Lots of people buy rental car insurance because they don’t know much about it and figure that they are better safe than sorry. However, in most cases, it’s simply an add-on that turns a cheap rental car into an expensive one. Chances are you’re wasting valuable money on that rental car insurance policy!
Making things worse, the salesman at the rental counter will tell you how you shouldn’t even think of leaving the parking lot without buying their rental insurance. You’ll have to make a split-second decision on whether or not to take it. If you want to make sure that your decision is a well-researched one, you’ll need to know these 3 things:
1. Your Personal Car Insurance is Usually Enough.
The car insurance premiums that you pay every month don’t just cover that car in your garage; they also cover most rental cars that you drive around in, too. In most cases, if your rental car is damaged or stolen, your personal auto policy will cover the costs – meaning that buying rental car insurance is like buying a duplicate. And, the personal injury protection portion of your auto insurance policy will cover any medical or ambulance bills that you rack up in a crash. Read your personal auto insurance policy before you head to the rental counter. It will tell you whether or not you’re covered when you go out and rent a car. If you’re heading out of the country or renting a non-traditional vehicle (like a box truck), your personal policy will likely not cover you. But, just for run-of-the-mill rental cars, you should be covered. And, remember, you can always call your insurance agent if you have any questions.
2. Your Credit Card Might Cover it
Even if your personal auto policy doesn’t cover your rental car, buying insurance still may not be necessary. That’s because some credit cards come with collision and theft benefits.
Again, do your homework long before you head to the rental car counter. In many cases, credit card coverage is only secondary to personal or rental car insurance. And, some credit cards require you to notify them of your rental plans 45 days in advance for the coverage to be valid. Make sure you know exactly what your credit card company will and won’t cover before you turn down any rental car insurance.
3. For Some Companies, Buying Rental Car Insurance is Mandatory
In some cases, the rental car company doesn’t give you a choice on whether or not to opt for their rental car insurance; instead, they make you buy it. As a general rule, you should steer clear of any company that does this, because it’s usually a waste of money.
So, how do you know if you’re being required to buy rental car insurance?
You will see something in your rental agreement about CDW or LDW fees and charges.
CDW stands for “Collision Damage Waiver”, and LDW stands for “Loss Damage Waiver”. Both will release you from paying any damages that occur while you have the rental car – as long as you don’t violate any of the terms of your rental agreement.
It sounds like it’s designed to keep you safe. However, if your personal auto insurance or credit card company is already covering you, it’s nothing more than duplicate coverage. And, on top of that, it is expensive duplicate coverage! Usually, getting CDW or LDW rental car insurance will cost you about $10 per day.