We have all dealt with the polite but hard sell car rental agent, with all the add-ons they thrust upon us when picking up a car. You begin to wonder if all those insurance options are really worth the up to 50-100% they can add to the rental cost. Hopefully we will dispel some of the confusion for you.
First, we always recommended that you purchase the coverage provided by the rental car company. Also, state laws vary and if you’re outside the United States, simply buy the rental company insurance. It’s cheaper than going to jail!
The types of insurance coverages offered may use slightly different names but usually they boil down to the Loss Damage Waiver, Liability Insurance Supplement, and Personal Effects Coverage.
- The Loss Damage Waiver absolves you from financial responsibility for the car itself. Whether it’s stolen, damaged, destroyed or certain other causes. Just hand the rental agent the keys and come home.
- The Liability Insurance Supplement provides you with coverage for any damage or injury you cause to others or their property with your rental car. Rental car companies are required to carry liability insurance but most contracts specify the renter is also responsible, including any claim by a third party, such as the injured parties spouse or relatives.
- Personal Effects Coverage protects you against loss of personal property in case something is stolen from your rental car. If you have no homeowners or renters insurance this is a must.
Having now discussed the coverages provided by the rental car company, we will tell you that your auto insurance policy will provide you with the same coverage for the rental car as you have on your personal car (including deductibles). If you have, liability and physical damage on your policy, it will be provided to you for the rental car.
However, you are still on the hook for the “loss of use” of the rental car or the time the rental car company cannot use the vehicle because it needs to be repaired.