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Rental
Car Insurance Tips for Vacationers
Properly
insuring a rental car can be tricky. Unfortunately,
many vacationers don't even think about car rental insurance
until they get to the rental car counter, which can
result in costly mistakes, according to the Insurance
Information Institute (I.I.I.).
"The
decision to buy rental car insurance or any other insurance
product should not be a snap decision," said Jeanne
M. Salvatore, I.I.I.'s consumer spokesperson. "Unfortunately,
with long lines at rental counters during the summer
months, some people panic when asked if they would like
to buy or decline car rental insurance. Faced with a
number of choices, some renters either purchase all
of the coverage or they decline the insurance without
knowing if they are covered by other policies. This
can result in either wasting money by purchasing unnecessary
coverage or it can leave a consumer dangerously underinsured."
Before
renting a car, the I.I.I. suggests that you make two
phone calls — one to your insurance agent or company
representative and another to the credit card company
you will be using to pay for the rental car. Here's
how they can help:
Insurance Company
Find out how much coverage you currently have on your
own car. In most cases, whatever coverage and deductibles
you have on your own car would apply when you rent a
car, providing you are using the car for pleasure and
not for business. Remember, if you have dropped either
comprehensive or collision on your own car as a way
to reduce costs, you will not be covered if your rental
car is stolen or damaged in a collision. In this case,
you may want to purchase the collision damage waiver
from the car rental company.
Credit Card Company
Insurance benefits offered by credit card companies
differ by both the company and/or the bank that issues
the card, as well as by the level of credit card used.
For instance, a platinum card may offer more insurance
coverage than a gold card. To know exactly what type
of insurance you have, call the 800 number on the back
of the card you will be using to rent the car. If you
are depending on a credit card for insurance protection,
ask the card company or bank to send you their coverage
information in writing. In most instances, credit card
benefits are secondary to either your personal insurance
protection or the insurance offered by the rental car
company. If you have more than one credit card, consider
calling each one to see which offers the best insurance
protection and travel assistance services.
At
the Rental Car Counter
Since insurance is state regulated, the cost and coverage
will vary from state to state. Consumers, however, can
generally choose from the following coverages:
Collision Damage Waiver
Sometimes referred to as a Loss Damage Waiver, they
are not technically insurance products. They do, however,
relieve or "waive" a renter of financial responsibility
if their rental car is damaged or stolen. In most cases,
waivers also provide coverage for "loss of use." This is in the event the rental car company charges
the renter for the time a damaged car can't be rented
because it is being fixed.
Waivers,
however, may become void if the accident was caused
by speeding, driving on unpaved roads or driving while
intoxicated. If you have comprehensive and collision
on your own car, you may not need this additional protection,
which generally costs between $9 and $19 a day.
Liability Insurance
Provides liability protection for up to one million
dollars. Rental companies are required by law to provide
the state required amount of liability insurance. Generally,
these amounts are low and do not provide much protection.
If you are adequately insured on your own car, you may
consider forgoing this additional liability protection.
If you feel more comfortable with this supplemental
insurance, it will cost between $7 and $14 a day. However,
an umbrella liability policy may be more cost-effective.
This provides an additional million dollars worth of
liability protection for accidents while driving your
own car or one that you rent. It generally costs between
$200 to $300 annually.
Personal Accident Insurance
Offers coverage to you and your passengers for medical
and ambulance bills for injuries caused in a car crash.
If you have adequate health insurance or are covered
by personal injury protection under your own car insurance,
you may not need this additional insurance. It generally
costs about $1-5 a day.
Personal Effects Coverage
Provides insurance for the theft of items in your car.
If you have a home or renters insurance policy, you
are generally covered for theft of your belongings away
from home, minus the deductible. Generally, this coverage
costs between $1-4 a day. If you frequently travel
with expensive items such as jewelry or sports equipment,
it may be more cost-effective to purchase a floater
under your home or renters insurance policies. This
way, these items are fully protected with insurance
at home and on vacation.
If
you don't own a car and are a frequent car renter, you
may consider purchasing a non-owner liability policy. This not only provides liability protection when you
rent a car, but if you borrow someone else's car.
If
you are planning to rent a car outside the United States, find
out what the insurance requirements are in the country
you will be visiting and purchase the necessary coverage.
Talk to your travel agent and insurance agent before
you get there and bring a proof of insurance coverage
in the United States, if appropriate.
States
have minimum age requirements to rent a car and some
rental car companies now investigate your driving record
and/or credit history. Check with the rental car company
to find out its policy before picking up the car.
The
I.I.I. is a non-profit, communications organization
supported by the property/casualty insurance business.
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