Thursday, January 17, 2008

Review: Car Rental Tips - Insurance

Which insurance do I need when renting cars?

There are two main types of insurance you need when renting a car. Remember, if you own a car, chances are that you are covered when renting a car as well, check with your insurance provider.

  1. Collision – Loss and Damage Waiver (CDW - LDW):

This insurance will cover the rental car itself if it gets damaged or stolen. Most car rental companies have different levels of insurance. Depending on which one you get, you will have to pay a certain deductible, $500 or so. The most expensive level of insurance usually does not have any deductible.

Your credit card may already include this insurance. Call your card company to find out.

American Express credit cards automatically include this Insurance at no extra cost. Read the review on Amex car rental insurance.

  1. Liability Insurance:
    No credit cards cover this insurance! Don't find this out the hard way!

This insurance is if you damage another car or a person and they want money from you. This is the insurance that every car you own must have.

Some states, e.g. New York, the rental car company automatically gives you this insurance for no extra fee. They give you the minimum insurance, around $25,000. If the damage is more than that, then you may be sued for the rest of the money. To be on the safe side, (especially if you have assets to protect) you may want to purchase extra insurance which the car rental company offers - usually a $1,000,000 of coverage.

Other states, e.g. Florida, The rental car company does not include this insurance automatically. So if you want insurance, which you do, you need to purchase it from the car rental company. Rates vary at different companies and states e.g. In Florida: Enterprise $15 a day, Hertz $12 a day. for $1,000,000 of coverage.

If you rent often, and don't own a car, you should consider buying insurance from AAA which will cover your liability insurance whenever you rent a car.

There are two other types of insurance
insurances aren't as important as the main two.
Personal Accident Insurance: Insures people in the rental car - People should already have health insurance.
Personal Effects Coverage: Insures damaged / stolen items in the car. - It's nice to have this extra insurance, but I don't think it's usually worth it.

Note: Amex business credit cards only cover collision in the U.S.
Note: No Amex cards cover collision in Australia, Ireland, Israel, Italy, Jamaica and New Zealand. (Some MasterCards do)

Read the review on cheap car rentals.

Disclaimer: Although every effort was made to ensure accuracy, please check with your card/auto rental company.


Dovid said...

Thanks for clearing this up for me.

Post a Comment