When renting a car, it may be hard to decide whether you should buy the extra insurance or not. However, if you’re well-prepared you’ll know and which policies serve you well. Here’s what you should know.
Check Your Personal Auto Insurance Policy
Often times, the deductibles and limits on your personal auto insurance policy also apply to a rental when you drive it for personal use. However, if you use it for commercial or business purposes, your policy probably won’t apply.
Discuss your policy with your agent so you know precisely whether coverage extends to your rental and the limits it provides if it does. Check if you’re covered if you’re driving abroad, too. Often times, your personal car insurance won’t cover you internationally.
Check Credit Card Insurance Coverage
If you’re planning to pay with a credit card, it may provide additional insurance coverage. Call them and ask and whether it’s primary or secondary coverage. If it is secondary, you must involve your personal auto insurance company when you file a claim and that could increase your premiums.
Understand Your Insurance Options
When your auto insurance policy and credit card do not protect you well, you may benefit from rental car insurance. Most rental agencies offer the following options with varying costs:
Loss-Damage Waiver or Collision Damage Waiver
A loss damage waiver relieves you of financial responsibility for damage or theft of the rental car. It usually covers others expenses such as loss-of-use fees which compensate the rental company for what they would make had the rental been available. This coverage usually includes administrative and towing fees too.
Liability Coverage
To comply with New Jersey’s car insurance laws, you must have either a basic or standard car insurance policy to protect you from potential lawsuits. However, state minimums do not provide sufficient coverage.
Personal Accident Insurance
Personal Accident Insurance provides accidental death benefits and emergency medical expense benefits to the driver and passengers in the car.
Personal Effects Coverage
Personal Effects Protection insures the personal belongings of the driver and usually family members traveling with them up to a specified limit.
When To Say No
Renters with good auto insurance, homeowners insurance, and health insurance may not need these coverages. A decent auto insurance policy with ample liability coverage often negates the need for the rental car liability option. Your health plan may already cover accident-related injuries and your homeowners insurance policy may cover your personal belongings while off-premise. However, you’ll need to confirm this with your agent, before declining the additional coverage.
When To Say Yes
Since a loss damage waiver provides coverage beyond your personal and credit card coverage, it is something that we recommend to all of our clients. Otherwise, you may pay out-of-pocket for towing, loss-of-use, and administrative fees.
Obviously, if you don’t have auto insurance or your liability limits are low, you’ll probably need liability coverage. If you have auto insurance, but your policy does not include comprehensive and collision coverage you should consider coverage. You may also want to buy additional coverage if your personal auto insurance deductible includes a high deductible.
When currently protected by a commercial auto insurance policy and renting a passenger vehicle, light truck or van, you can usually include coverage for physical damage under your policy for a fee. However, you may need to buy a damage waiver for larger vehicles.
When personal auto insurance does not cover you when driving abroad, you will need additional coverage.
Probably the simplest way to obtain solid, unbiased advice is to call your local independent insurance agent. Tell them what you’re planning to do and have them review your insurance policies. They’ll spot insurance gaps and recommend ways to protect you well.
Why pay for additional coverage, if you’re already insured well? Talk to your agent before you rent a vehicle, save money, and travel worry-free.
