Vacations can be hectic and often expensive enough without having to worry about extra expenses, like the insurance you think you may have to purchase if you are renting a car. Quite often, even though the car rental agent may be pushing the insurance at you like your suffering from kidney failure and to forego it would be like rejecting dialysis, you may not need it.
It pays to know what type of insurance you have on your own vehicles when you are away on a trip. It also helps to know that part of the reason that the rental car companies push so hard to have you add their insurance, otherwise known as either a collision damage waiver (CDW) or loss damage waiver (LDW), is that the rental companies make a nice little extra income on it. The cost of the coverage for them is marked up approximately 1000%.
This is not to say that you should just decline this coverage out-of-hand. If you are only carrying liability insurance on your personal vehicle, you would be wise to purchase the insurance. The cost to have a car repaired that is damaged when you are renting it is extremely costly as you will have to use the repair company of their choosing. If it is say $15 a day to make sure that you do not have to pay for the repairs if you damage the car, it is stolen, or vandalized this is a very small price to pay for peace of mind.
On the other hand, if you have full coverage on your personal vehicle, comprehensive and collision insurance, you will not need to purchase the CDW or LDW rider for your rental vehicle. Your personal insurance covers you and your passengers in the rental car that you are driving. The great thing is that if you designate drivers on the rental contract, they too will be covered by your personal policy.
There is one caveat to this, if you happen to be traveling on business, you may or may not be covered. You will want to check with your insurance company to verify if your policy covers business travel prior to waiving the waiver. Often, this is not covered because your company would ultimately be the liable party, and therefore their insurance would need to cover any expenses that you incurred while away doing work for them.
Another aspect to look into when renting cars and determining insurance coverage is the credit card you use to rent it with. If you are using a “premium” credit card, like a gold Visa, Mastercard, American Express, etc… to rent your vehicle you are automatically covered for damages and loss, as long as you waived the CDW or LDW. There is another stipulation here however, credit card companies will only pay AFTER your insurance company, and they REIMBURSE you for monies you had to expend. The other thing is that there are time limits to file the claims so make sure that you are aware of them so that you do not negate your ability to file.
Renting a vehicle can make traveling much easier, and knowing your insurance options will help you enjoy your time away all the more.