For many people, the process of renting a car is a fairly perfunctory one, but many will ask, “when renting a car do I really need extra insurance?” Most folks simply head to the kiosk or office when in need of temporary wheels, fill out some paperwork and throw down their credit card. Next thing they know they’ve got car keys in their hand. And while most rental car companies do a good job of handling the minutia inherent in the contract, the customer can still benefit from paying close attention to certain details, like insurance.
Many car rental customers are under the mistaken impression that comprehensive insurance automatically comes with any rental. And while it’s true that basic liability is often covered in standard contracts, the renter still assumes much risk upon receiving the vehicle. That is, unless they purchase added insurance. Since this is a notion that will cost the renter some extra cash, it benefits him or her to know exactly what they are getting into.
Types of Rental Coverage
Most rental car companies offer two basic types of rental insurance: collision damage waivers (CDW) and loss damage waivers (LDW). A loss damage waiver covers just that – any damage that isn’t the result of a collision. This includes things like theft, loss and vandalism. Conversely, CDW insurance should cover any problems related to collision. But certain companies offer additional protections with their waivers. For example, some LDW waivers may include damage resulting from hitting an animal in the policy.
Many rental car companies offer insurance add-ons that pick up where the liability limit leaves off. This can include such supplements as death and personal property insurance, which will pay in the event of loss of life as well as loss of personal property. But while it’s a nice notion that the renter’s beneficiaries will receive a payout if a death occurs behind the wheel, the need for this add-on is rarely necessary.
Avoid Double Coverage
Before renting a car, every properly insured vehicle owner should check his or her personal policy to see if it covers rentals. Many do, and oftentimes this results in renters paying double for insurance. Not only that, but credit card holders may just find that their card company offers comprehensive coverage on rental vehicles, which further eliminates the need to buy coverage.
Weigh the Pros and Cons
Added insurance is a big profit generator for rental companies. And as such, most employees will aggressively sell the customer on such policies. However, the customer should take into account all options and risks in order to ensure they don’t overpay. Maybe the customer won’t be using the vehicle extensively and thus won’t require additional liability protection.
By taking into account the above information and criteria, the average rental car customer should be able to gauge whether or not they need additional insurance. But a good rule of thumb is this: if the customer’s credit card doesn’t supplement renter insurance, and if the rental car company offers insurance for around $20 or less, then he or she should go ahead and purchase the policy.
Sara Wells is a travel writer who blogs.