With a big line behind you, you’re standing at the rental car counter. You received a terrific deal on a car for the week, and you’re all set to go on a family vacation.
Then you’re handed a clipboard containing an intimidating rental car contract with a bewildering array of insurance alternatives. Suddenly, you wish you’d spent more time studying rental vehicle insurance instead of packing.
Because most of us don’t deal with rental car insurance on a daily basis, it’s easy to become perplexed or overwhelmed when faced with a variety of options. Learn the basics of rental car insurance and whether or not you require additional coverage beyond your existing auto policy.
Is It Necessary to Insure Your Rental Car?
“Do I need rental car insurance coverage?” is the most frequently asked question when renting a car for domestic travel. The answer is that it is debatable. You want to be sure you and your rental vehicle are protected, but you also don’t want to pay for extra insurance that may quadruple the cost of your rental.
How Do You Know If You Need Rental Car Insurance?
The first step is to look over your auto insurance policy or call your provider to verify if rental car coverage is already included in your own auto insurance policy. If you have comprehensive and liability insurance on your own automobile, it is likely that your coverage will apply to your rental car in the Philippines.
If you rent a car in the Philippines that is equal in value to your own, your motor car insurance coverage will most likely be sufficient. However, if you’re heading to the beach in a snazzy set of wheels like a Corvette Stingray and leaving your 2008 Subaru Forester at home, acquiring the rental company’s additional auto insurance coverage may be a good idea.
You should also confirm that the credit card you’ll be using for your car rental is valid with the credit card company. If your personal auto policy has any gaps in coverage, your credit card provider may be able to provide supplemental coverage.
What Does a Standard Rental Car Insurance Policy Cover?
The majority of rental companies offer a limited, predictable range of rental vehicle insurance options. Before you walk up to the counter, familiarize yourself with your rental company’s policies.
Check your personal auto insurance policy to see whether you’re already adequately insured and can decline the rental company’s offered coverage.
Rental car insurance is usually broken out into the following coverages:
- Liability coverage
- Personal accident insurance
- Collision Damage Waiver (CDW)/Loss Damage Waiver
- Personal Effects Coverage
When is it a good idea to get rental car insurance?
If you don’t have insurance already, you’ll need to get liability insurance from the rental business before hitting the road. Because liability insurance for all drivers is mandated by law in most states, this is the case.
Collision Damage Waiver
If the car’s bodywork is damaged, the Collision Damage Waiver protects you. The most you’d have to pay is a maximum known as the ‘excess’ (or ‘deductible’ in the Philippines).
Collision Damage Waiver, on the other hand, does not cover every portion of the vehicle. It only covers the car’s bodywork, so if the windows, wheels, or inside are damaged, you’ll be responsible for the full cost of repairs (unless you have additional cover).
Any insurance coverage provided by your rental car will only be effective if you follow the terms of the rental agreement, which you will sign when you pick up the vehicle. Your Collision Damage Waiver will not protect you if the bodywork is damaged while you were illegally parked, speeding, or driving while intoxicated, for example, and you will be responsible for the entire cost.
The term ‘Loss Damage Waiver’ may appear on occasion. Collision Damage Waiver and Theft Protection are combined in this policy.
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If the rental automobile is stolen, you will not be required to pay for a new vehicle. It also covers damage to the vehicle if it is attempted to be stolen.
The most you’d have to pay, just like with Collision Damage Waiver, is the Theft Protection policy’s excess.
If you follow the requirements of the rental agreement, theft protection will work. If someone steals your car because you left the keys in the ignition, or it’s stolen from a country where you weren’t authorized to drive it,
Theft Protection won’t cover you, and you’ll be responsible for the entire amount.
Compulsory Third-Party Liability
This covers you if you injure someone or damage anything with your rented car. It does not cover the rental car.
Third-Party Liability usually has a maximum payout amount, which varies based on where you rent. More information is available in the papers you receive when you pick up your rental car.
Third-Party Liability only works if you follow the rental agreement’s restrictions. Third-Party Liability Insurance will not protect you if you damage someone’s property while driving on an unpaved road, for example, and you will have to pay the owner for the damage.
If any of the following conditions apply, rental insurance’s added protection is worth considering:
- Comprehensive and collision coverage are not included in your existing policy.
- Only commercial auto insurance coverage covers you.
- You don’t want to take the chance of having to pay a large deductible.
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If you plan beforehand, you may enjoy the convenience of a rental car without incurring unexpected costs. Make sure you do your homework and ask lots of questions so you know precisely what you’re getting and paying for with your rental automobile.
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