Do
I need supplemental insurance coverage when renting a car?
Q. Whenever I rent a car, the customer service representative
offers several types of added insurance coverage. What exactly
are they offering, and given that I already have auto insurance,
do I need to pay for this additional coverage?
A. Insurance add-ons can top car-rental costs for consumers
who sign on for all the available options. So it's important
for renters to check on the provisions of coverage they already
have to figure out what, if any added insurance, they need.
Most rental car agencies offer four types of coverage.
The most common is a collision damage waiver, also known as
a loss damage waiver. Technically, this isn't insurance. Instead,
a renter pays $9 to $16 a day and, in exchange, the company's
waives its right to recover damages from the consumer if a vehicle
is damaged.
In addition, many rental agents offer personal accident
insurance, which provides death and medical coverage to the
driver and passengers in case of an accident. Many companies
offer it in conjunction with personal effects coverage, insuring
loss or damage to items in the car. Typically, the two together
add $4 to $5 a day to a renter's bill.
Finally, many rental agencies also offer supplemental
liability insurance, providing coverage if the renter kills
or injures someone or damages someone else's property. That
can add another $7 to $8 a day to charges.
All these types of coverage would be valuable in a vacuum.
But many drivers already carry such coverage and just don't
know it.
"It's up to the individual to make a determination whether
they need these coverages or whether they have these kinds of
protection," said Russell Bruno, executive director of the Association
for Car and Truck Rental Independents and Franchisees, an industry
group. "We can't make that decision for them."
Many credit cards include insurance on rental cars, but
consumers need to check on the terms of such coverage. Some
banks have been quietly eliminating such coverage from the benefits
they provide with cards, usually disclosed only in fine print
on card agreements. Many of the cards that do provide coverage
do so only on rentals in the U.S., a benefit that is useless
for a vacation overseas.
In addition, many auto insurance policies provide coverage
that extends to use of a rental vehicle, but the provisions
can vary. Some auto policies, for example, might cover medical
expense reimbursements, which are generally not covered in credit
card agreements.
Renters may also want to check with their employers, if
they're renting a car for business travel. Many employers negotiate
contract rates with rental agencies, and those agreements usually
include a collision damage waiver, Bruno said.
"Let the buyer beware," he said. "You should keep your
eyes open whenever you enter into a rental contract.
More information and tips on car rentals in Car Rental
