Before editing Consumer Reports Travel Letter, Perkins spent 25 years in travel research and consulting with assignments ranging from national tourism development strategies to the design of computer-based tourism models. And you still have to pay the rental company up front, then file for reimbursement from your card issuer. Major Credit Cards - Many credit card companies, such as American Express, offer secondary Collision Insurance, that means that if you have a primary policy such as Personal Auto, the AMEX insurance only kicks in after the limits of your Personal Auto have expired. Rental cars have become a staple of the great American vacation. Things you buy may earn us a commission. These excess amounts can sometimes be as much as $8,000. Here's my story. Shop around to find the cheapest deal and avoid buying insurance directly from your rental company. But we can all agree that insurance premiums are out of control! But coverage on most cards is secondary, meaning the card picks up only what you can’t first recover from your own insurance. It sometimes costs even more than the base car rental rate. That's helpful because it reduces your out-of-pocket expenses. For most travelers and circumstances, credit card or third-party coverage is sufficient, and primary coverage is a lot better than secondary. The short answer: Sometimes. Valid loss-of-use charges assessed by the rental company while the damaged vehicle is being repaired and is not available for use, as substantiated in the company’s fleet utilization log. You can cover your major damage responsibility by relying on your own insurance, a credit card with insurance, or a third-party policy. 6 Minute Read Car Rental Insurance Cost. Editor’s note: This is a recurring post, regularly updated with new information.. But always check with your insurance company before you pick up your rental car to be sure. However, credit cards don’t usually cover you for liability i.e. A sample credit card benefits statement describes coverage as: “Physical damage and/or theft of the covered rental vehicle. Lots of travelers successfully rely on lower-cost alternatives to CDW without encountering any problems, sure. After all, if you’re using the rental to go on vacation, you may already have a budget for your trip, and the extra cost associated with rental car coverage may seem unnecessary. If you rent a car through one of the big online travel agencies (OTA) such as Expedia or Priceline, the agency normally offers you the option to buy collision coverage for around $10 a day. If you are planning to use a rental car abroad, you could save a significant amount of money by insurance in advance, and not at the car rental desk. You could be saving hundreds! In general, your individual auto policy will cover you when you drive a rental car. Let's take a look and see if you need it. So the car hire firms try to persuade you into buying super CDW insurance to cover this first £500-£1,000. You don’t need it. If you don’t buy CDW, rental companies can charge for more than just fixing the damage. Car repair insurance could protect you from an unexpected expense, like paying for a busted air conditioning unit. All Rights Reserved. Editor’s note: This story was originally published in 2017. No wonder the agents push it so hard: It’s clearly a lot more profitable than the car rental alone. Why is it then important to include hire car insurance in the total package? Sign up for our free newsletter. Is it really worth it?” And every year we give our clients the same black and white answer… it depends. More people opt to buy the extra coverage when traveling abroad because of the increased risk of accidents due to different driving conditions and traffic laws. When renting a car, is purchasing additional insurance worth the extra money, or is it just a cash grab on the part of the rental companies? I took car hire excess insurance with Worldwideinsure.. If you don’t have substantial liability insurance, you might consider buying the rental company’s offering. But this coverage is generally limited to driving in the U.S. and maybe Canada, and won’t cover car rentals in Mexico, Europe, or anywhere else. Car rental companies in most countries are required by law to include liability insurance. We all know that car repair and maintenance costs a lot. But, rental cars come with the question, “Do I purchase the extra insurance coverage or take my chances?”. If it does cover rentals, you can place a claim on it. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuse every day at SmarterTravel. But is it right for you? Typically, a CDW starts at around $30 per day and can go higher. Rental car insurance can come from your auto policy, the rental counter, a credit card or an independent company. Most companies offer these coverage options: Collision/Loss Damage Waiver – Costing as much as $20 a day, this covers theft or damage to the rental vehicle in a collision. You may wonder if it’s worthwhile to buy car rental insurance coverage offered by the rental car company. Our guide will explain the 4 main reasons why car rental excess insurance is worth it. Here are some tips that can help you save some money on insurance. In the U.S., required coverage can be ludicrously small (usually only the minimum required by the state)—it’s usually much better in Europe. (CDW terms and conditions vary by car rental company, so you’ll want to read them carefully before committing.) Gap insurance is not coverage for your brand-new khakis. He was also the co-author of the annual "Best Travel Deals" series from Consumers Union. It's a type of car insurance to cover your loan if the car gets totaled. Born in Evanston, Illinois, Perkins lives in Ashland, Oregon with his wife. Do you have the right auto insurance coverage? What is non-owner car insurance? Be the first to discover secret destinations, travel hacks, and more. Perkins was founding editor of Consumer Reports Travel Letter, one of the country's most influential travel publications, from which he retired in 1998. 1. The actuarial cost to the rental company—the amount it would allocate toward a damage pool based on risk experience—is probably just a few dollars a day; the rest is theirs to keep. As with many travel extras, if you leave buying car hire excess insurance to the last minute, you could end up paying well over the odds. Consumer advocate Ed Perkins has been writing about travel for more than three decades. Okay, I'm ready to compare. Kusmider's case highlights an age-old consumer question: Is rental car insurance worth it? It all sounded great until I submitted my claim. “Loss of use,” meaning the potential revenue lost while the car is out of service being fixed, even if the company had lots of other cars available. More premium credit cards are likely to cover collision or loss damage to the rental car similar to what car rental company insurance offers. If you want that full flexibility and peace of mind, pay for CDW. If you can pay the initial rental fee with a debit card, you’ll still need to provide a credit card to cover a possible damage claim, which would be filed before you can leave the return counter. A nationally recognized reporter, writer, and consumer advocate, Ed Perkins focuses on how travelers can find the best deals and avoid scams. Or, if your personal vehicle is in the shop being repaired, the anticipated repair cost may … Unfortunately, some rental companies don’t cooperate with credit card issuers in providing this type of documentation in a timely manner. Unfortunately, I didn’t have “rental reimbursement” insurance so my insurance company will not provide me with a rental car. Another gotcha in the above fine print: This card (and many others) pays for loss of use only if verified by the rental company’s log. Does my insurance cover rental cars? The additional coverage will also help you avoid the hassle of filing a claim in a foreign country. Renting a Car with a Debit Card Just Got Easier, Renting a Car Under Age 25 Is Possible, But Pricey, Travel Insurance Coverage: 13 Things Your Policy Won’t Cover, This One Trick Could Save You Hundreds on Cheap Car Rentals, 10 Clever Car Rental Hacks That’ll Save You Money. Here’s what you need to know before you shell out for car rental insurance on your next vacation. personal injury or property damage you cause. Some credit cards offer insurance when you rent a car using your card that covers the rental car if you’re in an accident or if the rental car is stolen or damaged. They also charge for: Most non-CDW car rental insurance will cover those extras. For info on these editor-selected items, click to visit the seller’s site. Note that this typical Visa card’s benefits do not cover diminished value or administrative costs. Your credit card may cover some little added extras like administration fees and loss of use fees, so it’s worth investigating. Perkins' travel expertise has led to frequent television appearances, including ABC's "Good Morning America" and "This Week with David Brinkley," "The CBS Evening News with Dan Rather," CNN, and numerous local TV and radio stations. This means you would have to pay for any damage up to the value of £1,000. When vacationers rent cars this summer for their adventures, they'll have to decide: Do they want the insurance the company is offering. He is the author of "Online Travel" (2000) and "Business Travel: When It's Your Money" (2004), the first step-by-step guide specifically written for small business and self-employed professional travelers. Let's find out. We hand-pick everything we recommend and select items through testing and reviews. No need to cave in to that classic, fear-driven sales pitch at the rental counter. And they generally figure that daily loss at the full retail rate. By proceeding, you agree to our Privacy Policy and Terms of Use. If the rental car is damaged or stolen and you have to file a claim, it will affect your premium the same as if the incident involved your own car. The takeaway from all this: No alternative source of collision damage coverage—your auto insurance, your credit card, or a third party—completely isolates you from risk. You'll have peace of mind while on the road, and what's more, if something happens including theft, loss, physical and material damages to other parties, then you'll … Ireland: 6-Nt, Upscale Trip w/Air, Castle... Lowest Cruise Rate: 7-Night Alaska Cruise... Round-Trip Business Class Flights to Europe, Car Rental Hidden Fees (and How to Avoid Them), No Credit Card? If you own a vehicle and it's insured, there's a good chance you don't need to spring for rental insurance. Your car rental company will offer you the chance to purchase damage waivers (the collision damage waiver, for example), theft protection, personal accident insurance and optional coverage when you pick up the car. You can also buy collision coverage independently: Bonzah, for example, sells coverage at around $9 per day. Car hire excess insurance can help you save a lot of money if you ever have to make a claim for damage to your rental car. If you do not have Personal Auto Insurance purchasing the CDW and Liability insurance from the car rental companies is a good idea. These days, most credit cards provide “free” collision coverage for car rentals, provided you use the card to secure the rental. That coverage is provided by a third-party insurance company such as Allianz. Not only will this include car rental insurance but also medical, trip cancellation, your belongings from theft or damage, ... To us that’s totally worth it not to worry about what if something does happen, you know you’re covered by insurance. A reader recently emailed me: “I’m interested in finding a complete bumper-to-bumper, ‘drop off the keys at the counter’ car rental coverage when I travel. Rental car insurance. Advertisement . Occasionally, however, your own insurance, credit card, or third-party policy may not cover an unusual charge a rental company might impose. Your personal auto coverage does not cover vehicles like moving trucks. In that case, you will need to purchase insurance from the truck company. Car rental companies desperately want you to buy their collision damage waiver, or CDW (sometimes also known as loss damage waiver, or LDW), and will go to great lengths to make you pay for even the smallest damages if you don’t. Fewer insurance companies cover their customers who rent cars internationally, so, again, contact your company to find out your policy provisions. The bottom line here is to make sure you don’t pay for more than you need, but don’t take unnecessary risks to save a buck either. But you don’t buy that from a car rental company: It usually comes with household, homeowner, or tenant insurance, and it covers far more than a car rental. All rights reserved. Administrative fees associated with the claims process. At the car rental counter, when asked if they want insurance for their rental car, many travelers say "no." All items are in stock and prices are accurate at the time of publication. Well, it's a type of insurance for people who don't own a car, but still find themselves driving a lot, for whatever reason. Big-name companies love to say theirs is the best. In many cases, if your regular auto insurance covers collision damage to your insured car, it also covers damage to a short-term rental. Hire car companies can apply a £1,000 excess while you are renting a vehicle. If you hire a car, excess insurance could save you a lot of money. Perkins' advice for business travelers is featured on MyBusinessTravel.com, a website devoted to helping small business and self-employed professional travelers find the best value for their travel dollars. Car rental excess insurance is a type of insurance policy that will cover the excess charged by rental companies if the car is damaged or stolen. A few premium credit cards offer primary collision coverage, meaning the card takes full responsibility for the payment. A loss damage waiver – also called a collision damage waiver – is a product offered by car rental companies to auto renters. Is rental car insurance really worth it? Given the relatively low cost of personal effects coverage offered by rental car insurance, which averages about $2 a day, the additional insurance is worth it. Here's what to know about each. Many drivers have to pay out between $10 – $30 per day for a loss damage waiver. That means signing a credit card bill for hundreds or even thousands of dollars when you return the damaged car, and not knowing if you’ll get that money back. | How does gap insurance work? Your personal auto insurance extends and covers you while driving a rental the exact same way as if you were driving your car. If you need to update your auto insurance policy, Dave recommends insurance Endorsed Local Providers (ELPs) who can save you money on car insurance and get you better coverage. Taking a waiver agreement out at the rental desk could cost you as much as £150 a week, says Ben. It’s a good idea to understand rental car insurance products before you pick up your car. Contact your insurance ELP to save money today! Excess charges are way higher than you expect. Is car insurance worth it? Some products are sent to us free of charge with no incentive to offer a favorable review. I was left with responsibility.”. It has been updated to reflect the most current information. Protection for the car rental companies. If you’re unwilling to accept any risk at all, you might want to buy that overpriced CDW. If you don't have a card which offers rental insurance, then I would definitely get the insurance offered by the car rental company. We offer our unbiased opinions and do not accept compensation to review products. And if your net worth is in six figures, you probably need an “umbrella” liability policy that covers a million dollars or more. Insurance. You should never get behind the wheel of a car—or lawnmower, for that matter—without liability protection. By Bradshaw and Weil Inc. June 28, 2018 August 6th, 2018 Auto Insurance. But in all of those cases you have to pay a damage claim up front, then recover as much as you can (all of it, you hope) by filing a claim afterward. Unfortunately, says Kissell, "There is no easy way to say whether the cost of car rental agency insurance is 'worth it'. But otherwise, no matter how banged up the car could be, you’re off the hook: Just turn it in and be on your way. Towing charges, if you are unable to drive the car back to the return station. | No Comments . But, in some cases, coverage depends on cooperation from the rental company—and it may not be forthcoming, as our reader’s above wasn’t. He has also written for Business Traveller magazine (London). It’s a good idea to understand rental car insurance products before you pick up your car. “Diminished value,” or the potential loss of the car’s resale value (because of your damage) when the rental company disposes of it, usually within two years. Erie rental car insurance is usually included in a driver's personal car insurance policy if the driver carries liability, comprehensive, or collision coverage and is driving in the U.S. Each policy is unique, though, and there may be certain exclusions based on your specific situation. When you go to rent a car they always tell you tell you that you should get the insurance but should you? The rental company may charge a deposit on your debit card and then refund the money when you return the car in good condition. Coverage Options. When you buy a CDW, the rental company surrenders its rights to charge you for damage to a car rental—with a few exceptions, such as tire damage or gross negligence. Most car rental insurance policies carry personal effects coverage, which covers any personal items damaged in a collision or stolen from the rental car. Most companies offer these coverage options: If you decide not to purchase the extra coverage from the rental company, there are a few things you should be aware of: Renting a car outside the U.S. brings its own challenges. 7 Minute Read Typical third-party collision coverage includes about the same contingencies as credit card coverage, but because it’s grouped with the booking you won’t have to make any other claims. When factoring in the cost of car rental insurance, each company and the amount of coverage you get will vary, however, one thing is for sure, it isn’t cheap. I recently thought I had complete coverage though a credit card, but when my car suffered a small dent, the car rental company flat-out refused to document that it actually lost income from having the car rental in the shop (which took three weeks to repair a small dent). The cost is a lot less than the rental company’s CDW, but, as with credit card coverage, if you damage the car, you have to pay up front and claim later. Still, you must typically pay your policy’s deductible, and any claims may cause your rates to go up. There are exceptions, of course. Reasonable and customary towing charges related to a covered loss to take the vehicle to the nearest qualified repair facility.”. When on vacation the peace of mind alone that you won't be stuck with a $25k bill should you get into a serious accidental, is worth it. Every summer as travel starts to increase we are met with the question, “Should I buy the rental companies insurance plan when I rent a car? Travel Smarter! That’s why many rental companies won’t accept rentals via debit card, or a credit card with a small limit. Insurance. Still, your best bet is to make sure you’re covered 24/7 with your own insurance so you can forget about the rental company’s overpriced insurance. I am not a risk taker so when I hire motor vehicles, especially in Portugal, I purchase the top up insurance cover to eliminate the excess in case of an incident.. Similarly, many credit cards also cover rental cars. At the end of the day, it's all about weighing your risk against your reward." Car rental services has allowed people to enjoy successful trips without bringing their own cars. That's usually because the optional collision … If you decide to choose supplemental liability, you will need to add on an extra $10 per day. This experience is uncommon, but not unique. ©2021 Lampo Licensing, LLC. If you don't have other car insurance coverage / protection from other sources such as your credit card or your own insurance policy in own car, then for a small price to pay for a rental car insurance, it should still be worth it. No matter how often I cover the problems that come with collision damage under car rental insurance, consumers continue to share their frustrations. Insurance—love it or hate it, we need it. But if you have excess insurance, it would cover this cost for you. FREE livestream to kickoff your money reset! You don’t want to have to pay thousands of dollars for this summer’s rental car if it’s damaged or stolen—just because you didn’t spring for the extra coverage! But it doesn’t need to be expensive if you shop around. It isn't an insurance policy exactly. No other approach—your own insurance, your credit card, or a third-party policy—is as comprehensive or convenient. Car rental insurance policies can also include personal accident insurance, which covers medical costs for you and any passengers due to injuries sustained in an accident with your rental car. If you buy something through our links, we may earn a commission. © 2021 Smarter Travel Media LLC. Car rental companies in most countries are required by law to include liability insurance. We asked experts whether a collision damage waiver is worth paying for. So, before you plan on using your own insurance, check its coverage.