Whenever you sign a rental car agreement, it is important to understand the specifics of insurance requirements. While all rental companies have different policies, there are some commonalities between all rental agreements. A lot of individuals state that it is a waste of money to buy insurance from the rental company. However, this guide highlights the importance of rental insurance, the features of this insurance and other information you must know before renting a car.
Types of Rental Car Insurance Coverage
There are four main types of car insurance offered by rental companies. These include collision damage waiver, liability insurance, personal accident insurance and personal effects coverage. A collision damage waiver covers costs associated with damage to a car or the loss of a vehicle. This often has the highest daily price. Liability insurance is coverage for the costs associated with damage to others that is your fault. Personal accident insurance covers medical bills or emergency medical expenses. Personal effects insurance protects your belongings inside the car and is useful if you are carrying any valuables.
If Something Goes Wrong, It is Your Fault
Rental car companies have a slew of insurance policies for customers to select. However, the most important feature in any rental insurance contract is a “collision damage waiver.” It is imperative that customers buy this type of insurance from the rental company because it covers the costs of damages in the event of an accident. If you do not have this insurance, or you get it from another company, the rental car provider may put the responsibility of accident costs on your shoulders. It is possible your insurance provider will cover these costs, but it is not guaranteed.
Understand All the Coverage Terms
If you own a car, it is extremely likely that you have a comprehensive personal car insurance policy. In many cases, this policy provides extended coverage for car rentals. However, these policies do not cover every aspect of rental car insurance, as indicated by the first tip. Contact your insurance company to verify all the features of their extended rental coverage. This will help you speak with the rental company and plug any holes in the coverage with their policies. When it comes to rental car insurance, it is better to pay a little extra to be on the safe side.
Avoid the Rental Company’s Roadside Assistance
Typically the most expensive part of a rental car insurance agreement is the roadside assistance feature. Companies such as Hertz offer this coverage, but they include it at a heavy markup. Instead of spending hundreds of dollars on their service, get an AAA Plus membership. Not only is this membership applicable to your regular car, but it offers roadside assistance if there is a problem with your rental car for a fraction of the price. Keep in mind, AAA coverage only extends to the 50 states in America, not other countries.
Double-Check Everything before Handing Over the Rental Car
There are many cases of individuals who handed in their rental car and paid their bill, only to discover a letter in the mail a few weeks later from the rental company. These letters typically include lengthy bills for damage payments. Make sure you check the rental car when turning it in. Resolve any damage-related bill issues on the spot. The longer you wait, the likelier a rental company will stick added costs onto the bill that are tough to contest.
Check for “Loss of Use” Policies
Some rental companies now include “loss of use” policies within their rental agreements. This means that a rental company can charge you the money they potentially lost by not having the car available for pick up. For example, if damage to your vehicle results in three days of it not being ready for use, they can charge you three full days of potential rental fees. This charge is not covered by your regular auto insurance but is covered by some credit card companies. Check with your card provider. If they do not offer coverage, get the necessary protection from the rental company when taking out the car.
Take Pictures. Lots and Lots of Pictures
Smartphone cameras are the best thing to happen to rental car users around the world. It is now possible to take any number of pictures before and after you take out a rental car. If you want to be very safe, take pictures from every angle before you drive the car away for the first time. When you bring the car back, take pictures of the exact same spots to indicate the car’s condition. This helps when filing a claim or settling a dispute related to damage charges. It may also help when asking your regular insurance provider, or credit card company, to pay damage costs associated with rental car accidents.
Reject the Arbitration Provision in Rental Agreements
Most rental car companies include an arbitration provision deep within the rental car agreement. This states that you agree to undergo private arbitration with the company in the event of contested damage claims. It is possible to reject this provision on the spot, or by emailing the company within 30 days of your rental agreement’s start date. Rejecting this provision ensures you can seek arbitration on your terms, not theirs.
Contact Your Personal Insurance Company Immediately
If you get into an accident in a rental car, it is a good idea to tell your personal insurance provider within a few days. Even if you are not using them as your first line of insurance protection, it is better they can file a report to use later. In this scenario, all you need to do is contact them at a later date and say you need their help in filing the claim. With a report already on hand, they can do this quickly and efficiently. If you wait a few months before contacting them, the process is more complicated and drawn-out.