Most drivers will rent a vehicle at some point in their lives, whether to drive it on vacation, use during a business trip, or temporarily replace a personal vehicle that is being repaired. When doing so, rental companies often pressure customers into buying a collision damage waiver to serve as a type of rental car insurance. Though beneficial, this coverage can also be expensive.
When you consider that many people already have rental damage protection through a personal line of insurance or the benefits offered by a credit card company, many forego the coverage offered at the rental counter. However, doing so could prove to be a mistake. Today, we are explaining why purchasing a collision or loss damage waiver might be a good idea – even if you already have coverage.
Deductibles
Collision damage waivers typically include no shared financial responsibility. If your rental vehicle becomes damaged, stolen, or destroyed under covered circumstances, you get to turn in the keys and walk away without paying a dime. Using a personal line of insurance to cover rental car damages, however, might cost you hundreds of dollars for a deductible or self-insured retention (SIR).
Loss Valuation Disputes
The rental agreement you sign probably states that you will reimburse the rental company for the ‘full value’ of the vehicle you damage if you do not have a loss damage waiver. You assume that responsibility fully even if you have personal insurance protection. If your insurer is only willing to pay for the actual cash value of the vehicle but the rental company is billing you for the cost of a replacement, you could get stuck making up the difference. With a loss damage waiver, you are not responsible for any loss, regardless of how much it costs.
Coverage Disputes
Your personal car insurance may cover a rental vehicle, but the type of car could matter to your insurer. Imagine filing a claim for damages to your rental only to find out that your policy only covers certain cars – not a truck or motorcycle. What if you rent a car on a business trip and use it for business purposes instead of personal use? Would your personal car insurance still foot the bill for damages? Who’s insurance would pay a claim for a rental car in your name that is driven by another person in the car? Collision damage waivers are created specifically for the type of vehicle you are renting, the drivers authorized on the account, and the purposes it will be used for. You can easily purchase one with a clear understanding of what is covered and what is excluded from the waiver.
Claims
You have car insurance to take care of your financial losses when you need it most. Depending on your insurer, filing a claim could affect your qualification for special discounts. If you rely on your personal insurance to pay for rental car damages, you could see your premiums rise in the future. If you already had recent claims on your record, an additional claim might be enough to get you dropped from coverage when it’s time to renew your policy.
As you can see, there are a number of things that you should consider when renting a car. At Carrigan Insurance we believe that the reasons to purchase the damage collision waiver outweigh the reasons not to.
If you have questions about rental car insurance or other coverage, feel free to give us a call, we’d be glad to help.
