We’ll start with a hard truth – if you don’t fully know what your auto insurance covers and you go to rent a car, there is a high chance that you will end up paying a lot more than you should. This is not just for money but also in terms of other non-money costs. If you don’t have car insurance at all then the good news is that these rental companies also offer insurance policies, and if you know how to evaluate the ups and downs of those policies, then you are good to go. Even if you don’t, there is no need to worry. We are here to help you with just that. Read on and insure yourself against any such losses. Let’s discuss the risks first and then we will move on to solutions and opportunities. But before that a quick trip to introduce the rental car auto insurance.
Car rental companies in the United States, like most countries, are legally required to offer liability insurance. In the US the insurance amounts and coverage ranges a lot from being the minimum legal requirements to include multiple contingencies and damage repairs. The crux of the concept is that no matter how high your insurance it, that does not completely insulate you from the risks. Usually those who rent cars steer clear of the insurance packages offered by the car rentals because of the sole reason that they are expensive. But that does not make those any less useful an option. It remains an individual choice at the end of the day. Let’s go over the rental car auto insurance and other options available for you.
Option 1: Buy the policy
Don’t think you’re up against the rental company. The fact of the matter is that when you rent a car, the rental company makes you choose one of the two options – buy the insurance from them or they will squeeze you for every single speck of damage to the car. The deal you get from the rental companies is usually known as loss damage waiver or car damage waiver. If you pay for this waiver then the rental company cannot charge you for any damages, except perhaps major mishaps like damaged tires. Some companies give you a completely free pass once you have taken their policy. So in theory, getting one of these insurances from the rental companies is the easiest solution. It is not the cheapest though. Your total freedom from liability comes at a ridiculously high price. The damages are much less costlier than the overall money generated from such claims which means that the sum game is in favor of the rental companies even if you think it would make drivers careless. The truth is that responsible drivers take care of the rented cars more than their own in either case. The monetary decision holds pros and cons only for you so make the choice accordingly.
Option 2: pay for any damages if and when they occur
This is where you get advantages from your previous insurances if you have any. A simple credit card with built in insurance also comes in handy here. The individual costs you will incur depend on the type and limit of insurance you have. However, this is one of those chance moments where if you return the car unharmed you don’t spend a dime and if you damage the car you pay for everything and then some. However, as a suggestion this might not be the best bet for you because accidents are not exactly something you can control and even if you have amazing insurance terms you will be signing a massive credit card bill and have to wait for a long time to get it back, if you get it back that is.
Remember one catch while choosing between the above two options: If you don’t have the rental company’s insurance, they are going to charge you not only for repairing the damages but also additional charges. These might include lost service charges meaning the rental service for the particular car suspended due to repair timings; any decrease in the value of the car because of scratches, dents etc.; administrative fees as well as any towing or transportation charges if you couldn’t bring the car to their service area yourself.
Option 3: Pay through a third-party car rental insurance
This is a combination of the benefits and costs of the two options mentioned above. There is a range of choices available for you to choose from per day payments to lump-sum amounts. The costs of such a policy are lower than those of rental companies’ and also help you avoid the hefty credit card payments you have to make with personal insurances. This third option also comes with the similar contingencies and coverage as credit cards, which means you don’t have to fill in a plethora of forms for the claims.
Now that you know your options, let’s briefly consider other factors that might influence your decisions. Sometimes you can get your rental car booked as part of a bigger package. For instance, if you are travelling somewhere, there are options available for rental cars along with your flight and hotel, among other things. Travel insurance might also include something for your rental cars so make sure to check the available options. Sometimes rental car companies need their cars transferred from one location to another and if you can strike up such an option, you can save massively on your overall package even with the car rental auto insurance purchase. Finally, if you are a frequent user of car rental services, you might consider joining a loyalty program, which brings you discounts and also lets you gain points that you can use to gain further cost advantages.