Picture this: you're on vacation, driving down a scenic route in your rented car, feeling the wind in your hair and the sun on your face. Suddenly, out of nowhere, another car hits you from behind. Your heart sinks as you realize that not only is there damage to the rental vehicle but also to yourself and any passengers.
Now imagine hearing that you have to pay for all of it out of pocket because you chose to skip rental car insurance. Trust us when we say that skipping out on rental car insurance can cost you big time – read on to find out why!
What is Rental Car Insurance?
Rental car insurance is an insurance policy that covers the damages to a rental car that you may incur while driving. It is also known as collision damage waiver (CDW) or loss damage waiver (LDW). Rental car insurance typically covers the cost of repairs or replacement up to the actual cash value (ACV) of the rental car. In some cases, it may also cover towing, personal belongings, and other expenses.
Most rental car companies offer CDW/LDW as an optional add-on to your rental agreement. You may be tempted to decline this coverage to save money, but it could end up costing you a lot more if you have an accident. Here’s why:
If you damage a rental car, the rental company will charge you for the repairs or replacement up to the ACV of the car. The average cost of repairing a fender bender can range from $1,500 to $3,000, while replacing a totaled vehicle can cost upwards of $30,000.
Without rental car insurance, you would be responsible for paying all of these costs out-of-pocket. Even if you have your own auto insurance policy, it may not cover damage to a rental car. Most personal auto insurance policies exclude coverage for “non-owned vehicles” like rentals cars. And even if your policy does provide coverage for rentals, it likely comes with a high deductible that would leave you on
Benefits of Purchasing Rental Car Insurance
If you're renting a car, you may be wondering if you need to purchase rental car insurance. After all, you already have auto insurance, so why do you need another policy?
There are actually a few good reasons to purchase rental car insurance. First of all, your personal auto insurance policy may not cover damage to a rental car. Secondly, even if your personal policy does cover rentals, it may not provide enough coverage. And finally, rental car insurance is relatively inexpensive and can give you peace of mind while driving a rented vehicle.
So what are the specific benefits of purchasing rental car insurance? Here are a few:
- Rental car insurance covers damage to the rental vehicle, regardless of who is at fault.
- Rental car insurance provides liability protection in case you cause damage to someone else's property or injure someone while driving the rental car.
- Rental car insurance can save you money if you have to cancel your trip or return the car early due to an accident or other covered incident.
- Rental car insurance can provide coverage for expenses like towing and roadside assistance.
Cost of Skipping Rental Car Insurance
If you're like most people, you probably don't give much thought to rental car insurance when you're booking a car for your next vacation. After all, your personal car insurance should cover any damage that might occur, right? WRONG.
Most personal car insurance policies have a clause that excludes coverage for rented vehicles. That means if you have an accident in a rental car, your personal policy won't pay a dime. You'll be responsible for the entire cost of repairs, which could easily run into the thousands of dollars.
And it gets even worse if you cause an accident that injures someone else. You could be facing a lawsuit that could ruin you financially.
So how much does rental car insurance cost? It depends on the rental company and the type of coverage you purchase, but it's usually pretty reasonable - around $10-20 per day. That's a small price to pay for peace of mind and protection from financial ruin.
Factors to Consider When Buying Rental Car Insurance
When deciding whether or not to purchase rental car insurance, there are several factors you should take into account. The first is what type of coverage you currently have on your personal auto insurance policy. If you have comprehensive and collision coverage, you may already be covered for damage to a rental car. However, you'll want to check with your insurance company to be sure.
Another factor to consider is whether or not your credit card provides any type of rental car insurance coverage. Many cards will offer some form of protection, so it's worth checking before you purchase anything from the rental company.
Consider the cost of the rental car insurance relative to the value of the car. If you're renting a very expensive car, it might make sense to pay for the extra protection. But if you're renting a more modest vehicle, the cost of the insurance might not be worth it.
Alternatives to Rental Car Insurance
If you're thinking about skipping rental car insurance on your next trip, think again. While your personal auto insurance may cover rental cars, there are often exclusions and limitations that could leave you footing the bill for damages in the event of an accident.
Credit card companies also offer some level of rental car insurance if you use their card to pay for the rental, but coverage varies widely so it's important to check with your issuer before you hit the road.
If you're still not convinced that you need rental car insurance, consider this: the average cost of a fender bender is over $3,000, and the average cost of a more serious accident is over $15,000. For most people, those kinds of repairs would be completely out of pocket without rental car insurance.
Conclusion
Skipping rental car insurance when you're renting a car can be a costly mistake. Not only could you end up having to pay for any repairs or replacements out of pocket, but if you get into an accident, you could face serious financial hardship and even legal troubles without the right coverage. We hope this article has helped make it clear why skipping rental car insurance is not worth the risk and that by taking the time to do your research ahead of time, you'll be able to find a plan that works for both your budget and your peace of mind.