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RENTAL CARS -
Rental Car Insurance (continued)
a. Your own auto insurance policy that you carry on your cars at home may already
provide coverage for damage or theft of the rental vehicle, just like it does for
the vehicles you own. Make sure you check with your insurance company or agent to
determine if this is the case. If you are covered, it generally works like this.
If you carry collision coverage on your own vehicles, your rental car will also
be covered for collision damage, but your deductible will apply. If you have comprehensive
coverage, your rental car will also be covered for non-
b. If you are not covered for rental vehicle damage under your own auto insurance policy, and you rent the vehicle using a credit card that provides vehicle coverage (most national cards like Visa and MasterCard provide this coverage) the credit card company will pay for the cost of any damages or theft of the rental vehicle. And, generally they will pay all the costs (with perhaps a few exceptions), without any deductibles. However, they will not provide any coverage if you purchased the CDW. They will also not cover the damage if the cost of the damage is covered under any other existing policies, such as your own auto policy. But, after your own auto policy covers damages, the credit card company generally will reimburse you for any deductibles charged by your insurance company, and will cover any losses not covered by your insurance company. Check with your credit card company to see if they offer this type of coverage and what it covers.
c. Coverage for damage to the vehicle may also be provided by your employer’s insurance coverage or by some auto clubs, thus eliminating the need for the CDW.
d. Since adequate coverage is often already available from your own auto insurer and/or your credit card company, many people do not buy the Collision Damage Waiver and save a considerable amount of money. But it is important to remember, no matter what kind of coverage you have, always inspect the vehicle thoroughly for damage before you leave the rental car lot, and also make sure everything works on the car. And make sure any prior damage is noted on the rental agreement. Also, when you return the car and the rental company indicates that there is damage, do not hesitate to tell them that you do not feel you are responsible for the damage, if indeed that is the case. Items like windshields sometimes just crack on their own without any known impact, and rental car companies often will not pursue a claim for items like this.
2. Personal Accident Insurance or “PAI.” This insurance, usually less than $5 per day, will generally pay a death benefit and a portion of your medical expenses if you are in an accident. While, if an accident occurs, it’s great to have a lot of coverage, you probably already have this coverage in the form of your own medical insurance and own life insurance. For most people, this is an unnecessary expense.
3. Personal Effects Coverage (“PEC”) or Personal Effects Protection (“PEP”). This coverage generally costs less than $5 per day and covers your luggage for any damage. It may also cover for loss or theft. Deductibles may or may not apply. If you already have homeowner’s protection, this loss is probably already covered, although you may have a deductible. Check with your insurance company.
4. Coverage when you are renting a vehicle out of the country. When you plan on renting or driving a rental car outside the United States (even if the vehicle was rented within the United States), make sure you check to see what coverage for losses applies. Often, your own coverage from your auto policy or health policy may have many exceptions for international coverage. Coverage available from credit cards may also have significant exceptions. Make sure you check. And even if you purchase coverage from the rental car company, make sure it will still be good if you drive in another country (even if they allow you to drive the car in another country). For instance, coverage purchased from a rental company on a car rented in Arizona, may not be in effect if the car is driven in Mexico. Or coverage purchased on a car rented in Germany may not be any good if the car is driven in Poland. Make sure you check so you do not have any surprises.
The rental car business is famous for tacking on extra fees. Before you sign the rental agreement, make sure you understand all charges that will be applied to your rental, as well as all terms and conditions of the rental. And make sure you have all necessary paperwork when you leave the rental counter. Remember, if you have a problem on the road, your rental agreement also serves as your vehicle registration.
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