Going on vacation? Plan to rent a car? Buy the insurance offered to you by the rental car company (also known as Loss Damage Waiver or Collision Damage Waiver).
When you rent a car, the liability insurance from your personal auto insurance will follow you. So if you cause an accident that leads to injuries or property damage to another person, your personal auto insurance is there for you.
However, your personal auto insurance won’t cover you if there is physical damage to the auto you rent. Even if you have full coverage (i.e. Comprehensive and Collision coverage) on your personal vehicle it will not extend to the leased auto.
Here are 4 things to consider when renting a car…
1 Valuation & Settlement
The value of the rental car at the time of a loss can be the decision of the rental car company.
Your personal auto insurance has the right to inspect and evaluate the damaged auto before it’s fixed. The rental car company can repair the auto immediately. Without asking for your input on where to get the auto repaired.
2 Loss of Rental Income
If there is damage to your rental car when you turn it in, more than likely you will be responsible for the time that vehicle is not in operation making money for the rental car company. So if your rental car is in the shop for three weeks, you will still pay the daily rental rate.
3 Loss of Value
After an accident to your rental car, if the vehicle is now worth less than before the loss, you may be paying for the loss in value. For instance, if the market value of the auto is worth $3,000 less after an accident, the rental car company can make you responsible for the indirect loss.
4 Miscellaneous Fees
Damage to your rental car may also mean being held responsible for fees for towing, storage, appraisal, etc.
If you choose not to buy the insurance from the car rental company, you’re setting yourself up for potential gaps in coverage.
- Top 10 Reasons to Purchase Rental Car Damage Waiver
- Does Your Personal Auto Insurance Cover Rental Cars? Answer: No!
Music credit: Joakim Karud | Song: Chill