It’s not uncommon for rental car agencies to offer you the opportunity to purchase additional auto coverages on your rental, but do you need them? TSG Financial, A Division of Risk Strategies has the answers.
Decide Before You Ride
The best time to make the decision about whether you will need extra rental car insurance is before you’re standing at the car rental counter. Read on to learn about car rental insurance considerations and what you need to know to make sure that you’re covered.
It’s not uncommon for rental car agencies to offer you the opportunity to purchase additional auto coverages, but do you need them? Here are some basic coverage options:
- Collision Damage Waiver (CDW), or Loss Damage Waiver (LDW), relieves you of financial responsibility if your rental car is damaged or stolen. If you have comprehensive and collision on your own car, you most likely don’t need to purchase CDW from the rental car agency.Additionally, your credit card company may include some collision and theft protection if the rental car is paid for with your card. This includes coverage for “loss of use,” which refers to the amount of money a rental car company can stand to lose while a car is being repaired. If your credit card doesn’t offer coverage for loss of use, you may want to consider purchasing CDW from the rental agency.
- Liability insurance provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. Generally, this doesn’t offer enough protection in a serious accident. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance.
Auto Policy Options
If you don't have comprehensive and collision coverage on your own car, you won’t be covered if your rental car is stolen or if it’s damaged in an accident. If you plan to rent a vehicle frequently, your best bargain is to purchase a non-owner auto liability insurance policy from us. A non-owner auto liability insurance policy covers you for damage that you may cause to someone else’s car and liability for injuries to its occupants or pedestrians, in the event of an accident. However, non-owner auto liability insurance doesn’t provide collision coverage. Collision coverage pays for damage to the car you’re driving if you crash into another car or object.
If you drive an older vehicle, but plan to rent a luxury vehicle, it’s important to make sure that your policy will cover the complete cost of the replacement value of the vehicle you are renting.
One more thing to note: If you are renting a vehicle that is not classified as a passenger car (e.g., a moving truck or 15-passenger van), you must purchase a separate policy from the rental company to be covered in that vehicle.
Top Ways to Save on your Auto Premium
- Consider raising your deductible.
- Keep up your good driving record.
- Drive less to qualify for a low-mileage discount.
- Drive a car with safety features such as anti-lock brakes, airbags, etc.
- Install an anti-theft device.
- Ask about our multi-policy discounts
Your Best Bet
Before you rent a car, contact TSG Financial, A Division of Risk Strategies (516) 747-7373 to find out how much collision and liability coverage you have on your vehicle. In most cases, the coverage and deductibles you have on your personal automobile insurance policy would apply to a rental car, providing it is used for pleasure and not business.
If you don't have comprehensive and collision coverage on your own car, you won’t be covered if your rental car is stolen or if it is damaged in an accident. If you plan to rent a vehicle frequently, your best bet is to purchase a non-owner auto liability insurance policy from TSG Financial, A Division of Risk Strategies.
© 2016 Zywave, Inc. All rights reserved. This Know Your Insurance document is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.
