Free Advice on Pros & Cons for Rental Car Waiver Insurance
Car insurance helps to protect drivers from the potential risks that are a part of getting behind the wheel. But driving a rental car may carry special risks or insurance options. Drivers may elect to sign a rental car insurance waiver, declining to purchase insurance through the rental car company.
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Function
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Rental car insurance covers drivers in the event that the rental car is lost, damaged or stolen. The coverage pays for the value of the car and applies whether or not the renter is at fault. Like a standard auto insurance policy, rental car insurance features a deductible, which is the amount the renter must pay before the insurance begins to contribute to the cost of damage. Renters can usually buy rental insurance from the car rental agency in advance when they make reservations or at the time of pick-up.
Risks
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Driving always represents some degree of risk, and rental cars may be especially risky. Drivers are less likely to be familiar with the vehicle, and also less likely to know the local roads, traffic laws and climate conditions. Renters may also not know about the safety of certain neighborhoods, which can increase the odds of theft if the renter parks in an unsafe place.
Signing a waiver to decline rental insurance puts the renter in a position of responsibility for covering damage or theft. However, buying rental car insurance is also a risk. Drivers who return their cars in good condition have paid for insurance they never used, and could have paid less for the car by signing an insurance waiver.
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Cost
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Rental car companies offer insurance to protect themselves and as a service to their customers. Renters who wouldn't be able to afford the replacement cost of the car can use insurance to limit their liability to the amount of the deductible. Renters whose plans include driving in bad weather, parking on public streets or driving in heavy traffic may find it worthwhile to buy insurance and forego a waiver, simply for peace of mind.
Signing a waiver, on the other hand, can be a way to manage the cost of a rental. For example, a traveler on a budget may find signing a waiver to be a necessary risk to keep the price of a trip affordable.
Redundancy
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Renters may already have rental car insurance and not realize it. Some major auto insurance providers extend coverage to cars their customers rent. The same is true of some credit cards, which cover the rented vehicles when cardholders pay with their credit card. For drivers with existing coverage, this may be more than enough coverage and eliminate the need for redundant coverage through the rental company.
However, drivers without credit card coverage who also lack collision coverage on an auto insurance policy, which pays for damage that the driver causes in an accident, may still want to buy insurance from the rental company despite overlapping coverage in other areas.
Frequency
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The frequency with which a particular driver rents cars can also have an effect on whether or not it makes financial sense to sign a rental car insurance waiver. Drivers who rent only occasionally may be better off buying insurance than those who rent frequently. This is because frequent renters will pay more for insurance in the long run, and could instead save the money and use it to pay for any incidental damage to a car. However, a one-time renter has less to save by signing a waiver and more to gain by letting the insurance pay for any damage.
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