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Are Collision Damage Waivers for Rental Cars Worth It?
Whether you travel for business or vacation, everyone seems to get stumped by the rental car agent’s question, “Would you like the insurance?” Is it a scam? Does your credit card cover it? Here are the most frequently asked questions when it comes to Collision Damage Waivers or “the insurance” as it’s commonly referred to.
Q: I’m going on vacation and plan to rent a car. And I’ve been told my personal auto policy cover the rental vehicle. Is this true?
A: The majority of auto insurance companies will extend coverage from your personal auto policy to a rental vehicle. With most policies, coverage pays for actual repairs to the rental car, but you maintain responsibility for your policy deductible. In addition, the rental agreement often makes you responsible for additional items.
If you’re personal auto policy no longer includes comprehensive or collision coverage, the rental car will not be covered if it is stolen or damaged. In addition, if you rent a car outside of the United States coverage may not be extended.
Q: I’ve also heard that if I use my credit card to pay for the rental vehicle, the rental vehicle Will be covered. Is this true?
A: Many, but not all, Credit card companies offer rental insurance and will pay for damage to a rental car if you pay with that card, but the coverage will be secondary to your personal auto policy. In other words, your credit card company may pick up whatever your personal auto insurer does not pay, such as your deductible.
Q: If my personal auto policy covers my rental car, and my credit card covers my deductible, does this mean I am fully covered?
A: Well your personal auto policy and use of a credit card they provide sufficient coverage, They frequently fall short. Neither will cover costs and fees such as towing loss of use (the. The rental car is out of service for repairs) diminished value (wrecked and repaired cars are viewed as less valuable than undamaged factory originals) and administrative fees, all of which may be tacked on by the rental company in the event of an accident, and all of which you can be held liable for. The renter is always responsible for any loss or damage to a rental vehicle, regardless of who is at fault.
Q: In that case, be wise to purchase the extra “Insurance” offered by the rental car company?
A: Any collision damage waiver purchased from the rental car company essentially takes the place of your own collision and comprehensive insurance, letting you and your insurance company off the hook if you wreck the rental car, or if it is stolen or vandalized. In exchange for purchasing the collision damage waiver the rental car agrees to waive claims against you for damages in the event of an accident. But, Your collision damage waiver coverage could become void if the accident was caused because you were speeding, Driving under the entrance where the accident was the result of a reckless act or error on your part.
Q: Does this mean I should buy the collision damage waiver offered by the rental agency?
A: Before renting, familiarize yourself with your insurance options by:
- Contacting your independent insurance agent and finding out if you have enough coverage under your existing policy.
- Contacting your credit card company to find out if it offers rental car coverage, and any restrictions and limitations.
If the two coverage methods mentioned above seem inadequate for your needs, you may wish to consider the purchase of a collision damage waiver.
Q: How do I know what I should do?
A: Making such a personal decision about your options is yours and yours alone under the law. As your independent insurance agent, I can help explain these options. Our agencies job is to help provide you with information on these choices so you can make forms decisions.