What's The Point In Getting Insurance With Rental Cars?

By Author: Norris Rios
Total Articles: 572
Comment this article

How many times have you used rental autos and had to make the decision whether or not buying additional insurance for the rented vehicle. On one hand it's an additional cost you simply don't want to drain your wallet. On the other hand, having such a backup when driving a rented car can save from a lot of trouble if something happens while you're behind the steering wheel. So, is there any sense in getting rental car auto insurance or not?

A certain amount of rental car insurance is simply a must when using such a vehicle. You can get the insurance from the rental company, any insurer you can typically get auto insurance quotes from, or even a credit card union.

Most rental car companies typically offer basic auto insurance, which includes third party liability, personal accident and accidental death insurance. It is usually offered as a Collision Damage Waiver (CDW), which has become the industry standard. CDW basically means that the renter won't be liable nor pay for any damage while using the rented vehicle. Sometime, an additional liability policy may be included, protecting the renter from any retribution ...
... from third parties.

So, CDW sounds like a good deal? Probably, until you see the price tag. With an industry average of $9-$19 per day, CDW is quite a costly option that can easily double your rental rate. Besides, with so many insurance companies extending their coverage to rented autos, getting a CDW doesn't seem like the brightest idea you can come up with if your budget is limited.

Still, CDW may be a necessity, especially for those traveling a lot, prone to accidents or taking trips to other countries where their auto insurance policies do not apply. In such circumstances you can even be required to include a CDW with your rental contract regardless of whether you like it or not.

What may happen if you do not get rental car insurance and end up in an accident? Things will get bad for your wallet, that's for sure. You will be charged for the damage to the car and in many cases the rental company will also charge you for the lost income and diminution of market value of the damaged vehicle. And that will cost you far more than a simple CDW.

You may think that your credit card company's insurance protection may help you with evading such aggressive practices of rental companies, but it's not quite so. Most credit card companies require the utilization fleet logs to be revealed by the rental companies, and that's something that most companies won't agree to. Besides, credit card insurance is generally regarded as a secondary weaver, meaning that they will only pay you only after a claim was filed to the auto insurance company in the first place.

So, as you see, there may be a reason for buying rental car insurance, and it depends on the circumstances. One great way to avoid it is having your personal auto insurance policy covering rental car use. Keep that in mind when looking for auto insurance quotes next time, because you can save yourself from a lot of hassle when dealing with rental cars.