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There are more options for renting a car than ever before-brick-and-mortar, peer-to-peer and member-based car sharing services. Although this means more choice for tenants, it also creates more questions about insurance coverage. Use these tips to insure yourself when you rent a car and avoid wasting money on double coverage.
If you want to rent a car, depending on your needs and location, there are a number of options – the traditional brick-and-mortar company, the peer-to-peer car service and the car sharing program – each with its own insurance parameters. It is important to understand your existing coverage first and then look at your rental insurance options.
No matter which company or company you rent from, the most important step is to read and understand the rental car or car sharing agreement. Most companies clearly state what is covered and the additional coverage that can be purchased. If you do not understand, the landlord or car rental company rents you through.
If you rent a car, check your own cover first
Before entering into an agreement with any type of rental service, maximize the use of the insurance you are already paying for and avoid paying for double insurance.
If you own or rent a car and / or have homeowners insurance, call your insurer to first check the following:
- How much coverage you currently have your own car ̵
- If you are covered for administrative fees, loss of use or train fees – Check if your insurance company pays for or gives a rider for extra charges.
- If your homeowner or tenant insurance covers the loss of property – These policies (not your car insurance) usually cover your possessions if they are damaged or stolen by your vehicle.
The credit card you use to rent a car can also provide insurance. Although coverage is likely to be limited, it can only cover the deductible if you claim. It is worth knowing what protection it will provide.
- Know that the benefits are different from – Insurance coverage may be dependent on the company or bank issuing the card or even the level of the card. For example, a platinum card can offer more robust coverage than a green card. If you have more than one card, you may want to compare what insurance they offer for tenants.
- Contact the credit card issuer to find out what they cover – If you rely on a credit card for insurance coverage, ask the company or bank that issued the card to send your coverage information in writing.
- Credit card insurance benefits are usually secondary – That is, they will kick in according to your personal insurance policy or insurance offered
Insurance if you rent from a brick car rental
Car rental company is often found in airports, train stations or others places where travelers converge. With these traditional rental companies, you can simply reserve or choose a vehicle from one of the many available on a particular day. The insurance you will be offered is fairly standard (however, as all car insurance, it varies with the state).
Depending on the type of auto and / or homeowner insurance you carry, you may want to consider some of the insurance coverage provided by the rental company. While the car insurance regulations, costs and coverage vary between the state and the insurer, consumers who rent from traditional companies may generally choose between the following covers:
- Loss Damage Waiver (LDW) – Also called collision damage, an LDW is not technically an insurance product. It is designed to alleviate or "refrain" tenants with financial responsibility if the rental car is damaged or stolen. Deviations can also provide coverage for "loss of use" if the car hire company charges for the time a damaged car cannot be used because it is fixed, and towing and administrative fees. LDW may be void if the accident was caused by speed, driving on unpaved roads or driving while intoxicated. However, if you have a comprehensive car insurance, you may already be subject to damage to a rental car.
- Liability Insurance – According to the law, rental companies must provide the state with a minimum amount for liability insurance, often This does not provide enough protection. If you carry your own car insurance and have selected higher liability limits (which is recommended) you will be covered sufficiently. Non-car owners who are ordinary tenants are able to purchase a non-ownership liability policy that can provide the extra responsibility needed.
- Personal accident insurance – This includes drivers and passengers for medical and ambulance bills for injuries caused by a car accident. Whether or not you should consider this depends on your health insurance and personal protection (PIP) provided by your car insurance, which is likely to cover medical expenses.
- Personal Protection Scope -This provides insurance cover for the theft of items from a rental car. Keep this in mind if you do not carry homeowners or tenants insurance to cover this type of loss.
Insurance if you use a car sharing service
With car programs, for a monthly fee or annual membership fee, consumers can pick up a vehicle at a large number of sites for periods ranging from minutes to days. These programs are popular in urban environments where it is expensive or difficult to own a car, but where convenient, a car is available when needed. Tire options vary a lot, but there is usually some insurance.
The insurance offered by these types of companies is not standardized so read the insurance information carefully (it is usually found on the service's website). If you have any questions, call the company's customer service line. And contact your car insurer if you feel you need more information to make a trained insurance coverage decision.
- Car programs (such as ZipCar) usually include insurance costs in the fee. If the car is involved in a collision or is stolen, the tenant can be billed for a certain dollar amount specified in the membership agreement. For an additional cost, customers can purchase an "exception" to avoid paying the accident fee.
- Many car sharing programs limit coverage for young drivers to the lowest governmental obligation Tenants under the age of 21 should read the insurance cover carefully. If it is not enough for their needs, they can investigate whether their parent's car insurance would cover them for the difference, or buy their own non-ownership policies.
Insurance if you rent from a peer-to-peer service
Peer-to-peer car rental network allows consumers to hire personally owned cars from others. The insurance coverage varies greatly depending on location and service.
- Peer-to-peer rental services (such as Turo) may offer a number of insurance options and in some circumstances the driver may refuse coverage.
Next Step: When considering these options for your rental car, it helps to get a general understanding of your car insurance.