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Rental Car Insurance 101

Tis the season for traveling! More and more people are traveling for the holidays and that typically involves renting a car. Unfortunately all of these extra cars on the road lead to increased accidents, and insurance policies can be drastically different when you switch from your own vehicle to a temporary rental. Here’s a quick primer for what’s really going on when the person at the rental counter asks you whether or not you want to purchase the extra insurance.

Accident-Related Problems and Corresponding Insurance Types:

  • If Your Rental is Damaged or Stolen: Collision Damage Waiver (CDW)
    • Also called a Loss Damage Waiver (LDW), this covers you if the rental were to be damaged or stolen. If you have a comprehensive policy on your own vehicle then you may already be covered under this insurance, but it’s a good idea to double check. If you do not have collision coverage on your vehicle this could definitely save you some serious money if your day on the road doesn’t go according to plan.
  • If You Are Found At Fault For Damages: Liability Insurance
    • Liability Insurance covers you for any damage that you happen to cause, for example if you were to accidentally rear end another car. Liability insurance is often included in the price of the rental, but typically only goes up to the bare minimum as dictated by the state you’re in. Most states have a bare minimum of $10,000 worth of coverage, but that amount of coverage isn’t going to do a lot of good for you if you accidentally total another car or damage an expensive vehicle. Extra liability coverage is usually offered for a price, but this is another instance where you should look into your own existing policy. Your own liability insurance may already be covering your rental. Regardless of how you arrange it, this could also save you alot of money and headache if you purchase extra coverage.=.
  • If You or a Loved One Needs Medical Care or an Ambulance: Personal Accident Insurance
    • Personal Accident Insurance covers you for the costs of ambulances and medical care if they are needed. You may already have this covered in your personal auto insurance or health insurance plan. Check your policies, and consider purchasing this insurance from the rental company if you aren’t covered by your own plans. Hospital bills add up fast and this type of coverage can help you soften the blow after an accident.
  • If Your Personal Items Inside the Rental are Lost or Stolen: Personal Effects Coverage (PEC)
    • Also referred to as a Personal Effects Plan (PEP), this covers the value of items owned by you that were in the rental car and wound up being lost or stolen. This is not covered in most plans but as always, double check your own policies because there’s a chance you have this coverage. This is most likely going to be the least severe loss when it comes to a car accident but if you are traveling with irreplaceable items then this is something you consider.

The big lesson here is to always double check your own policies when you are renting a vehicle. You may already be covered in more ways than you know, which could save you money at the rental counter.  However, if you don’t have the proper coverage and wind up in an accident, it may wind up costing you a good amount of money.

If you or a loved one have been a victim of a car accident or faulty insurance policies, please contact us at Parvey and Cavenago today. Don’t Go It Alone.

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