The optional loss damage waiver is often expensive when you rent a car, but it limits or eliminates your financial liability for damage to the vehicle you rent. While the decision might have once been more cut and dry, choosing whether to purchase this additional insurance coverage has become “… significantly complicated by the fact that many rental companies are now charging their customers for diminished value and administrative charges when they crash a rental car,” a State Farm spokesperson said.
The first step when deciding whether you need the added insurance and expense is to find out what kind of coverage you already have through your auto insurance and credit cards.
Personal Auto Insurance Policy
Your regular auto insurance is your first line of liability protection in the event of a rental car crash according to the organization Consumer Reports. To protect a rental car, your personal auto insurance must also have collision coverage and/or comprehensive. If you have this coverage, find out if your policy:
- Extends coverage to rental cars
- Includes coverage for business travel
- Pays for rental-agency fees
- Pays the rental car’s “full value”
It’s always a good idea to speak with an insurance representative if you have any questions about the specific coverage you have. If your car insurance provides good protection but you still have gaps in coverage, your credit card might help fill in those gaps.
Credit Card Benefits
Rental protection benefits are provided by certain credit card companies. To find out which card in your wallet has the best coverage, contact your credit card companies. Ask each company:
- What type of benefits they offer
- Which vehicles are included/excluded
- What kinds of losses are not covered
Credit card coverage is typically secondary insurance, so an auto policy with collision and/or comprehensive will typically pay for the actual vehicle damage or theft, and the credit card company will cover some or all of the balance – subject to its own limits.
If You were Injured in a Rental Car Accident
Rental car accidents can get complicated quickly, especially when they involve injuries and other drivers. If you were involved in an accident with another motorist, the same rule of thumb applies when dealing with insurance companies: victims and their families should under no circumstances talk to the other driver’s insurance company without speaking with an attorney first.
For more tips to remember after an auto accident, download our free guide below.