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Rental Car Insurance Explained
Reading the technical manuals that accompany rental car insurance guides can be a challenging task – a task we can be tempted to give up on. But a few details can be understood by even the most infrequent of travelers.
The Hard to Read Version of Rental Car Insurance Contracts
The typical legal document sounds like it is written in code, but if you do some research ahead of time you should be fine.
Don’t Despair! The Easy to Understand Version of the Rental Car Insurance Agreement
Few of us understand or have the patience or time to understand rental car insurance protocol that is written with lawyers in mind, so why not save yourself the frustration and read the following (but remember that you should check your own automotive insurance policy to see if it provides similar coverage – then you can sign the coinciding waiver at the rental company if you are covered):
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Does your personal policy cover the vehicle if it is damaged?
If so, you can sign the Collision Damage Waiver (CDW), exempting the rental company for collision responsibility.
Does your personal policy cover the vehicle if it is lost or stolen?
If so, you can sign the Loss Damage Waiver (LDW), exempting the rental company for loss damages.
Does your personal policy cover you and/or other persons who might incur physical—bodily--damages?
If so, you can sign the Physical Damage Waiver (PDW), releasing the rental company of liability.
Being able to sign off on the above three waivers will save you the extra expense of purchasing the coverage types through the rental company.
Do you carry personal liability insurance that is sufficient? If so, you can waive the extra coverage offered by a car rental service. But you may want to invest in the added protection, buying what is called the Liability Insurance Supplement (LIS).
Does your policy cover the one time payment designed to cover you or another in case of accidental death? Usually it does, but if not, you should purchase this Personal Accident Insurance (PAI) from the car rental company.
Does your personal or business policy include coverage of any items lost or stolen from the car? Most policies don’t go this far, so you will want to decide if purchasing this Personal Effects Coverage (PEC) is important and/or necessary.
In addition to having your own automotive insurance coverage, sometimes if you pay with certain credit cards you can cover some of the damage to or theft from the rental car. Check to see if you can’t sign off on the CDW (Collision Damage Waiver) or the LDW (Loss Damage Waiver) using your particular credit card.
You should keep in mind that there are contingencies when waiving, and with coverage of rental cars, just as there are with any kind of insurance. For example:
- Credit card companies don’t cover insurance for luxury cars, exotic cars, or sport utility vehicles.
- No insurance company will pay for damages or losses if the person whose name is on the rental agreement is not the one driving the car.
- No insurance will cover what they deem recklessness or neglect of the car, the laws, and/or the policies.
Now you know—in plain English—what steps and details are involved in rental car insurance.
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