Know What Coverage You Need Before You Rent
Already tired from the flight, you trudge to the car rental counter with your restless children, all of whom are eager to hurry up and get your family vacation started. The car rental agent slides a lengthy, legalese-filled contract in front of you, pitching all the additional insurance you "need" for your rental. Eager to appease the children yanking on your legs and the grumbling line of travelers building behind you, you agree, and suddenly, your bargain car rental rate has doubled in price. Want to avoid this common scenario? Brush up on car rental insurance basics so that you buy only what you need when you reach the counter.
Understanding the Four Types
Car rental companies offer four basic types of insurance, each covering a different potential cost. The collision damage waiver, sometimes called a loss damage waiver, shields you from any liability for costs if the car is damaged or stolen during your rental. Supplemental liability insurance covers costs from damages or injury you cause to other cars. Personal accident insurance covers costs of any injuries to you and your family if you have an accident. Personal effects coverage will compensate you for anything stolen from your car during the rental.
What You Don't Need
While all four insurance types sound like worthwhile investments on the surface, much of it could be redundant. Your liability insurance for your own vehicle, for example, will cover your liability while in a rental car as well, hence the "supplement" modifier on what the car rental company offers. Your family's health and life insurance policies, as well as your car insurance policies, will cover injuries to you and your family. Your homeowner's or renter's insurance, meanwhile, likely covers your personal items in the car. In addition, many credit card companies offer some level of car rental insurance as a benefit, so you might get extra protection just by paying with your credit card. Your best strategy is to call your insurers and credit card companies before your trip to see exactly what is covered and decide whether you are comfortable with the coverage and deductible. This also will arm you with information when the car rental agent tries to sell you all these insurance types at the counter.
What You Do Need
Even though it generally is the most expensive of the four insurance types, the loss/collision damage waiver is one you should consider buying. While your car or credit card insurance will cover the cost of damage to the car, they might not cover some of the additional charges the car rental company could charge. For example, the company might charge you a "loss of use" charge, covering its income lost while the damaged car is out of service. These easily could add up to thousands of dollars, which makes the $10 to $20 per day for the waiver a small price to pay, as it will cover all damage with no questions asked. If your family is on a tight budget, ask the car rental company what the waiver costs and check with third-party travel insurance companies about what sort of policies they offer. You might find a policy to cover your rental outside the car rental company at a better price.
There are times you might need insurance beyond the loss/collision damage waiver. If your family lives in a big city and you don't own a car, you will, of course, need liability insurance. If your family travels and rents cars frequently, consider buying a liability policy from an insurance company, which might save you money in the long run. Your own policies also might not cover all classes of cars, so check with your insurers to make sure you're covered if you plan to upgrade to a high-end SUV for the trip. Additionally, if you are renting outside the United States and Canada, be certain to check with your insurers for what is covered. Some policies do not extend internationally, and some countries might not let you leave until you've settled up your rental car bill.
Michael Baker has worked as a full-time journalist since 2002 and currently serves as editor for several travel-industry trade publications in New York. He previously was a business reporter for "The Press of Atlantic City" in New Jersey and "The [Brazoria County] Facts" in Freeport, Texas. Baker holds a Master of Science in journalism from Quinnipiac University in Hamden, Conn.