Don’t be embarrassed if you’re not sure whether to get the rental car insurance or not.  I recently paid nearly $300.00 for a week long car rental while on vacation!  That’s why I decided to include the subject on this site.  Stop me if you’ve heard this one before:

Rental Company Agent: Hello unknowing customer!
You: Hi, I booked the standard vehicle online for three days for a total of $65.00.
Rental Company Agent: Yes, I have your reservation right here.  How do you intend to cover this vehicle?  Would you like our insurance coverage?
You: Sure, what’s the total for the three days?
Rental Company Agent: With full coverage, your three day total is $285.00.
You: Eek…

There are a few things you can do to make sure you don’t become another victim of the rental car company insurance scam.  To ensure you’re covered prior to your trip, call your independent agent or direct insurer, along with your credit card company.

Under the typical personal auto insurance policy (assuming you have high enough liability limits and physical damage coverage), additional insurance isn’t necessary.  But keep in mind that you’re still responsible for paying your deductible for physical damage claims in most cases.  Be sure to verify this information in writing before renting the car.  If your agent or insurer is unwilling to take the time to explain and prove this for you, find another one.

Even if you have full coverage, be sure to inquire about “loss of use” coverage.  This will protect you in the event you damage a rental car for which you may be covered, but the rental company still charges you the daily cost, or a potion thereof, for the time the car is not being rented.  Basically, if they can’t make money renting the car to another person as the result of your accident, you have to compensate them for the money they’re losing.

Next, call the credit card issuer you intend to pay the rental with.  Many credit card companies offer insurance coverage solely for using their card.  I suggest you do this well in advance of your trip.  I have exercised this option in the past, only to be stuck on the phone with a customer service representative who had no idea what I was talking about.  Be sure to speak to someone who is qualified to discuss the details of the coverage and get it in writing.  Stating you thought you were insured does not stand up in court.  Make sure to ask if you have loss of use coverage and if they pay all physical damage costs or just your deductible for physical damage.

But I Don’t Own a Car

If you don’t own a car or aren’t insured for liability under your own personal auto policy, you should elect to purchase their liability coverage.  When it comes to physical damage of the rented vehicle, the company will offer you a Loss Damage Waiver (LDW), or a Collision Damage Waiver (CDW).  Please note, these options are not actually insurance, rather waivers for liability of damages.

For our purposes, they cover you in the same manner you would be covered under your own policy.  You should expect to pay anywhere from $6.00 to $25.00 per day for the waivers.  While this may seem like a rip off, remember you will most likely be driving in an area you are unfamiliar with or in weather conditions you may not be accustomed to driving in, so it is a good idea to pay the additional fee’s and ensure your vacation or trip doesn’t end on a sour note.

In addition, your personal items are most likely not covered when you purchase coverage from a rental company, unless otherwise expressed in your contract.  Typically, these items are covered by a homeowner’s policy.  If you do not own a home and carry this insurance, be sure to purchase this additional coverage, which should be offered as well.

Rental car insurance doesn’t have to ruin your trip.  Simply make the necessary phone calls, speak to qualified people, ask for the information in writing, and make sure you are completely comfortable and fully understand your coverage.  You pay a lot of money for the coverage (or damage if you are not covered), so do not feel like you are putting anybody “out” by being specific.  People who aren’t concerned with assisting you up front certainly won’t help you after an accident has occurred if it turns out you are not covered.