Know Your Rental Car Insurance Options
Most travelers who rent vehicles never take the time to read the fine print about insurance options. Needed coverage is often missed or forgotten, or extra or duplicate coverage purchased. Here’s a quick reminder of the usual options for rental vehicle insurance and some advice about what to check to make your decision.
Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)
If a rental car is damaged, the renter may be responsible for the first several hundred dollars of damage (the deductible) up to the full price of the car. By purchasing CDW (also known as Loss Damage Waiver or LDW), the renter is released from responsibility of any loss or damage to a vehicle up to the full value of the car. However, if the renter is in violation of the rental agreement, the waiver is void. Your personal auto insurance may already provide coverage for damage to rental cars and the purchase of CDW or LDW may not be necessary. Regulations for selling CDW/LDW vary from state to state.
CDW/LDW is usually an optional feature, however, a few companies require renters to purchase this waiver. Determine whether or not you need CDW/LDW before you arrive at the rental counter (check your own automobile insurance policy) and consider how much this CDW/LDW may increase the daily rental rate (CDW/LDW costs range from $8 – $12 per day). In some cases, you may find a special rate for a larger car that already includes CDW/LDW. In the long run, the larger car may be less expensive than the economy car with additional CDW/LDW costs.
Also, some credit card companies offer CDW/LDW insurance as a cardholder benefit. Be sure to read the fine print on these agreements (as well as on car rental agreements!) Usually, the protection afforded by credit card companies could be supplemental to your own insurance. Therefore, if you get in an accident, your own insurance will cover the repair costs up to its maximum and then the credit card company will cover the difference. As a result, your own car insurance rates may be affected.
Personal Accident Insurance (PAI)
Personal Accident Insurance provides accidental death and medical coverage for the renter and additional passengers during the time they are riding or driving with you. Check your personal car insurance policy to see if it covers car rentals. If your policy covers car rentals, you may not need PAI. This insurance is usually optional.
Additional Liability Insurance (ALI)
ALI is an optional insurance that protects the renter and other authorized operators against claims made by third parties for bodily injury/death and property damage caused by the use or operation of the rental vehicle. Check with your own auto insurance policy to determine whether additional excess coverage is already provided.
Personal Effects Coverage (PEC)
This coverage provides protection against loss or theft of personal belongings from the rental car. Once again, check your own auto insurance policy to determine whether your coverage includes rental cars.*
Use common sense and do not invite trouble. When parking your car, do not leave your valuables (camera, purse, etc.) unattended and in open view in your car or when on the beach. Rental cars at scenic lookouts and popular beach parks are quick and easy hits to those looking to snatch currency or credit cards or gear to flip into fast cash.
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