It is estimated that over 42 million Americans will travel 50 or more miles away from home this Thanksgiving holiday. Since many of these travelers will be renting a car, it is important they understand car rental insurance before they get to the rental car counter in order to avoid costly mistakes.
For many travelers, the decision of whether or not to buy rental car insurance is often made without understanding the consequences. Faced with a number of choices, some renters either purchase all of the coverage or they decline the insurance without knowing if they are covered by other policies. This can result in either wasting money by purchasing unnecessary coverage or having gaps in coverage, making the driver dangerously uninsured.”
Before renting a car, you should consider first calling your protection team at Fox Insurance Agency to establish what insurance coverage you may already have through your auto and/or homeowners/renters/condo policy; and then call the credit card company you will be using to pay for the rental car, as they also may offer some type of insurance benefits, although their coverages can vary widely by company.
Rental car insurance offers four important coverages:
- Loss Damage Waiver (LDW) is also referred to as collision damage waiver, and is not technically an insurance product—it relieves or “waives” renters of financial responsibility if a rental car is damaged or stolen. In most cases, waivers also provide coverage for “loss of use,” in the event the rental car company charges the renter for the time a damaged car cannot be used because it is being repaired. It may also cover towing and administrative fees. Loss damage waivers vary and may cost between $9 and $19 a day.
- Liability Protection provides financial protection from lawsuits in the event you are sued following an accident involving a rental car. While by law, rental companies must provide the state required amount of liability insurance, generally, these amounts are low and do not provide much protection. Furthermore, the company has the right to recoup any monies it pays out from the renter. You should probably only forgo the additional liability protection if you have adequate amounts of liability protection on your own car. If you decide you want the supplemental insurance, it may cost between $7 and $14 a day.
- Personal Accident Insurance will cover you and your passengers for medical and ambulance bills incurred by injuries in a car crash. If you have adequate health insurance or are covered by personal injury protection under your own car insurance, you may not need this additional insurance. It may cost about $1 to $5 a day.
- Personal Effects Coverage provides insurance protection for the theft of items in your car. If you have a homeowners, condo, or renters insurance policy that includes off-premises theft coverage, you are generally covered for theft of your belongings away from home, minus the deductible. As with all the above and other coverages, please check with the Protection Team at Fox Insurance Agency for clarification of coverage. Personal effects coverage may cost between $1 and $4 a day.
From all of us at Fox Insurance Agency, have a safe and Happy Thanksgiving!
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For further questions and assistance, please contact Fox Insurance Agency at 503-277-2300 or click here.
Contributing editor: Insurance Information Institute
