Do you ask yourself this question: Do I need to purchase extra insurance when I rent a car?
If you are planning on renting a vehicle, here’s a few tips on what your policy covers and doesn’t cover to help you in deciding how much coverage to buy from the rental company.
First, if you’re renting a truck larger than a pickup, your policy doesn’t pay for any damage to the truck. Your credit card won’t help either. Buy the extra coverage they offer, especially the part that covers damage to the truck. You may also want to buy their “Cargo” coverage to protect you against damage to the things you’re hauling. Most truck rental companies provide you with liability coverage that pays for damage and injury you might do to other people, but it doesn’t hurt to ask.
If you’re renting a vehicle outside the U.S. and Canada, your policy won’t cover you. You need to buy the optional coverage for damage to the rental car, generally called “Collision Damage Waiver” (CDW) or Loss Damage Waiver (LDW). Some foreign countries provide liability coverage automatically, but if it is optional, or if the amount provided in minimal, be sure you take it too.
When renting a car, pickup or van in the U.S. or Canada, your policy will pay for damage to a rental car if you carry Collision on at least one of your vehicles. You would still have to pay your deductible. Your credit card may also cover damage to the rental car. But, we still recommend you purchase the optional Collision or Loss Damage Waiver. Though your policy or your credit card may pay to repair the damage, rental companies are always coming up with some new thing to soak you for that isn’t covered by your insurance. For example, after one person’s auto policy paid $6,000 to repair a damaged rental car, the rental companies sued them for an additional $9,000 to cover the reduction in the car’s value. Rental companies also charge you for loss of rental income while the car is being repaired. Your policy doesn’t cover this, though your credit card might. Again, if you don’t carry Collision coverage on at least one of your vehicles, you won’t have any coverage for damaging a rented vehicle.
You may also want to purchase the optional Liability protection, especially if you don’t want to turn in a claim on your policy.
Rental car companies also sell “Personal Accident” coverage for medical expenses and death caused by a car accident. If you have adequate life and medical coverage this isn’t needed. Another option is “Personal Effects” coverage that pays for loss to your luggage and personal property in a car accident. It’s very limited and duplicates coverage provided by your Homeowners policy, don’t buy it.
Finally, if you’ll be renting a vehicle for business reasons, check with your employer to see if they will protect you. If not, we’ll need to know specifically what you’ll be renting since some vehicles, especially pickups and vans, aren’t covered when rented for business use.