Okay....everyone knows that the car rental agencies are in the business to make a buck. But when they offer you the car rental insurance packages, you always get the guilty sob story of how you will be responsible for all damage to the car and to the other person and property. The big question is..do you need to pay or not?
If you haven't already, check out my entry on Insurance Coverages by state. this will give you an idea of what kinds of coverages are free and clear (if any) without any additional cash.
i wrote this blog entry a few years ago, but much of it remains current.
It depends on your point of view and your individual situation. I will break it down as easy as I can.
LDW- Loss Damage Waiver. Forgives any damage to the rental car only
ALI- Additional Liability insurance. Actual insurance policy against damage to other people's person and property.
PEP- Personal effects protection. Really cheap and a great idea in crime rich areas.
PAI- Personal accident insurance. If you or your traveling party gets hurt, you have medical.
From the Manager's perspective, its always adviseable to take the insurance coverage, because its not insurance, its loss damage waiver. If you are in a single car accident, meaning you hit a rock in the road, or a deer, or your tire blows out and your car rolls, the car damage is 100% forgiven, it never hits your insurance and your insurance will not go up because its not reported to your insurance. The key word is "forgiven."
If you have the liability protection add on, then if you hit someone elses car, the liability coverage will kick in, and it never hits your insurance coverage. Your insurance company can raise your rates, but it cannot raise them too much because their rate adjustments are based upon damage value paid out. Avis does not report this information to third party requests, only that an accident occurred and it was paid out.
If you choose to use your credit card insurance (standard) then you MUST report to your personal insurance company before your credit card will pay out, so if you have insurance, its likely that your credit card will only pay the deductible. (crappy)! and then your insurance rates will go up if your at fault.
if you choose some sort of extended insurance coverage from your credit card company, you still must report the accident to your insurance company before they will pay out, but it would be listed much as the above liability from avis.
As an insider who has rented out more cars than you will ever SEE, consider partial damage waiver. Some states allow for the first 3000 dollars coverage for a lesser price. Also consider each state independently. A quick look in the computer shows some rates in some states as high as 22.99 per day and as low as 10.95 per day for the same car. Ten bucks a day to ensure all the small dings dont hit your insurance and raise your rates is a pretty good thing.
Some states also require no fault or basic coverage by law. If thats the case you have the state required minimums liability coverage included in the rental price, but no loss damage waiver. (see previous blog post).
also, look into the insurance coverage at the kiosks in the airport. those flight insurance coverages almost always have a LDW and liability component available and its often cheaper than the rental agency prices.
Finally, not all private insurance policies will protect you in a rental car. check with your company. Even if they protect your rental car, they may only protect your car if you have the collision coverage on your policy. No collision, no ldw coverage for your rental car. Some insurance companies by agreement/legal action cannot operate in certain states. So check your policy. Some car insurance companies had their licenses yanked for non payment and other things.
so if it were me,
if i had a car worth 25k at home and its fully insured, i would not buy insurance at the car rental location
if I had a car worth 12k at home and its fully insured, i might consider partial coverage, or coverage from an outside vendor.
if I had a car worth nothing, and had only liability coverage, i would look at each state that I fly to and decide if I needed coverage based upon the price. I would definitely depend upon my credit card insurance.
if i had no car at home, id use credit card insurance solely.
but thats me. everyone needs to look at their own situation, assets they want to protect.
after all, being sued for 100,000 usually means nothing if you have no assets at home for them to seize.
www.carrentalinsider.com
