Why Do Rental Car Companies Offer Insurance
Rental car companies typically offer vehicle insurance via a loss damage waiver or collision damage waiver .
This type of insurance is important because it covers you if your rental car is damaged in a collision, stolen, or vandalized.
With this insurance waiver, the car rental company wont pursue you for repairs and losses.
Does My Credit Card Offer Rental Car Insurance
Many credit card companies offer rental car insurance as one of the benefits for cardholders. However, rental car insurance provided by your credit card company is usually secondary insurance. That means if you get into an accident or the car gets stolen, your auto insurance company will get billed first. If that is the case, your deductible will apply to the claim.
There are some credit card companies that offer primary rental car insurance, although it is less common. Primary insurance does not go through your personal auto insurance, so you do not have to pay a deductible. You can call your credit card company to determine if your card offers rental car insurance and what type of insurance they offer.
Most major credit card companies, like Visa, MasterCard and American Express all offer some form of rental car insurance for their cardholders. To take advantage of the coverage, you usually have to pay for the rental car using the card and rent the car in your name.
Travel Insurance & Car Rental
Getting travel insurance is almost essential for travel to the USA regardless if you are are driving or not. In terms of car rentals though, travel insurance really only comes into play to cover your own personal medical expenses in case of an accident. Still, there are a few other minor covers to check, including:
- Excess coverage on Loss or Damage Waivers . The cover is usually between $3000-$5,000. Note: you will actually have to take out an LDW for this to apply!
- Return of your rental car in cases you are physically unable and
- Personal effects in the vehicle from damage or theft .
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Is Additional Rental Car Insurance Required
Rental car insurance can cost as high as $50 per day depending on the level of coverage selected. If you do not have personal collision coverage or of you do not have your own auto insurance policy, it can be beneficial to purchase the rental policy so long as it doesnt duplicate the protection you already have. In Florida, this is optional rental car coverage.
Do Rental Car Companies Offer Rental Car Insurance
Rental car companies do offer rental car insurance that you can purchase. There are four types of insurance coverage to choose from, including liability coverage, personal accident insurance, personal effects coverage and a loss damage waiver. After receiving a quote from your rental car company, be sure to compare pricing and coverage against other options.
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Alternative #: Use Credit Card Benefits
These days, most credit cards provide free collision coverage for car rentals, provided you use the card to secure the rental. A sample credit card benefits statement describes coverage as:
Physical damage and/or theft of the covered rental vehicle. Valid loss-of-use charges assessed by the rental company while the damaged vehicle is being repaired and is not available for use, as substantiated in the companys fleet utilization log. Reasonable and customary towing charges related to a covered loss to take the vehicle to the nearest qualified repair facility.
Note that this typical Visa cards benefits do not cover diminished value or administrative costs. A few premium credit cards offer primary collision coverage, meaning the card takes full responsibility for the payment. But coverage on most cards is secondary, meaning the card picks up only what you cant first recover from your own insurance. And you still have to pay the rental company up front, then file for reimbursement from your card issuer.
Another gotcha in the above fine print: This card pays for loss of use only if verified by the rental companys log. Unfortunately, some rental companies dont cooperate with credit card issuers in providing this type of documentation in a timely manner.
When Should You Buy Rental Car Insurance
There are certain situations where buying auto insurance from a rental car company may be a wise decision. These situations include:
- You have inadequate or no auto insurance: If you don’t have car insurance or comprehensive and collision coverage or have very high deductibles, it’s a good idea to get LDW from your rental car company. If you don’t have any auto insurance at all, you should also purchase supplemental liability.
- You’re on a business trip: If you’re traveling for both business and pleasure and your employer doesn’t provide rental car insurance, find out from your own auto insurance provider whether your policy includes coverage for rental cars. If you’re renting a vehicle mainly for business, it’s likely that you won’t get any coverage from your personal car insurance policy.
- You’re renting a car abroad: Your auto insurance policy probably won’t provide rental car coverage in most foreign countries. While you may get some protection from your credit card company, make sure the country you’re visiting isn’t specifically excluded.
- You’re concerned about a rental car accident impacting your insurance rates: If you file a claim, your insurance rates are likely to go up. You won’t have to worry about this if you buy insurance from your rental car company.
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Alternative #: Pay With Your Existing Car Insurance
In many cases, if your regular auto insurance covers collision damage to your insured car, it also covers damage to a short-term rental. But this coverage is generally limited to driving in the U.S. and maybe Canada, and wont cover car rentals in Mexico, Europe, or anywhere else. So, before you plan on using your own insurance, check its coverage. If it does cover rentals, you can place a claim on it. Still, you must typically pay your policys deductible, and any claims may cause your rates to go up.
How Does Rental Car Insurance Work In Europe
The good news is that liability insurance is typically included with the price of your car rental in Europe. The bad news is that collision coverage for the rental car itself is not included. When you rent a car in Europe, the company will usually require you to purchase a collision damage waiver . This isnt technically insurance, but an agreement that if the cars damaged, you wont be financially responsible.
CDWs sold by European rental car agencies have a few issues, however:
- Theyre expensive. A CDW in Europe will generally add 30 to 40 percent to the daily rate, or $10 to $30 per day.i
- They dont cover the whole car. These waivers usually exclude your tires, windows, roof, undercarriage, side mirrors and interior. Thats a big chunk of the car!
- They may have big deductibles. You could pay a deductible of $1,000-$2,000, even if the damage was someone elses fault.ii You can avoid this by paying even more per day for a super CDW or extended CDW, which has no deductible.
- Theft insurance may cost even more. An LDW may add an extra $5 to $12 per day.iii
Thats why the Rental Car Damage Protector is a much better option. Its affordable. Its actually insurance . It covers the entire car, bumper to bumper it has zero deductible and it covers theft as well as damage caused by things like fires, storms and vandalism.
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How Does Rental Car Insurance Coverage Work With N26
N26 premium accounts include a wide range of travel and lifestyle packages, such as damage cover for car sharing, e-scooter rental, and e-bike rental. Open a premium account now to access these mobility perks.
With an increasing number of rental companies now accepting debit cards for car rental, sign up to N26 in minutes to get a Mastercard, available with every account.
But Do I Really Need It
No one likes to imagine being in an accident, and its tempting to assume that, as youre a good driver, you wont have one. But its not just your own driving you have to worry about with car hire. According to iCarhireinsurance, 22% of the claims it dealt with in 2017 were for damage that occurred when a vehicle was unattended.
Ben Wooltorton, Chief Operating Officer at iCarhireinsurance explains: Claims for hire cars being written off or stolen are few and far between. Whats really common is low-level damage for example, finding your wing mirror is missing after parking your car outside your hotel in Italy, or damaging your car door by opening it on to a concrete block in a beach car park.
These scenarios are stressful but surely minor damage shouldnt cost much to repair? However, Ben explains: There was a lot in the press about inflated charges from rental companies last year, with some repair bills actually coming in at up to £2,000 for minor damage more than the cost of the customers holiday in the first place. Without excess protection, customers could be out of pocket.
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Our Recommendations For Auto Insurance
At the end of the day, its more economical to get a full coverage car insurance policy from a reputable provider than to pay for rental car insurance regularly. Many of the industrys leading providers like Geico and USAA offer coverage that can apply to rental vehicles when you travel within the U.S. To find coverage that works for you, we recommend comparing car insurance quotes from multiple providers.
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Beware Of This Car Rental Insurance Gotcha In Mexico
Last Updated on June 30, 2021 by Michael
Car rental rates in Mexico can be so low that theyre practically free. Seriously, weve seen weekly rates in the single digits in resort cities like Cancun. But as with everything in life, theres no such thing as a free almuerzo.
But consider the thorny issue of rental car insurance in Mexico. If you travel near the U.S.-Mexico border, you will see signs advertising car insurance for crossing into Mexico. Before you make a decision, know that the differences between car insurance requirements in U.S. and Mexico are significant.
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Does Rental Reimbursement Coverage Pay For Damages In A Rental
Rental reimbursement coverage is entirely different from rental insurance. Rental reimbursement refers to a type of car insurance that is optional. This coverage allows for reimbursement for the cost of renting a car only when your own car is in the shop due to damage from an accident.
Rental reimbursement coverage does not pay for damages resulting from an accident in a rental car.
When you are driving a rental car and you are in an accident, liability insurance can cover the costs of repairs to the car and property, and medical bills for injuries to the other cars occupants, with collision coverage paying for the cost of damages to the rental car. However, you need to ensure your current liability and collision coverages apply to rental cars. If they dont, your next step should be to check to see what your credit card covers .
How To Rent A Car In Mexico
In many ways, renting a car in Mexico is much like in the United States. You need a major credit card, valid drivers license and passport. Drivers under 25 will pay more. Its more expensive to pick up and drop off at an airport. And you should always inspect the rental vehicle car before you drive away, and photograph the condition of the car when you return it.
Youll find a large assortment of rental car companies in Mexico, including most of the major international chains, such as Avis, Alamo, Thrifty and Hertz. There are also plenty of national car companies, which can offer better rates but you may worry that it may be harder to settle a claim if the car is damaged.
If you reserve your car rental online, its a good idea to get a quote in Mexican pesos. If you insist on paying in US greenbacks, the rental car company will convert the dollars to pesos at an unfavorable rate.
Print out your reservation information and present the document at the rental counter when you pick up your car. Confirm that the rate on the reservation and the rate on the rental agreement match.
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Does Your Car Insurance Cover Rental Cars
In general, your individual auto policy will cover your rental car. So most people dont need to buy rental insurance.
But its still a good idea to understand your personal car insurance policy before paying for your rental car. A lot of policies extend coverage to rental cars, so your rental may be covered.
Dont assume though. Check your coverage policy. If your policy doesnt extend collision or comprehensive coverage to your rental, you may have to pay out of pocket if you get into an accident. And no one wants that.
If youre on business, check if your company has rental car insurance. If so, no need to buy rental insurance because youre already covered. If your company doesnt cover it, you might need the rental car insurance. This is because individual policies typically wont cover you if youre renting a vehicle for business purposes.
Renting A Car In Mexico: Everything You Need To Know In 2022
Looking into a Mexico Car Rental?
Youve come to the right place, as I live in Mexico, and Im going to walk you through the process of renting a car in Mexico. By the end of the article, youre going to feel confident about the entire Mexico rental procedure and have 10 useful tips on driving a rental car in Mexico.
I Recommend andUSe Discover cars!
When I rent a car in Mexico, I always use Discover Cars. They work with local Mexican companies and large international companies, so you get the cheapest price. The best part? You can add full coverage Mexican insurance for only about $7USD per day.
If youve been looking for info on renting a car in Mexico, you may have encountered conflicting information. There are official rules for how to rent a car in Mexico and then theres how things play out in the real world. Dont worry: Were going to clear all that up in this article!
You might have also come across people talking about common Mexico car rental scams.
Youre going to find out why this isnt exactly a scam, but that there are hidden fees with renting a car in many countries, Mexico included. However, youre about to learn everything you need to know about Mexico car rentals, so youre not surprised by hidden fees.
renting a car in mexico
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Is There Anything I Need To Be Aware Of With Independent Excess Insurance
Independent policies work on a reimbursement basis. So, if you were to damage your hire car, youd have to pay the rental company the excess fee it charges and then claim this back from your insurance provider with evidence such as your paperwork. This means that youll still need to provide your rental company with a credit card with sufficient funds as a deposit when you pick your hire car up.
Some unscrupulous rental companies may also try to persuade you that your independent policy isnt valid or recognised by it individually. However, as Ben explains: A rental company doesnt need to recognise your insurance as it works as a reimbursement. Were indemnifying the customer, not the rental provider. Plus, excess insurance isnt actually compulsory a customer can choose not to buy it at all.
So, if you are met with this argument at the rental desk, stand your ground. If your rental provider is being particularly difficult and insisting that its policy stipulates that you have to take its waiver out or nothing, Ben suggests challenging the member of staff you are talking to and asking them to put this statement in writing for you or to state this again while you record it on your mobile phone. Youll be surprised how quickly they back down.
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Youll Pay Up Front For All Damage
You can cover your major damage responsibility by relying on your own insurance, a credit card with insurance, or a third-party policy. But in all of those cases you have to pay a damage claim up front, then recover as much as you can by filing a claim afterward. That means signing a credit card bill for hundreds or even thousands of dollars when you return the damaged car, and not knowing if youll get that money back.
Thats why many rental companies wont accept rentals via debit card, or a credit card with a small limit. If you can pay the initial rental fee with a debit card, youll still need to provide a credit card to cover a possible damage claim, which would be filed before you can leave the return counter.
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