Four Things to Know About Insurance Before Renting a Car
Have you ever had an agent at a rental car company ask if you want to purchase additional or optional insurance while you’re standing at the counter juggling your luggage and other belongings? You might swiftly say “no” but then wonder if your personal car insurance policy would cover you in the event of an accident or theft.
Understanding the intricacies of how rental car insurance policies work could help you decide whether you need that coverage or are OK to pass on it.
- Loss damage waivers
Many insurance companies don’t offer a Loss Damage Waiver (LDW), which is like a “get-out-of-jail-free” card that absolves a driver of liability in the event of theft or damage to a rental vehicle. If you purchase this coverage from the rental car company, the extra charge is tacked on to the daily rental price and typically ranges from 25 to 40 percent of the overall cost.
- Stand-alone rental car coverage
If you reserve and pay for a rental car with a credit card that offers rental insurance benefits, you may receive primary or secondary insurance coverage. Primary coverage means you don’t have go through your insurance company to file a claim because the credit card will likely cover some, or all of the cost of damages or theft. Secondary coverage, on the other hand, means you’ll have to file a claim with your insurance company first, then the credit card will cover any costs your insurance doesn’t. Each credit card offers different coverages and limits, so make sure to read the terms and agreements before visiting the rental car office.
- Collision and comprehensive coverage
Typically, personal auto insurance collision and comprehensive coverage extends to rental vehicles if it’s part of your personal auto insurance package. Collision insurance pays for damage to the rental car, regardless of fault. Comprehensive insurance protects against non-collision damage such as theft, vandalism, fires, floods and hailstorms.You will have to pay your deductible, which might range from $250 to $1,000, so check your policy or contact your agent for the specific amount.
- Liability coverage
Liability coverage from your auto policy usually extends to rental vehicles. Supplemental liability insurance is available from rental companies, but you should check your existing auto policy to see if it already has adequate coverage.While covered drivers can usually opt out of purchasing added coverage from a rental car company, it’s important to consider the claims process and any potential impact on your insurance premium. Also, if you’re taking advantage of your credit card’s rental car insurance benefits, you’ll be working with their claims process.
Contact your auto insurance provider and credit card company to understand your options, their claims process and how protection extends to rental cars. If you’re still unsure about purchasing rental car insurance coverage, talk to your Mercury Insurance agent.