More premium credit cards are likely to cover collision or loss damage to the rental car similar to what car rental company insurance offers. And they generally figure that daily loss at the full retail rate. personal injury or property damage you cause. Insurance. If you hire a car, excess insurance could save you a lot of money. 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. But we can all agree that insurance premiums are out of control! Here’s what you need to know before you shell out for car rental insurance on your next vacation. Your personal auto insurance extends and covers you while driving a rental the exact same way as if you were driving your car. Fewer insurance companies cover their customers who rent cars internationally, so, again, contact your company to find out your policy provisions. 6 Minute Read No need to cave in to that classic, fear-driven sales pitch at the rental counter. A few premium credit cards offer primary collision coverage, meaning the card takes full responsibility for the payment. 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. If you’re unwilling to accept any risk at all, you might want to buy that overpriced CDW. I took car hire excess insurance with Worldwideinsure.. 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. It’s a good idea to understand rental car insurance products before you pick up your car. 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. 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 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. Sign up for our free newsletter. Perkins was founding editor of Consumer Reports Travel Letter, one of the country's most influential travel publications, from which he retired in 1998. 7 Minute Read No other approach—your own insurance, your credit card, or a third-party policy—is as comprehensive or convenient. These excess amounts can sometimes be as much as $8,000. How does gap insurance work? There are exceptions, of course. He has also written for Business Traveller magazine (London). Coverage Options. At the end of the day, it's all about weighing your risk against your reward." So, before you plan on using your own insurance, check its coverage. 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. These days, most credit cards provide “free” collision coverage for car rentals, provided you use the card to secure the rental. Be the first to discover secret destinations, travel hacks, and more. But coverage on most cards is secondary, meaning the card picks up only what you can’t first recover from your own insurance. But if you have excess insurance, it would cover this cost for you. 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? Unfortunately, some rental companies don’t cooperate with credit card issuers in providing this type of documentation in a timely manner. Travel Smarter! If it does cover rentals, you can place a claim on it. Contact your insurance ELP to save money today! It's a type of car insurance to cover your loan if the car gets totaled. Editor’s note: This story was originally published in 2017. Car rental services has allowed people to enjoy successful trips without bringing their own cars. Your credit card may cover some little added extras like administration fees and loss of use fees, so it’s worth investigating. Towing charges, if you are unable to drive the car back to the return station. 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. Let's take a look and see if you need it. If you own a vehicle and it's insured, there's a good chance you don't need to spring for rental insurance. Occasionally, however, your own insurance, credit card, or third-party policy may not cover an unusual charge a rental company might impose. He was also the co-author of the annual "Best Travel Deals" series from Consumers Union. 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. Or, if your personal vehicle is in the shop being repaired, the anticipated repair cost may … This experience is uncommon, but not unique. 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. Many drivers have to pay out between $10 – $30 per day for a loss damage waiver. You can cover your major damage responsibility by relying on your own insurance, a credit card with insurance, or a third-party policy. 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.. 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. We offer our unbiased opinions and do not accept compensation to review products. By Bradshaw and Weil Inc. June 28, 2018 August 6th, 2018 Auto Insurance. 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. Here's my story. 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. 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. 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. 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? Here's what to know about each. 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. © 2021 Smarter Travel Media LLC. Protection for the car rental companies. If you don’t have substantial liability insurance, you might consider buying the rental company’s offering. 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. You may wonder if it’s worthwhile to buy car rental insurance coverage offered by the rental car company. 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? Rental cars have become a staple of the great American vacation. No wonder the agents push it so hard: It’s clearly a lot more profitable than the car rental alone. Is rental car insurance really worth it? Your personal auto coverage does not cover vehicles like moving trucks. That’s why many rental companies won’t accept rentals via debit card, or a credit card with a small limit. 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. But always check with your insurance company before you pick up your rental car to be sure. But it doesn’t need to be expensive if you shop around. That coverage is provided by a third-party insurance company such as Allianz. A sample credit card benefits statement describes coverage as: “Physical damage and/or theft of the covered rental vehicle. Unfortunately, I didn’t have “rental reimbursement” insurance so my insurance company will not provide me with a rental car. A nationally recognized reporter, writer, and consumer advocate, Ed Perkins focuses on how travelers can find the best deals and avoid scams. 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. (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. Rental car insurance. 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. FREE livestream to kickoff your money reset! If you don't have a card which offers rental insurance, then I would definitely get the insurance offered by the car rental company. 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. 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. Hire car companies can apply a £1,000 excess while you are renting a vehicle. All rights reserved. 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. Car rental companies in most countries are required by law to include liability insurance. I was left with responsibility.”. At the car rental counter, when asked if they want insurance for their rental car, many travelers say "no." Things you buy may earn us a commission. Is it really worth it?” And every year we give our clients the same black and white answer… it depends. No matter how often I cover the problems that come with collision damage under car rental insurance, consumers continue to share their frustrations. In general, your individual auto policy will cover you when you drive a rental car. If you don’t buy CDW, rental companies can charge for more than just fixing the damage. 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