Orlando Harmon
Does auto insurance with rental coverage include the damage waiver?
When you rent a car, you will be asked if you want to buy optional coverage called a collision damage waiver (CDW). This insurance covers damage to the rental car. It can be a pricey proposition, but it may be worth buying, depending on your own car insurance and credit card coverage.
If you have auto insurance with rental coverage, you may already be covered for collision damage to a rental car. However, it's important to check with your insurance provider, as coverage may vary. In most cases, your auto insurance policy will provide equivalent coverage for a rental car as long as you use it for personal purposes.
Your deductible, or the amount subtracted from the claim payout, will still apply if you file a claim with your insurer. Additionally, filing a claim on your auto insurance policy could raise your premium. If you don't have comprehensive or collision coverage, or you're renting a luxury vehicle that your insurer won't cover, you may need to purchase additional coverage.
Credit cards often provide rental car insurance coverage as well, as long as you use the card to pay for the rental. This coverage is typically secondary, meaning your auto insurance policy will pay out first. However, it can be useful if you need to be reimbursed for your deductible or other costs not covered by your auto insurance.
In summary, while auto insurance with rental coverage may include collision damage protection, it's important to check with your insurance provider to understand the specific details of your policy. Additionally, credit card coverage can be a useful supplement to your auto insurance in case of any gaps in coverage.
| Characteristics | Values |
|---|---|
| Does auto insurance with rental coverage include the damage waiver? | In most cases, your auto insurance policy will provide equivalent coverage for a rental car as long as you use it for personal purposes. |
| What is the collision damage waiver? | The collision damage waiver or loss damage waiver offered by the rental car company means that if your rental car is damaged or stolen, you don’t have to pay to repair or replace it. |
| Do you need a collision damage waiver? | It’s wise to purchase this type of rental car insurance. While your regular car insurance policy may include collision coverage for rental cars, it most likely includes a deductible and may not pay for all the rental car company's charges, such as loss of use. |
| What is covered in the collision damage waiver? | The rental car company gives up the right to charge you for damages to the rental car. But there are usually a few exceptions—for instance, for tire and side mirror damage, or for “gross negligence,” meaning you were speeding, racing or driving while intoxicated. |
| How much does a collision damage waiver cost? | The cost of a CDW is generally about $30 per day. That means it can hike your rental cost by around $200 a week. |
| What are the alternatives to a collision damage waiver? | You can use your existing car insurance, credit card benefits, or third-party car rental insurance. |
What You'll Learn
Collision damage waiver
A Collision Damage Waiver (CDW) is an optional extra offered by car rental agencies to help pay for damage to a rented car. It is sometimes called a Loss Damage Waiver (LDW) or Physical Damage Waiver. The cost of a CDW depends on factors such as the type of car and where it will be driven.
A CDW is not necessary if you have adequate coverage through another source, such as your car insurance or credit card. If you have collision auto insurance on your personal vehicle, you will likely have similar coverage when renting a car. However, your car insurance may not cover the loss of use when the rental car is being repaired, towing fees, or the rental company's administrative expenses.
If you don't have car insurance or a credit card with rental car coverage, a CDW could be a good idea. It can provide peace of mind and protect you from having to pay a high deductible on your personal car insurance policy.
A CDW covers losses from any damage to a rental car while it is in your possession, including weather-related damage, damage while the car is parked, and accident-related towing. It also typically covers the rental agency's administrative fees and daily lost revenue due to the vehicle being out of rotation (loss of use). However, it is important to note that a CDW does not cover damage to other cars, bodily injury to others or yourself, injuries to your passengers, or theft or damage to your personal items in the vehicle.
In summary, a Collision Damage Waiver can provide valuable protection for rental cars, but it is important to understand what is and isn't covered and whether you already have adequate coverage through other sources before deciding if you need to purchase it.
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Loss damage waiver
A loss damage waiver (LDW) is an agreement with an auto rental company that releases the renter from liability for physical damage to the vehicle in exchange for a fee. It is not insurance but a contractual obligation subject to many restrictions. The rental agreement typically stipulates that purchasing the damage waiver is not mandatory.
In some contracts, the renter may be able to choose either a full damage waiver or one that holds the renter responsible for damage only over a certain specified amount, similar to an inverse deductible.
If you have comprehensive and collision coverage on your own policy, it generally will extend to a rental car as long as you’re renting within the U.S. or Canada. However, you will still be responsible for your deductible, and filing a claim on your auto insurance policy could raise your premium.
If you don’t have comprehensive and collision on your regular policy, or you’re renting in a location where this coverage isn’t in effect, you’d have to pay for the damage unless you buy the LDW.
Credit cards often provide rental car insurance coverage, assuming you used the card to pay for the rental and the rental is in your name. They can be a particularly useful option overseas in places where your personal auto insurance won’t cover you.
If you’re planning on credit card coverage, call your credit card issuer to confirm the details.
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Rental car insurance vs. personal auto insurance
In most cases, your auto insurance policy will provide equivalent coverage for a rental car as long as you use it for personal purposes. However, there are some differences between rental car insurance and personal auto insurance that you should be aware of.
Rental car insurance
Rental car insurance is obtained through an add-on to a travel insurance policy or directly from the rental car company. It provides coverage while driving a rental car, and there are typically four types of rental car insurance options:
- Loss damage waiver: This releases you from responsibility for damage that occurs to the rental car, including theft and vandalism.
- Liability coverage: This covers other drivers' property damage and injuries resulting from an accident you cause.
- Personal accident insurance: This covers medical costs for you and your passengers if you're involved in an accident.
- Personal effects coverage: This covers your personal items if they're stolen from a rental car.
Rental car insurance is typically expensive, ranging from $31 to $60 per day. It may be worthwhile if you want peace of mind and don't want to risk paying a deductible or a higher rate on your auto insurance if you damage a rental car.
Personal auto insurance
Your personal auto insurance policy will usually cover rental cars with the same coverage limits and deductibles. If you have comprehensive and collision coverage on your auto policy, it will generally extend to a rental car as long as you're renting within the US or Canada. However, you will still be responsible for your deductible, and filing a claim on your auto insurance policy could raise your premium.
If you don't have comprehensive and collision coverage on your auto policy, you may need to purchase additional insurance from the rental car company or through a third-party insurer.
In summary, rental car insurance can provide valuable protection in case of an accident or damage to the rental vehicle. However, it is often expensive and may duplicate coverage already provided by your personal auto insurance policy. It's important to review your personal auto insurance policy and understand what is and isn't covered before deciding whether to purchase rental car insurance.
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Credit card coverage
Most major credit card networks, including Visa, Mastercard, and American Express, offer some form of rental car coverage for cards on their networks. However, the specific coverage may vary depending on the card issuer and the card type. It's important to carefully review the terms and conditions of your credit card to understand the extent of the rental car coverage.
To ensure that your credit card's rental car coverage applies, there are a few requirements that typically need to be met:
- You must pay for the rental car using the eligible credit card.
- The rental car must be in your name and you must be the primary renter.
- You should decline the rental car company's collision damage waiver (CDW) or loss damage waiver (LDW).
It's worth noting that credit card coverage usually applies to collision damage waivers or loss damage waivers, which cover damage to the rental vehicle in case of an accident or theft. However, it typically does not include liability coverage for injuries to others or damage to their property. Additionally, personal effects coverage for stolen items from the rental car may be excluded.
When considering credit card coverage for rental cars, it's important to understand the limitations. Credit card coverage usually has exclusions for certain types of vehicles, such as luxury or exotic cars, motorcycles, trucks, and large vans. The coverage period may also be limited, typically ranging from 15 to 31 consecutive days, depending on the card and the location of the rental.
Before relying on your credit card's rental car coverage, it's recommended to contact your credit card company and carefully review the benefits and exclusions to ensure you have the protection you need.
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Standalone rental car insurance
Firstly, standalone rental car insurance can provide primary coverage, meaning it pays out before your regular auto insurance policy. This can be advantageous as it allows you to avoid making a claim with your auto insurer and potentially facing higher rates. Additionally, standalone rental car insurance can offer coverage for various expenses, such as collision damage, loss, and theft. Some policies also include emergency assistance and cover personal belongings inside the rental car.
When considering standalone rental car insurance, it's important to carefully review the terms and conditions. Coverage limits, exclusions, and requirements can vary across insurers. For example, certain types of vehicles may be excluded, and coverage may be restricted to specific countries or regions. It's also essential to understand the claims process and have clarity on the documents required to file a claim.
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Frequently asked questions
It depends on your insurance provider and the type of coverage you have. In most cases, your auto insurance policy will provide equivalent coverage for a rental car as long as you use it for personal purposes. However, it's important to check with your insurance provider to confirm the details of your specific policy.
If you don't have auto insurance, you can purchase a damage waiver, also known as a collision damage waiver (CDW) or loss damage waiver (LDW), from the rental car company. This waiver releases you from financial responsibility if the rental car is damaged or stolen. The cost of a CDW is generally about $30 per day, but it can vary depending on the company and the vehicle.
Yes, there are a few other options for rental car coverage. You can use a credit card that offers rental car insurance, purchase a standalone rental car insurance policy, or buy rental car damage coverage from a travel insurance company. Each option has its own benefits and limitations, so be sure to do your research and choose the one that best suits your needs.
