Rental Car Insurance
We'll Tell You The Truth About Rental Car Insurance
What you'll discover in this report:
- If you really do need Rental Car Insurance
- The real costs of Rental Car Insurance
- What you should do if you don't have collision coverage
- What you need to know if you damage another vehicle with the rental car
Straight Answers To The Nagging Questions About Rental Car Insurance
You're off the plane and ready to start your adventures. You're the next in line at the rental car counter. And it's finally your turn.
Then, the question: "Would you like to purchase the insurance for your rental car?" What do you do?
Possibly not, but how can you be sure? Be prepared to answer this question before you leave on vacation.
Why shouldn't you buy insurance from a rental car company? The person behind the counter is (usually) not a licensed insurance professional. He or she is not conversant with insurance laws and won't know whether or not your personal auto policy covers you when you rent a vehicle (in most circumstances, it does).
Some rental car company personnel may say you're required to buy the coverage (not true) or that you'll be personally liable for any damage to the car while you're renting it (most likely, not true).
This Coverage Is Additional Expense On Your Vacation
* Fact. You could be making a costly mistake if you need the rental car coverage and don't buy it. You're also making a costly mistake if you buy it when you don't need it.
Rental Car Insurance is incredibly expensive. On a daily basis, which is how it is sold, the rental car coverage can cost 10 to 20 times more than your personal auto policy. If you buy all the coverages offered by the rental car companies, you could easily double the daily cost of your rental vehicle.
So who needs to buy the rental car coverage? Well, here's who doesn't. If you have insurance for your own cars, including collision and comprehensive coverages, you don't need the Rental Car Insurance - provided you're not renting the vehicle for business purposes.
If you're on vacation, no problem. Just say no. If you're on vacation but planning to do some business, you're probably OK. But you should talk to your broker if you mix business and pleasure on the trips where you plan to rent a car.
* Note. One thing to keep in mind: Your collision and comprehensive coverages on your personal auto policy have deductibles (the amount you must pay before the insurance kicks in). Those deductibles apply to damage to rental cars as well.
What If I Don't Carry Collision Coverage?
So what happens if you don't carry collision and comprehensive coverages on your own cars? Many people don't, particularly if they have vehicles that are at least 10 years old.
* Note. If you don't have collision and comprehensive, your personal auto policy won't cover damages to the rental car if it is in an accident, stolen, vandalized, collides with an animal or burns.
So what should you do?
You can risk it, not buy the rental car company's collision damage waiver (CDW) or loss damage waiver (LDW), and hope you don't have an accident or encounter anything that damages the vehicle. You'll save money, but it might not do much for your peace of mind, particularly if you're driving in a strange city or area.
* Tip. If you're averse to risk, you probably should buy the CDW or LDW. Some rental car companies offer some options with their CDWs or LDWs. Some come with deductibles, like regular collision and comprehensive coverages, while others provide first-dollar coverage.
First-dollar coverage comes at a higher price and some options limit the coverage. In other words, after a certain amount of damage to the vehicle, say $5,000, you would be responsible for paying the remaining damage costs.
What If I Damage Another Vehicle In The Rental Car?
What about damage or injuries you cause to other vehicles and people while you're driving the rental car? If your personal auto policy includes liability insurance, your policy will pay for any damage or injuries you cause to other cars or people - up to the limits of the policy, of course.
* Note. If you're comfortable with the amount of liability coverage you have for your own cars, you don't need to buy additional liability insurance for vehicles you rent.
If you don't have liability coverage (if you don't have a car, you're probably not going to carry Auto Insurance) you actually may not need to buy the rental car company's liability policy, either.
Ontario rental car companies do provide liability insurance. Most rental companies have a rather low coverage amount. It's probably not enough, especially if you cause a serious accident.
Make sure you ask what the limit is, especially if you don't have your own Auto Insurance.
The minimum amount for third-party liability insurance for all vehicles in Ontario, including rental cars, is $200,000 though many rental agencies carry at least $1 million.
* Tip. If you have any assets to protect, you should strongly consider purchasing the rental car company's liability coverage, which can cost up to $30 a day depending on the level of coverage you choose. Higher liability limits mean higher daily costs.
If you have any concerns about whether you need to buy the coverages offered by rental car companies, talk to your Secure Insurance Solutions broker. Rental Car Insurance can double your daily rate. That's a lot to pay for something you don't need.