Coverages & Waivers : Decline or Accept?

When one gets to the car rental counter, many renters are unsure about what to do when it comes to accepting or declining an rental agency's coverages and waivers. This indecision usually results from not knowing what their personal or business car insurance covers while renting a vehicle. In addition, some credit cards cover damages to many basic types of rental cars. It's a good idea to check into your existing coverages before your trip.

The fact is, millions of renters don't need to pay for CDW. The rental agent doesn't know anymore about your credit card coverage or personal auto coverage than you do if you don't check your policy. All they know is that they can make more money off a uninformed renter.

Know your coverage before you leave

To assess your own status, here's a rundown of the steps you should take:

Check your personal auto policy

If you own a car, talk to your insurance agent. The same coverage and deductibles you carry on your car will apply in most cases to a vehicle you rent for pleasure. But be careful: If your policy provides skimpy coverage, you may need to compute the value of the loss or damage of a brand new vehicle and decide if you need to supplement it.

Credit Card Coverage

Besides your personal car insurance, some charge cards will cover damage or theft to your rental car. While this may replace the need for CDW (Collision Damage Waiver) and LDW (Loss Damage Waiver) offered at the car rental counter, check with your credit card company to see what kind of vehicles are covered and it's very important that you inquire about exclusions because some exotic or expensive vehicles such as sports cars, luxury cars, SUVs, vans and motorcycles may not be covered by major credit cards and vehicles rented outside the US may not be covered, either.

Other things that might not be covered are rentals for more than a month, not reporting your accident within 20 days of the incident, losses from leaving the car running unattended and travelling in some countries.

Check your company's travel policy

If you're on company business, full coverage is probably provided.

In some european countries the mandatory insurance is more than the car rental; so you are better of renting a car in a neighbouring country and then drive down and it often happens if you want to rent from Italy.

There are other factors that may influence you to buy insurance through a car rental company or travel insurance provider. These include driving under unfamiliar circumstances or driving in another country or you may want to avoid the hassles of dealing with repair bills and deductibles.

Types of Coverages Agencies Offer

CDW (collision damage waiver) and LDW (loss damage waiver)
This relieves you of financial responsibility for a rental vehicle damaged by an accident, vandalism or theft. It usually costs between $9 and $20 per day.

SLI (supplemental liability insurance)
This provides excess liability coverage up to $1 million. If you do not already have personal liability coverage you should purchase the rental agency's. It usually costs between $7 and $9 per day.

PAI (personal accident insurance)
This provides a one time payment for you or a passenger in case of death or maiming from a car accident. This is generally covered under your auto or health policies. It's not necessary for most renters already covered by personal health policies or travel policies. It usually costs between $3 and $5 per day.

PEC (personal effects coverage)
This provides coverage for theft of or damage to personal items inside the rental car. Opting for this coverage is obviously something you have to decide for yourself since your existing coverage probably doesn't include this coverage. It usually costs between $2 and $5 per day.

Although many of these except PEC may be covered with your existing personal car insurance policy, its a good idea to check your insurance coverage with your agent first.

Rental companies make these options even more confusing by combining two or more into insurance packages. Each product should be evaluated separately. First determine if you have a need for the service, and then verify if you are not already covered.