What You Need To Know About Rental Car Insurance

Every time you find yourself at the car rental counter, you're likely faced with the familiar question, “Do you want to add on the car rental insurance?”. The cost of this additional coverage can be daunting, especially when charged per day. According to recent statistics, the average daily rate for rental car insurance can add up to a surprising amount, making it imperative for travelers to understand their options before hitting the road. In fact, the overall amount to rent a car has gone up 48% since 2019.

Understanding the Basics

Rental car insurance comes in various forms, and it's crucial to grasp the fundamentals before making a decision. From personal auto insurance to credit card coverage and additional options like Collision Damage Waiver (CDW) and Loss Damage Waiver (LDW), travelers need to be well informed to avoid unnecessary expenses and ensure they have adequate protection. 

Ensuring you have proper insurance coverage in case of a car accident is extremely important. In a worse case scenario, if you happen to get into an accident in a different state and sustain serious injuries that insurance doesn’t cover, contacting a personal injury attorney may be an option. For example, if you were injured in Connecticut, you could contact a Wallingford personal injury attorney. Most attorneys offer a free consultation where they could look at the situation and explain an action plan of how to move forward.

Coverage You Might Already Have:

Personal Auto Insurance

Your existing car insurance may already be extended to cover rental cars. However, this coverage can be limited. Take a look and delve into the specifics of your policy to understand how your collision, comprehensive, and liability coverage apply to rental cars. If it all seems a little too daunting and you aren't sure what to make of the jargon used, give your car insurance company a call. An agent should be able to clarify any questions you have. 

Credit Card Coverage

There are credit cards that will have car rental “insurance” coverage if you pay for the rental with that card. This includes secondary and primary coverage. It is important to note that. first, the cardholder will have to be listed as the primary driver on the car rental agreemen. Second, the credit card coverage may replace the CDW, but it will not replace liability if there is an accident with another car. If you cause an accident that damages another car or injured its passengers, you would be liably for their injuries. 

Secondary Insurance

Most credit cards offer secondary insurance. If you use a credit card with this insurance and think it will cover anything that happens in an accident not so fast. It will only cover the amount not covered by any other insurance policies. This means, that any other insurance plans you have (like car insurance) will have to pay first and then the credit card company will only pay the difference of what’s left. This will entail you contacting your own car insurance company first and file a claim. This can be a time-consuming process and lead to an increase in monthly premium increase and paying a deductible cost for the damages.

Primary Insurance

Primary insurance on the other hand will pay first regardless of any other car insurance policies you may have. To start the process of submitting a claim, you simply have to call the number on the back of your card. Your auto insurance will not be contacted and the credit card will cover (depending on its coverage) claims for damage, theft, towing and loss of use up to its coverage limits. 

Additional Coverage Options

Collision Damage Waiver (CDW) and Loss Damage Waiver (LDW):
A collision damage waiver, also sometimes known as a loss damage waiver, is an option car rental companies offer that will coverage damage to the car itself. If you choose not to select this option, you will have to sign a waiver at the counter stating you’ve elected to opt-out of this service. If you do decide you’d like to purchase a CDW to help protect against fianncial responsibility for damage to the rent car, read the agreement carefully to see what it all covers. Some agreements may including an accident, vandalization, theft, fire, and/or weather-related damage. Other agreements may only include a few of these options.

A CDW will not cover damage to other cars, bodily injury to you or your passengers, bodily injury to other people, or theft or damage of your personal items in a vehicle. Sometimes your homeowners policy may cover theft or your personal auto policy or health insurance may cover bodily injuries.

If another driver that was not listed as an additional driver on the agreement caused an accident, the CDW agreement is no longer applicable. 

Supplemental Liability Insurance (SLI):

At the car rental counter you may also be offered supplemental liability insurance. SLI is an additional option that insures you for injuries to other drivers and their vehicles.  This can be known as several different names including:

• Accident liability insurance 
• Supplemental liability protection 
• Liability insurance supplement
• Renter liability protection

Ask the car insurance company the amout that SLI covers as this amount may be minimal.

Personal Effects Coverage:
This optional coverage will cover any theft of damage to your items that may happen. It’s great for peace of mind. However, if you currently have homeowners or renters insurance, give them a call to see if your existing policy will cover your belongings on trips. 

While your head may or may not be spinning now with all of these different options, the biggest takeaway is to be aware of what your existing policies offer. Then, when you are signing up for additional coverages at the car rental counter you’ll know exactly where you do or don’t need a little bit of extra coverage.