Before you pick up a rental car, you should know what arrangements to make for insurance. Not knowing could cost you thousands of dollars if something happens and you're not covered. But it would also be foolish to pay for coverage you don't need.
Car rental insurance can add up to more than $30 a day and could double the cost of renting a car, depending on what coverage you take, what type of car you rent, and which company you're renting from.
Essentially, rental agencies offer four types of coverage, most of which you already may have through your existing auto, home, and medical insurance policies: collision damage waiver, or loss damage waiver, liability insurance, personal accident insurance, and personal effects insurance. Other protections may be available through your credit cards. Typically, the coverage you have on the automobile you own also applies to vehicles you rent in the United States.
In addition, home or apartment policies insuring against the loss or theft of your possessions often cover your personal effects away from home. Your health and life insurance also might provide benefits in the event of an accident in a rental vehicle.
Keep in mind that if your current coverage extends to your car rental, you will probably face the same limitations you have on your existing insurance. That often means your insurer chips in only after you exhaust all other coverage--including what you've bought from the rental agency. And any deductibles you have through your existing policies also would apply. Also consider that if you have an accident with a rental car and use your auto policy to cover damages, it could affect your insurance rates.
Before you rent a car, find out how your existing insurance would cover you. Read through your policies or contact your insurance agent.
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