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UPDATED: Mar 13, 2020
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According to Auto Rental News, a trade resource for companies involved in the auto rental industry, the car rental market was a $22.4 billion business in 2011. Those phenomenal revenue numbers include both rental fees and collected insurance premiums. If you’re considering purchasing a supplemental car insurance policy online for your next rental, there are some do’s and don’ts you need to be aware of.
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First, it’s important to understand you can buy supplemental coverage for rental cars from your own insurance carrier, online from a separate carrier, or at the front desk of your car rental agency. The last of the three options will be the most expensive in almost every case. Therefore, it pays to know what you need and how much you’re willing to spend before you leave home.
There’s no point in paying more than you have to simply because you didn’t do your homework ahead of time.
Do Check to See What Your Current Policy Offers
If you own a vehicle, you’ve already insured there’s a good chance that your policy covers you even when you’re driving a rental car. But you’ll need to check your policy documents or call your insurance agent to be sure. If you do have coverage as part of your own policy, the only other question is whether it is adequate to take care of any potential issues you might have while traveling.
For example, if your policy provides only the state mandated liability insurance, that’s all that will apply to your rental. Should you have an accident that injures someone else or damages their property, you will be covered up to the stated limits of your liability policy. But just as with your own vehicle, liability insurance does not cover the cost of repairing the rental vehicle or replacing your own property that might have been damaged.
If you have collision and comprehensive coverage, damage to the rental car is covered. If not, you may be covered under a program offered by one of your credit card companies; we’ll talk about that in just a minute. If you don’t have collision or comprehensive under one of these two options you should definitely purchase a supplemental policy from a licensed insurance provider or purchase the collision damage waiver (CDW) offered by the rental company.
Do Check Your Credit Card Agreements
According to the Insurance Information Network of California many credit card companies offer supplemental car rental coverage on their mid-range and high-end credit cards. It is offered as an incentive for new customers to apply for the card.
If any of your major credit cards are branded with names like Visa, MasterCard, American Express, or Discover, and they are not secured or prepaid cards, there’s a good likelihood the car rental perk is part of your program.
The credit card agreement that the company sent you should provide at least an overview of how their car insurance program works. If you need more details, you can always log on to the issuer’s website for complete details of all terms and conditions. If your credit card offers you car rental insurance, there’s no need for you to buy anything supplemental.
Do Consider Your Destination
If you’re traveling within the United States or Canada, your current auto insurance policy will cover you in case of an accident. That’s because both countries have reached a reciprocal agreement to honor one another’s policies when drivers cross the border. However, the same can’t be said for every destination.
For example, the U.S. State Department clearly states that Mexican car insurance is required for all vehicles traveling in that country, including rentals. Your own insurance will not be recognized or valid when driving south of the border. Furthermore, the Mexican government treats all auto accidents as both civil and criminal matters.
Should you have an accident without proper insurance you could face fines and jail time.
If you’ll be renting a car in Europe, South America, Asia, Africa, or anywhere else you should certainly check the regulations in whatever country you will be traveling. Some are friendly to U.S. auto policies while others are not. However, even if a foreign country does accept American auto insurance your carrier may not be willing to cover you in that location. In such a case, you’ll need to purchase extra car rental insurance before you leave home.
Do Not Accept the First Quote You Receive
Just like regular car insurance, car rental insurance will vary from one provider to the next. It’s important that you not contact only one company online and simply accept the first quote thrown at you. Insurance companies bank on the fact that travelers don’t want to take the time necessary to compare policies. But that’s a surefire way to pay a lot more for the supplemental coverage then you need to.
Take the time to get multiple quotes from multiple online sources. Then, compare the quotes and policies line by line just as you would your standard auto insurance. If you’re a savvy negotiator, you might be able to use the quotes to encourage a couple of the insurance companies to compete with one another. If not, at least you’ll be able to compare in order to make sure you’re getting the best policy at the lowest possible price.
While you’re comparing be sure to pay attention to the term length being offered. In other words, you might be purchasing insurance by the day, week, or month. The most expensive option will most likely be daily coverage, as it exposes the insurance company to the greatest risk. You’ll probably get a better rate purchasing insurance by the week.
Do Not Accept Incomplete Policy Documents
If your rental car is being covered under your own insurance policy or your credit card, you should already possess all of the documentation proving the coverage exists and outlining what it provides for. If you’re purchasing supplemental car rental insurance online, the carrier will have to provide you with documentation.
Under no circumstances should you ever take an insurance company’s word for your coverage or accept incomplete policy documents.
You are entitled to a complete copy of your policy, any declaration pages that might be warranted, and any other documentation required under the laws of the destination you’re visiting. In addition, you have the right to receive those documents in your own language.
So, using Mexican car insurance as an example, make sure all of the documentation provided to you is written in English unless you are fluent in Spanish. Having complete documentation is the only way to make sure you’re not being fleeced.
Do Not Pay for Your Policy with Cash or Check
Though cash and personal checks have been part of the American economic system since the country began, using them as a payment method for car rental insurance offers you little protection in the unlikely event you are scammed. By paying for the coverage with a credit card you have the right and the ability to contest the transaction if it turns out the insurance company you dealt with did not live up to its end of the bargain. It’s much easier to get a refund when you pay with a credit card.
Additionally, if it turns out that you have to cancel your trip a credit card payment gives you a bit more leverage in getting a refund. When the company does offer a refund they will be required to do so by crediting your card rather than sending you a check in the mail. This makes the refund process a lot quicker.
The Travel Insurance Option
One final option for car rental insurance is to include it as part of a general travel insurance policy. These types of policies are sometimes purchased to provide blanket coverage for travelers in case of:
- Canceled or missed flights
- Itinerary changes
- Accident or illness while traveling
- Lost baggage
- Accidental death and dismemberment
Travel insurance policies usually exist to protect individuals against any unforeseen loss resulting from circumstances beyond their control.
For example, Priceline.com offers travel insurance with several options that can be added. One of those options is car rental insurance. Consumers would agree to purchase this insurance at the time they book their trip with Priceline. But if you are planning your trip on your own, you could purchase the same type of coverage online through any company that offers travel insurance policies.
When all is said and done the most important thing about car rental insurance is knowing whether you absolutely need it and how much you’re willing to pay for it. Armed with the right knowledge you can make sure you’re fully covered before you hit the road.
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