If you have ever rented a vehicle, you know you can not drive off the lot without being pitched an offer for rental car insurance. Also known as a collision damage waiver, you may even feel pressured into purchasing this coverage “just in case.” This is especially true if you are misinformed about your coverage needs or unaware of the alternative rental car damage protection available to you. Before you pay for another collision damage waiver, make sure you know these 3 things first.
1. Collision and comprehensive insurance may cover your rental car.
If your personal car insurance includes coverage for collision and comprehensive damages, it will probably cover your rental car, too. Though rules and policies vary by state and insurer, you may be able to file a claim for rental car damages. Of course, filing a claim could affect your future insurance premiums, and it will probably cost you several hundred dollars in deductible expenses, but the majority of your liability to the rental company could be covered by your insurer.
2. Your credit card company might pay for your deductible and more.
Credit card companies offer a myriad of benefits to their members. Many of them feature credit cards with built-in rental car damage protection. Though the details and limitations of this coverage will vary depending on the card you own, it is possible that certain losses might be covered under your credit card benefits.
We recommend contacting your credit card company to find out if your card offers this benefit and to see how you can take advantage of it. You may be required to decline the collision damage waiver and pay for your rental car with the credit card at the time of reservation. A select few credit cards currently offer primary rental coverage, meaning you are not required to file a claim on your personal auto insurance first. However, the majority of cards offer secondary coverage that will pick up where your personal insurance leaves off.
3. Collision damage waivers contain exclusions.
If you decide to purchase a collision damage waiver, read all of the fine print first. Since these waivers are not formal insurance policies, they leave a lot of discretion in the hands of the rental company. For example, some rental companies place clauses in their collision damage waivers that void coverage for damages that occur when you are driving ‘carelessly’ or ‘recklessly.’ If the waiver does not define these two terms, it is possible you could be accused of careless driving if you made any driving error that led to an accident.
What Should You Do?
Ultimately, your rental agreement states that you are responsible for all of the rental company’s losses that stem from damage to your rental vehicle. These include vehicle repair or replacement, loss of use, towing charges, and administrative fees. Because of this, we recommend purchasing the damage waiver offered by the rental car company. If you have questions about the extent of your personal coverage and any gaps that may leave you vulnerable when driving a rental car, contact your independ