Renting a car can be a hectic experience. You’ve had a long flight, you’re eager to get to your appointments or start your vacation, and there’s a long line at the counter. And when you’re ready to head home, returns can be hurried affairs as you try to make your flight.
Sometimes you’ll get the “hard sell” from a rental agent who wants you to purchase additional coverage and services before you sign on the dotted line. One of the hardest sells you’ll encounter is for loss damage waiver (LDW) or collision damage waiver (CDW). That’s because it’s the biggest moneymaker for rental companies, who can charge $10 to $15, or more, per day for this extra coverage against possible damage to the vehicle.
Salespeople will share scary tales about the costly consequences of failing to sign up for this coverage, but remember that personal car insurance usually covers both liability and collision in a rental car. If you’re not sure whether you’re covered, check with your insurer before you travel.
Be sure to find out if the rental company charges ‘loss of use’ fees if you're in an accident—and if your insurance company will cover them. Loss of use fees are when the rental company charges you for the cost of renting the car each day that it’s out of service while being repaired.
“Knowing what kind of insurance you have allows you to say ‘yes’ or ‘no’ with confidence,” says Des Toups, managing editor of insurance.com, an online car insurance comparison service. He recommends taking a few minutes to read the front page of your insurance policy to see if you have collision and comprehensive coverage that extends to rental cars. You can also call your insurance company with questions about what’s covered.
If you don’t want to use your personal auto insurance, or if it’s a business expense that will be reimbursed, then you might consider purchasing the waiver, especially if it’s a short-term rental. Some credit card plans also offer collision insurance on rental cars.
One caveat, Toups says, is that if you own a lower-priced vehicle, and you have an accident in a higher-priced rental model, your insurance may not cover the full cost.
What you need to know before you sign a car rental contract
This primer reviews standard items in a rental car contract and what you should consider when you encounter them. It’s a smart idea to either phone your rental company in advance to discuss or take the time at the counter to go over these individual items.
Need a rental for an upcoming trip? Save money when you reserve a vehicle using one of SEIU Member Benefits’ car rental discounts.