Car Rental Insurance - Yes or No?
Posted: Sunday, March 15, 2009
by Richard Edmunds
Car Rental Guide
The moment you walk into the car rental company, you are flooded with several options after having decided to rent a car. This leads many of us to stop and think, "Do we need to accept all of the various types of car rental insurance?" Well, you do not have to. Car rental insurance, for example, is optional in almost every state of the country barring Texas. There are, however, some points to be kept in mind.
1. Damage caused to the car rented: Loss Damage Waiver, known in short as LDW, is the most common form of car rental insurance among most big rental agencies. This covers just the car in case it is damaged by the renter, irrespective of the manner in which the damage is caused. This means that if, for example, the car collides into a tree then the damages caused to the car will be covered. In case the car collides into another car, just the rental car gets covered, not the other one. That comes under liability coverage to be discussed below.
Smaller car rental agencies offer something called Loss Damage Insurance, known as LDI for short. This works on the same lines as LDW, the difference is just that the fees are collected by a third party.
Of the two, LDW is a preferable option. Under LDW, even complete, irreparable damage to the car is "forgiven." The reason behind this is that most agencies renting out cars are themselves the insurers for their cars. They pay out the car rental insurance every month into a fund that is used to tide over losses.
LDW can be either complete or partial. Full Waiver, albeit with some variations, is what can be found on offers everywhere across America. In the case of Partial Waiver, the insurance coverage is limited to a certain dollar amount.
2. Covering another's property and person: Under this Additional Liability insurance, also known as ALI or Supplemental Liability Insurance (LIS or SLI), the coverage is fixed as a certain dollar value (usually up to 1 million dollars). Under this, any damages caused to other people or to their property, either by you or by a driver authorized to drive you, are covered.
3. Personal Effects: The most economical (and, as per me, crucial) cover is the Personal Effects Protection, known in short as PEP. This is also popular as Personal effects coverage or PEC. Losses suffered by you as well as your party, due to burglary or accidental damage, are covered here, limited to a predetermined dollar amount. The hotel room in which you stay in as well as all places you go to during travel are included under the insurance. The cost of the insurance is normally not even 2 dollars a day. What mostly happens here is that excluding a certain deductible amount, everything else is paid in cash, up to the policy limit, which is less than $2000 in most cases.
4. Personal Accident protection: This is another policy available at an economical fee of somewhere up to just five dollars to be paid per day. This provides insurance up to an amount of 100,000 dollars to the driver and more often than not, the complete travel entourage, in case of accidents while traveling by car. In addition, the driver whose name appears as the renter on the contract is usually covered every moment of the trip. For those who do not possess travel insurance or haven't gone in for personal medical insurance, this policy will prove very useful as it provides complete coverage during your travel. All those who do not live in the United States or those who travel abroad without personal travel insurance will do well to give this protection serious consideration.
Richard Edmunds worked as a manager of a big name Car Rental Agency for the past 20 years before retiring. He now spends his time writing car rental articles for you about such topics as Car Rental Insurance and other rental car tactics.
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