Why You Should Get the Insurance When Renting a Car
When renting a car on vacation or a business trip, you will be faced with the decision of whether to purchase the insurance coverage from the rental car company. In some cases, you may be duplicating coverages so you would be paying extra for something you don't need. However, there are situations when buying the rental company coverage makes sense.
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Types
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Rental car companies offer a variety of coverages. A loss damage waiver (LDW) and a collision damage waiver (CDW) are similar to comprehensive and collision damage coverage on a personal auto policy in that they pay for theft or damages to the rental vehicle. Additional Liability supplements provide extra liability on top of that offered by your own policy. Accidental coverage provides benefits if you are killed in an accident and personal effects coverage protects you if your possessions are stolen from the rental vehicle.
Significance
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If you don't have collision and comprehensive coverage on your own auto policy, it is strongly recommended that you purchase the CDW or LDW waiver that is offered by the rental company. Otherwise, you will be required to pay for damages to the rental vehicle out of your own pocket. If you have low liability limits, the Additional Liability coverage will provide additional protection in the event your are sued for a negligent act. Your auto policy also may not provide coverage if you are traveling overseas, so rental coverage can fill the void.
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Benefits
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If you purchase the rental car coverage, you may not have to use your own insurance coverage to pay for any damages, which can keep you in good standing with your insurance company. For example, if you live in Pennsylvania, an insurance carrier can cancel your auto policy if you have had two at-fault accidents in a three-year period. If you take the rental car coverage and have an at-fault accident with the rental car, the accident cannot be used against you by your insurance company.
Misconceptions
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Your own auto policy likely will not provide coverage for personal property inside the vehicle. Typically, this would fall under a homeowner insurance policy. If you do not own a home or do not have any type of personal contents coverage, you can purchase the rental company's contents coverage to protect you if your property is stolen.
Considerations
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As an alternative to purchasing the rental car coverage, you can also consider obtaining it from your credit card company. Some companies offer coverage for rental cars if you use their card for the rental. Take the time to compare rates and coverages when making your decision.
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References
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