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Released: October 09, 2008
Help Desk FAQ
Do I need separate rental car insurance?
The insurance that car rental companies sell can be very expensive — sometimes more per day that the cost of the rental itself! If you have a credit card that offers "loss damage waiver" coverage, it can save you a lot on a rental. However, it is important to understand that credit card insurance typically covers you from having to pay for a damaged or stolen car—not from actions for which you are liable for harm to other people or damage to other vehicles or other people's personal property.
To be safe, call your insurance agent or company and the credit card you will use pay for the rental car.
Ask your auto insurance carrier if your policy provides liability coverage while you are driving a rental car. Consider adding this coverage if your policy does not include it.
- Find out how much coverage you have on your own car. In most cases, whatever coverage and deductibles you have would apply when you rent a car for recreation. (Business use of a rental car may be excluded.) Ask if you will be covered if your rental car is stolen or damaged in an accident. Ask if your company pays for administrative fees, loss of use ("down time") or towing charges. Some companies may provide an insurance rider to cover some of these costs, which would make it less expensive than purchasing coverage through the rental car company.
- Ask your credit card company if your card has "loss damage waiver" or LDW coverage. (Sometimes this is called "collision damage waiver" or CDW.) If not, get a card that does provide this coverage, especially if you rent cars more than a couple times per year. The terms of rental car coverage offered by credit card companies varies by issuer. Credit card LDW protection typically covers damage to or loss of the rented vehicle (not other cars, personal belongings or damage to other people's property.) It is highly unlikely that your credit card offers personal liability coverage for bodily injury or death claims. If you have had your credit card for some time, your card issuer may have cut its insurance benefits. You may think you have more coverage than you actually do. Ask your card company to explain in detail what is covered.
Your personal auto policy probably does not provide liability coverage for you when you rent a car overseas. It is crucial to know what coverage you need and to get it before you drive in a foreign country. For instance, many U.S. car rental firms terminate ordinary coverage if you cross the border into Mexico from the U.S. To drive in Mexico, you need civil liability insurance to provide coverage in case you cause injury or damage to property while driving.
In Canada, you must present a certificate of liability insurance from your U.S. carrier. If you don't have this document at the counter, you will not be allowed to rent a car until you pay for liability coverage.
Some countries also require you to provide an international driver's license, which you can get at the Automobile Association of America (AAA).
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