Say you are out on a dream vacation. All you need to do to explore the place is rent a vehicle. You find a rental and get everything ready when the renting guy asks you the all-important question. Do you want auto insurance along with the rental? You could be just wasting good money in some cases or you could be on the right track by getting a rental but how do you decide? Here are some questions to ask yourself before getting rental car insurance.
Does your existing insurance cover for rentals?
This is important. It is likely that your present insurance already provides coverage for your rentals but this may not be always true. Therefore, always better to check before leaving for your vacation.
If your insurance includes liability then you are covered for any damage you may cause to other people or property. Collision insurance provides for all collisions concerned damages. This is not so simple for a rental car though, as there may be multiple loopholes in your insurance related to rentals. One, for example, and a big one at that, is the fact that you may not be covered if you are not the one driving the car. It is always better to clear this with the insurance before setting out.
Another problem could be that you are not covered for loss of use fees, that is, if the rental is in repairs because of the accident than the rental car obviously loses money because of unavailability of a vehicle. So watch out and make sure you are covered for loss of use and administrative fees.
One more thing you might want to check is the amount for which your rental is covered because if your rental is more expensive than your car than your insurance amount might not be enough for the rental. Say your insurance does not cover you for rentals. What other options do you have?
Is it possible that my credit card covers my rental?
This is unlikely, but possible. It does have a lot of obstacles though. The important point here too is being prepared before you leave. Read all credit card documents carefully. Some credit card companies provide just secondary insurance. This basically means they provide insurance only after your personal insurance has exhausted. Also, there are certain requirements if you are to be reimbursed. For instance, the credit card company should be notified within a certain period, failing which you will not be reimbursed.
Credit cards also generally cover only for collision and theft and hence, liability coverage is not provided. So if you hit a pedestrian or knock over a street lamp, you are on your own.
Typically, to be eligible for the credit card company insurance, the rental must be paid with the said credit card and the owner of the card should be the primary renter. Also, some credit card companies have an additional condition that the renter should refuse the collision waiver from the rental company.
So there you go, two alternatives to buying rental insurance but don't jump with joy as of yet, as you may still be in trouble if you are not careful about some things.
Are there any other things to watch out for with rental insurance?
Yes, there are many things actually. Some scenarios are specified below:
1. If you are on a business-related trip and taking a rental then your insurance may not cover you.
2. Some companies do not cover rentals in foreign countries. So, watch out if you are heading to Europe.
3. There is a limit on the time up to which the rental would be covered.
4. Some vehicles are not covered under certain insurance policies like vans and sports cars.
What if you are not covered under the above listed policies?
So, you are ready and all geared up to go on your very own road trip if you have jumped all the obstacles thus far. However, what will you do if your rental is not covered under your insurance and your credit card company, as well? Well, then unfortunately you have to get the insurance that the car rental company lays out for you, but do not do so without adequately studying the plans they provide. There are many insurance plans that rentals are liable to provide and some of them are as follows:
1. Collision Damage Waiver: Also known as Loss Damage Waiver, this simply means that if the car is damaged for any reason, you can walk off without any liability whatsoever.
2. Liability Insurance: Most provinces have a minimum compulsory quota for liability insurance that the rental has to provide. This may or may not be enough for you. So check up before getting this.
3. Personal Accident Insurance: This is not required, though if you have a suitable car or health insurance already.
So, what is the point in the end?
The point is to read up before you leave for your trip. Read your personal car insurance as well as the terms of all your credit card companies. If you have decided where to rent from, check out the policies they provide beforehand and prepare to have a marvelous trip.