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Car Rental Insurance
Welcome to the tricky and intricate world of car rental insurance. Various insurance products are a significant part of income for car rental companies and you will likely find yourself pressured at the car hire stand into some sort of car rental insurance that may even exceed the price of the rental itself.
Information number 1: Much depends on your nationality. Generally speaking there is a significant difference between the policies of US & Canadian insurance companies and the rest of the world.
Information No. 2: Many drivers are already covered and end up paying car rental insurance they do not need.
Information number 3: Various countries have different rules regarding the car rental insurance. It is really important to study the local rules and conditions (this website provides some insight into car rental insurance within the national sections).
Your first step in determining whether you need a car rental insurance should be a careful study of your personal auto policy. If you are not sure about some details, do not hesitate to contact your agent. Most US drivers are covered for common situations if renting for pleasure. The insurace can be local or extended to other countries and territories - you have to find out before renting. If you are renting a car on company business check the company policies with your employer. You are likely to be covered for most situations.
Check the car rental insurance with your credit card company (or bank). Most credit/debit cards come with some kind of insurance that may or may not sufficiently cover the car rentals. Read the smallprint of your terms and conditions.
Obviously, you may decide to buy the car rental insurance even with full knowledge that you are sufficiently covered just because you don't want to deal with car repair bills in case of an accident.
Even in case you are covered, please notice you may not be reimbursed unless you notify your insurance company within certain time limit (typically 45 days).
Useful terms for car hire insurance: CDW (Collision Damage Waiver) usually covers collision damage only, while LDW (Loss Damage Waiver) - covers responsibility for rental car damage by accident and vandalism as well as theft. LDW also covers Loss of Use - this covers the rental fees for the time car is being repaired. Without LDW the client would be charged these if the accident was related to the client. Sometimes, Theft Coverage is a separate insurance product.
PEC (Personal Effects Coverage) - is the insurance covering loss of personal belongings from a rented car.
PAI (Personal Accident Insurance) - is the insurance covering medical expenses of the driver and all passangers in case of an accident.
SLI (Supplemental Liability Insurance) - covers excess liability expenses up to $1,000,000.
Unless you buy a special insurance, there is always a part of damage that you are obliged to cover. This is called deductible in US or excess in UK. Several insurance products are covering the deductible, for instance Super CDW or Damage Excess Waiver. However, the driver is usually still responsible for damage to tires, roof and windshield - parts of the car most prone to damage.
