This article about rental car insurance.
Renting a car? Buying the over-the-counter insurance that rental car
companies sell could be the dumbest move you've made all day. That is,
unless it's the smartest.
The question is, are you covered? Too many travelers have no idea,
and it's in that cone of uncertainty that the rental car companies are
able to pounce and profit.
If you don't know, for example, what your liability coverage your own
auto insurance policy provides, or whether or not your credit card is
any use in times of rental car trouble, then why, the agent will be
asking you, would you want to drive off the lot without peace of mind?
Why indeed.
Trouble is, peace of mind doesn't come cheap. Think hundreds of
dollars added to your weekly rental costs, which are already
skyrocketing, as competition goes all but extinct in the
more-consolidated-than-ever rental car industry. It's war, and you've
got to be ready to do battle. We're here to help.
Are you the owner of a car?
Yes? Great. Then you probably have an insurance policy. You'll say
this to the guy behind the counter. He'll counter with: Do you know if
your coverage is adequate? Are you going to be stuck with a huge
deductible? They'll throw it all at you. And if you can't answer the
questions confidently, suddenly, you'll be wondering: Hey! Maybe I
should be buying the insurance here, because, really, what if something
happens and I'm not covered? Stop. Stop it right now. Before you leave
home, examine your policy documents or call your insurance provider and
ask. Questions like: Am I covered for damage, theft and loss of use?
Liability for injury to others (personal and property) while in the
rental car? Personal effects if stolen or damaged? How screwed am I, as
regards deductibles and such, if I find myself in any trouble related to
the above? You should know the answers to all of these questions.
Coverage through your credit card? Maybe. Probably not.
Too many people think that their auto insurance policy plus their
credit card coverage benefits equals all set. Again - maybe you are,
maybe you're not. Have you read the documents? Too many renters learn
the hard way that what most cards provide is "secondary" coverage, meant
only to bulk up your auto insurance policy, paying out after that has
been exhausted. Your Visa card, for example, can be a great asset, but
if you don't follow all their rules (the coverage may be invalid if you
rent a mid-size car in Cincinnati on a Tuesday when it's raining), the
very thing you think is going to keep you out of trouble might end up
leaving you in a world of hurt. Across the board, it's wrong (really,
really wrong) to assume that one size of coverage fits all card brands.
Some higher-end Mastercards might be great, for example. Others card
levels may offer little protection. Examine each card document
carefully. Finally, note that credit cards tend to mostly offer
collision, damage and theft coverage, if they offer anything at all -
personal liability (hitting a pedestrian, crashing into a store front,
or injuring drivers in another car) and personal effects are generally
your problem. Again: Read.
So you've got nothing.
Say you go over both your auto insurance policy and your credit card
documents, hundreds of time. Say you now fully accept that rental
car-wise, you're less than protected. Don't just wing it - winging it
can lead to all kinds of trouble, such as you being stuck with a bill
for thousands of dollars or a huge jury award. Besides upgrading your
credit card to something more useful and bulking up on your auto
insurance you can also sign up for primary coverage with a third party
(but again, this will only be coverage for damage to the rental car,
it's not personal liability coverage).
What is this "primary coverage with a third party?"
Simply: It is a separate policy that protects you when you rent cars.
Maybe you are protected with your credit card and your auto insurance
policy, but if you get into an accident and have primary coverage
elsewhere, you can leave your insurer out of the loop entirely, avoiding
any potential rate increases. American Express cardholders can purchase
a Premium Rental Car Protection policy for less than the cost of one
day's damage waiver in many destinations. For $24.95 per rental period
of up to 42 days -- $17.95 if you live in California - you've got
$100,000 in coverage for damage and theft, plus $100,000 of Accidental
Death or Dismemberment coverage, $15,000 for excess medical expenses and
up to $5,000 for personal property loss. The real deal here? No
deductible. Nada. It's a good policy. Best of all, it kicks in
automatically when you begin your rental using that card. When you do,
you'll be surprised at how easy it is to stop agents in their tracks -
most know about the policy. Tell them you've got it and they'll
generally understand that they're dealing with someone who has come
prepared.
But what about other liability?
As long as any accidents involve just you and, say, a lamppost,
you're now well and truly protected. Bump into a billionaire in a
supermarket parking lot, however, and you may not be adequately
protected, liability-wise. Many drivers lack the proper liability
protection, often assuming that that they're safe, hiding behind their
homeowners or renters policies. More than once, after hearing about all
the coverage we've got, the rental car agent has asked the question,
"What about liability?" While rental car companies are required to build
basic (and limited) liability protection into their rates, they won't
tell you this. Generally, you're going to be fine in a fender bender
situation, but if you find yourself in some horrible scenario where you
can be sued for lots of money, then make sure you are covered (if you're
a high net worth individual, you probably have an umbrella liability
policy, which should be enough, but check with your agent). For those
that are not covered, the agent will be happy to sell you Supplemental
Liability Protection, often quite reasonably priced at about $10 per
day. Then again, liability protection isn't something you should be
sorting out on the fly with some kid at the Enterprise counter - this is
a matter for your insurance broker.