4 Types of Rental Car Insurance Coverage and Why You Need Them

Source: pixabay.com

Source: pixabay.com

Renting a car comes with some obligations. One of these obligations is obtaining rental car insurance coverage. There are a number of auto insurance products available in the market for rental cars. Before you purchase any of these products, you need to perform due diligence on the pros and cons of each cover offered. Let’s go over some of the rental coverage options available to you and why you might need them.

1. Collision Damage Waiver

This cover is also referred to as Loss Damage Waiver or a Physical Damage Waiver. This policy helps protect you from paying for damages and theft of the automobile. The cover holds only if you do not drive carelessly or allow the car to be driven by someone who is not authorized to do so. The Collision Damage Waiver comes as a package along with your primary auto policy. If it does not come as part of the auto insurance, this should be the first cover you purchase as a renter. The fee for this cover is usually $9 per day for cars valued for less than $30,000. For cars valued higher, the price is $12 daily.

2. Supplementary Liability Insurance

This is an insurance policy that covers claims made by 3^rd parties for damage to their property or any injuries they sustain after an accident for which you’re responsible. This is normally included in the basic coverage taken out by the car hire company. In most states, car hire companies are only mandated to provide coverage that is usually below $15000. This may not be sufficient for you. The “top up” (Supplementary Liability Insurance) helps increase coverage to a more comfortable level so that you’re not left exposed if you’re involved in a serious accident.

3. Personal Accident Insurance

This policy provides for ambulance services, medical, and death benefits if you or your passengers are involved in an accident. This is a cover that should be automatically provided by the car rental company as mandated by the law. The cost of this cover is $3, and the payouts are $3,500 for medical cover, $150 for ambulatory services, and $175,000 for the renter in the event of death. Any passenger who dies gets a tenth of this figure.

4. Personal Effects Coverage

This policy covers the theft of property in the automobile, but there’s usually a ceiling on the payout. The minimum cover is $500 with $1,500 being the maximum amount paid out for the loss of personal effects to both the driver and the passengers.  This policy could duplicate cover that you have as a tenant or homeowner. This means that in the event of loss of personal property the personal effect coverage comes into effect once you have exhausted your homeowner policy. It will top up for the remainder of the losses.

Next time you’re travelling and need a rental car, make sure to find out the rental car insurance coverage options provided in the package. You also need to go a step further and take out any additional coverage you might need. You can never be too safe.