call and see what your policy offers with rental car insurance. That being said, you can’t be too careful. Never assume you are covered unless you check.
In some rare cases, credit cards may even have some insurance coverage that can be extended to rental car insurance too. This is particularly the case with higher end “gold” or “platinum” cards which have a focus on the regular traveler. Most of the time these cards will have some sort of personal effects coverage or even extend an personal accident coverage too. Again, each person would have a very different circumstance and it would be prudent to check with your credit card provider before signing on the dotted lines.
We think that the best way to approach this is to first check with your current car insurance company and also your credit card company. Give them a call before you even venture to the rental car agency. There really is no point in doubling up your insurance policy as you won’t be able to make use of both. If you already have the coverage from either your car insurance provider or your credit card an overlap will simply be a waste of your money.
You should also do well to know that most car rental agencies will push you to use their insurance products. It is almost certain that they will charge you more as they know you aren’t in a position to choose when you are already at the rental car lot. It is quite normal to find that for the same coverage, the rental agencies will charge almost double the amount that you’ll find elsewhere. This is because the rental agencies act sort of like an agent for the insurance products and will often take a very large commission from the underwriters.
Here is a pretty got saying for you to go with. It is necessary to get rental car insurance however it isn’t necessary to get it from your rental car agency. This rings so true most of the time. Insurance policies from rental car agencies are often very expensive and sometimes you might already have the coverage from other sources like your comprehensive car insurance policy of your credit card. Always check first so you don’t end up paying more than you should.
Follow Ryan Parker in his quest to demystify the world of car insurance for everyone. Not everyone thinks he is packing a full deck but he certainly provides information that is very useful. Have a look at what he has to say about rental car insurance.
