How to choose car rental insurance

By George Garza
Info Guru,

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Handing over keys
Before you sign the contract and the rental agency hands over your keys, make sure you know enough about the different types of coverages and whether you might need them to fully cover you in the case of an accident or theft
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Do you know what kinds of coverage you should get?

Car renting is very popular now especially when people travel by air and they need a car at their destination. So what do you do next after you decide on what car to rent? It's about the insurance.


Just what should you get? If people are indecisive, then it arises from not knowing if their own personal or business car insurance will cover them while renting a vehicle. Fair enough. So what kinds of coverages are there?


Types of Coverage


These types of car rental insurance coverage are usually offered while you're waiting at the car rental counter. Many of these may be covered with your personal or corporate auto and health insurance coverage.


- Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)

- Physical Damage Waiver (PDW)

- Personal Liability Insurance Supplement (LIS)

- Personal Accident Insurance Coverage (PAI)

- Personal Property Insurance/Personal Effects Coverage (PEC)




CDW or LDW waives the right of a rental car company to recover money from the renter if the vehicle is damaged or stolen while in your possession. However, third-party damages incurred to someone else's car during your rental are not covered. This type of accident is normally covered by your own auto insurance. But some CDW's will become void if you drive in a negligent manner or drive out of the state where you rented the car if geographical restrictions apply.


Personal Liability Insurance Supplement (LIS)


With a Personal Liability Insurance Supplement (LIS), the car rental agency may offer supplemental or additional liability coverage that will pay over and above what your personal liability or business insurance covers. Should you not already have personal liability coverage then you should purchase the coverage offered by the car rental agency.



Personal Accident Insurance Coverage (PAI)


Personal Accident Insurance Coverage (PAI) goes into effect if you get into an accident. PAI coverage will provide a one-time payment for you or a passenger in case of death, injury or maiming.


Personal Property Insurance/Personal Effects Coverage (PEC)

Personal Property Insurance/Personal Effects Coverage (PEC) pays you when you have something stolen from your car. Get it if you are traveling with high-value items.


Why Get Car Rental Insurance?


Of course the question is, why get coverage at all? Insurance experts say the main reasons are liability protection, convenience and savings.


Most rental car companies will hold you totally responsible for your rental vehicle if it is damaged or stolen. You can avoid a lot of problems by having the car insurance information handy at the time and place of your accident.


Normally the only way to change your rental coverage options during the time of your rental is by bringing your rental back to the agency and beginning a new rental agreement. So it is better to avoid the inconvenience and get the coverage up front before you drive the car out of the lot.


The coverage we've listed can add up to $12 - $25 per day on your final car rental bill. So it is not necessary to pay for coverage you already have. However, you may want the listed coverage in order to protect your own existing personal car insurance premiums.


Should you get into an accident, your rates may go up as a consequence. But not if you don't file a claim with them. Instead you use the agency's insurance carrier to file the claim.

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