IN: Do You Really Need Car Rental Insurance?

Dear Valued Customer,

In this issue of  “—————-” we focus on whether you really need car rental insurance.

We’ve all had to consider these questions when renting a car:

  • Should you pay for rent-a-car insurance?
  • Are you already covered by your existing car insurance policy?
  • If you use a specific credit card do you receive coverage automatically?

In order to be properly informed, we suggest you make two phone calls before renting a car. One to your insurance agent or company representative, and another to the credit card company you will be using to pay for the rental car. For more information, please read the articles below.

We appreciate your continued business and look forward to serving you.

Kind regards,

Theme 3: Do You Really Need Car Rental Insurance? ARTICLE 2


Article 2

Should You Pay for Rent-A-Car Insurance? You Might Already Be Covered.

With so many options at the car rental counter, it may be tempting to buy whatever insurance protection is available, but many travelers don’t realize they’re more than likely duplicating coverage they already have.

Not only does a driver’s insurance policy protect against theft or damages to a rental vehicle, but often so does a major credit card used to pay the rental fee.

The best thing to do is to call your insurance agent and credit card company in advance. Just because you’ve used a gold or platinum card in the past, don’t assume that it still offers the same protection plans — the cards’ insurance benefits can change. “More often, these prestigious cards are starting to change the advantages they offer to their cardholders, and often times the cardholders are unaware,” said Carolyn Gorman, vice president of the Insurance Information Institute in New York. “You could be driving uninsured and not even know it, until you get into a bad accident and have no insurance to cover you. It’s a dangerous, scary thing.”

If you’re not insured through a policy or credit card, the long list of available options can seem intimidating. “This is just a classic way for these companies to make more money,” said Greg Daugherty, an executive editor at Consumer Reports magazine.

Car rental agreements vary from company to company, but these are a few plans most state laws require them to offer. This is not technically an insurance product, but instead shifts liability for collision damage from the person renting the car to the car rental company. This also covers for “loss of use,” or time a damaged car can’t be rented because it is being repaired. Waivers, however, can become void if the accident was caused by driving illegally.

Liability insurance, which provides protection for up to $1 million, most drivers would already have this coverage under their own car insurance.

Personal accident insurance covers medical and ambulance bills for the driver and passengers in the event of an accident. Personal effects coverage is not always included in regular insurance plans. This protects against theft of items in the vehicle, such as laptops, golf clubs or cash. It may be more cost effective, however, to purchase a floating policy under home or renters insurance, so that valuable items are fully protected at home as well as on vacation.

For those who don’t own a car but are frequent car renters or borrowers, another option for avoiding repetitive insurance fees is non-owner liability policies. There are also limits or special insurance requirements for driving outside of the U.S.

The most important thing to do, said Gorman, is plan ahead.

“The worst is when you are standing at the counter, with a line behind you, and you feel pressured to buy it all because you don’t have a sense of what kind of coverage you need and what you don’t,” she said.

Am I Covered If I Use My Card?

It may be confusing, but you need to understand the “ins and outs” of car rental insurance, because sooner or later, you’ll need to rent a car and be faced with some confusing information.

This is the scene: the rental agent will ask you if you want to purchase insurance coverage. Then he’ll offer you different levels of insurance coverage, including a Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW). If you’re wondering what those two coverage options provide, they cover the rental vehicle in the event of accidental damage and theft.

Now comes the really confusing, but important part…do you need insurance for your rental car or not? If you don’t own your own car, and as a result, don’t have any personal auto insurance, the answer would be a resounding “yes.” You do not want to risk having an accident in a rental car and having to pick up the cost of the damages yourself. Now, if you’ve already got car insurance for your own car, will that apply to the rental? Even if it does, is it the same? Is it enough? On top of all that, the credit card companies do a good job of making it even more confusing. Some of them say that if you use their card to rent the car, you’ll be automatically covered. However, the same questions arise…covered for what, and is it enough?

Still confused? We’re not surprised. So here’s some information that will hopefully clear up some or all of that confusion and make it understandable.

If you have a personal auto insurance policy read it carefully or call your insurance agent to ask for coverage details. (It would help if you could do this before renting your car so you can make an informed decision). Many auto policies cover rentals with the same type and amount of coverage on your personal vehicle. Also ask about coverage for any administrative fees you may be responsible for, such as loss of use (rental income not earned on a car while it is in the repair shop).

If you’re wondering whether you need additional coverage, if your policy does not cover rentals, has a high deductible, or does not include collision coverage or sufficient comprehensive coverage, you may wish to purchase additional coverage from the rental company. Also, insurance is invaluable in foreign countries where you may be responsible for paying for the damage in full before you leave the country.

If you’re wondering if your credit card offers car rental insurance, carefully read the documentation that applies to your specific credit card and understand the extent of the coverage it provides. Depending on the level and type of coverage your credit card offers, you might want to consider supplementing this with some additional insurance from the car rental company.

If you’re renting a car in a foreign country check your auto insurance policy for possible exclusions or limitations on renting a car abroad. Also check for coverage that may be offered by your credit card company or auto club.  If you are not sufficiently covered, you may wish to purchase third-party travel insurance to cover your foreign rental, or the Loss Damage Waiver from the agency. You will still be liable for any costs resulting from vehicle damage that are not covered by the waiver.


© Copyright 2014 intouch Business, Inc. All rights reserved. Certain names and articles used with permission of owners. Trade names mentioned herein are owned by third parties.

If I’m Traveling in Europe What Kind of Car Insurance Do I Need?



Article 3

If I’m Traveling in Europe What Kind of Car Insurance Do I Need?

When you rent a car in Europe, it’s important to remember that liability insurance is normally included in the rate. Fire and theft insurance may also be included, but it’s always a good idea to ask.

What typically isn’t included is insurance against collision damage. To protect yourself against having to pay for car repairs (or even a brand-new car) in the event of an accident, you need a Collision Damage Waiver or “CDW.” This is available from two sources:

1. Rental agencies

The rental agent will offer you a Collision Damage Waiver when you pick up your car. In a few countries, such as Italy, you may be required to take the CDW. The cost isn’t cheap, but buying it from the rental-car agency is simple and offers peace of mind. You may also want to inquire about theft insurance, (LDW), which is usually mandatory with Italian car rentals but is optional in most countries.

2. Credit-card companies

Some credit-card companies provide free collision insurance for rentals charged on their Gold or Platinum cards. Unfortunately, the coverage isn’t always as good as it seems, and many card issuers no longer protect overseas travelers or limit their protection to cheaper cars.

To make matters worse, you may be required to authorize a deposit on your credit card up to the replacement cost of the vehicle, which isn’t very practical if the car’s value is more than your credit-card limit. If you get into an accident, you’ll normally have to settle up with the rental firm, then seek reimbursement from the credit-card company after you get home.

It is also possible to avoid the need for extra insurance. If you live outside the EU and are driving for at least 17 days, consider a short-term lease (such as a Peugeot Open Europe “Buy Back” lease or a Renault Eurodrive lease) instead of a traditional car rental. You’ll get a new, factory-fresh car that’s fully insured at no extra cost. As a bonus, leases are available to drivers who may be too young or too old for a standard car rental.


© Copyright 2014 intouch Business, Inc. All rights reserved. Certain names and articles used with permission of owners. Trade names mentioned herein are owned by third parties.