Renting a car becomes
essential at certain points of your life. In order to add mobility and
flexibility, it is essential that you find the right deal where the car rental
is affordable, the mileage restrictions are flexible and most importantly you
are not forced to buy an additional insurance.
There are some
important things that must be considered while renting a car. The first thing
is choosing the right vehicle. You might be tempted to ride a convertible, but
that might not be suitable for you and your trip might become very expensive. A
compact car can be appropriate and help you save money. Once you’ve made up
your mind on which vehicle you would like to hire, you have to go around and
look for car rental agencies that offer affordable rates.
Look for deals
and discounts which will further lower the car rental costs. But beware of rock
bottom prices, they might be traps. Very
low prices indicate there are a lot of hidden costs associated with the car
rental fees. When you’re satisfied with the rates, make sure you read the
terms and conditions very carefully. Car rental agencies have several policies
that can make your trip complicated. Check the early return policies, fuel
policies (whether you have to return the vehicle with a full tank or pay
upfront for the fuel), etc.
One thing that
makes car rental really complicated is car rental insurance. Many car rentalagencies would often persuade people to buy additional insurance so that the
renters are safe from all kinds of mishaps, but is it really needed? What if
you already have car insurance? Do you still need to buy insurance?
People get
confused with such questions and end up doing what the agencies suggest. It is
important to educate yourself about the various kinds of car rental insurances,
the coverage that they provide and most importantly when should you buy
additional insurance while renting a car.
About Car Rental Insurance
The first thing
that you would be asked when you land up at a car rental agency is, whether you
want to buy a car rental insurance. You’ll be offered with many types of
insurances, which might ultimately end up confusing you. Many travellers or car
renters have no idea about car rental insurance and whether they actually need
it or not. This allows the agencies to persuade their clients and make profits.
Car rental has
become complicated than ever, it is essential to be prepared to get the right
deal. Before you get confused and feel timid to answer the staff, here are a
few questions you need to ask yourself. Do you own a car? Have you used a
credit card for renting a car? If the answer to these questions is yes, chances
are you are already having car insurance and you already have the necessary
coverage. Before you leave your home for renting a car, it is important that
you read the car insurance carefully and
look what coverage is available for rented car.
It is better if you
can carry a photocopy of the insurance. When the person at the rental agency
charges you about not have necessary, you can show him the proof. In many
cases, your credit card company would also provide coverage but it is essential
that you read the documents to be sure. It is true that car insurance is
essential whether you are driving your own car or driving a rented car, but
there’s no point to add money to your car rental bill when you already have one
in place.
Even if you find
that you do not have enough coverage, there is no point getting persuaded by
what the rental agency staffs tell you. There are many types of car rental
insurances and you must know which one to buy. Buying all the policies may add
thousands of dollars to your bill, so beware! Before you head towards the car
rental agency, educate yourself about the available options and evaluate which one
would be perfect for you. At times buying the basic CDW (collision damage
waiver) would be enough, so why buy the others?
Things to Know before You Rent a Car
There are many
advantages of renting a car than waiting for public transportation or driving
your own car. By renting a car you can save money and time. You don’t have to
wait in the long queues to ride a public transport vehicle or worry about
damages and maintenance as in case of your own car. While on a vacation, you
can save thousands of dollars that you had to spend on taxis by renting a car. Hiring
a car enables you to stick to your own schedule – so you know when to stop and
when to drive.
Hiring a car also
allows you to ride your favourite car at low costs. You can take advantage of the numerous deals and
discounts that are available on various travel sites and on personal rental
websites. These discounts and coupon codes can bring down the rental fees
considerably, so that you ride in the most cost-effective way. Although there
are numerous benefits, the hidden costs can take a toll on your budget if you
are not aware of them. So it is very important to be prepared before you sign
the contract and drive out the car from the agency.
Here is a list of
few things that needs to be considered to make your travelling smooth and
satisfactory:
·
Use Your Credit
Card to Rent a Car: Using a credit card for hiring a car is a good option,
since most of the car rental agencies will do a credit score check before
offering you a deal. Using the credit card will save you from undergoing a
credit check. Many car rental companies won’t accept prepaid credit cards. One
more benefit of using a credit card is that they might provide insurance
coverage. The first thing that you’ll be asked while renting a car is that
whether you have insurance or not. Buying insurance from the car rental agency
may add hundreds of dollars to your bill per day. Using the credit card may
save you from spending extra. Several credit card agencies provide coverage for
the card holder at no additional cost.
·
Extra Charges for
Young Drivers: If you or any of your family member who is willing to drive
the car below 25 years of age, expect some extra fee to be added to your daily
rental bill. Even if you have a spotless driving history, you will be
considered a liability for the car rental company. While most of the companies
will not allow drivers below the age of 21years, many will allow drivers who
are 25 years old in exchange of a hefty amount. So make sure you consider the
age of the people who are willing to drive the rental car, when determining the
budget.
·
Pay Extra for
Additional Drivers: Even if you and the people expected to drive the car are
above 25 years old, you’ll have to pay an extra fee to register each additional
driver when you rent car. You’ll be asked to declare the number of additional
drivers you need and the fee would be calculated depending on the number you
suggest. So make sure you carefully determine the number of drivers you need.
It is recommended to restrict the number of additional drivers to 2, so that
your rental bill does not go skyrocketing.
·
Avoid Unpaved
Roads: This might sound unimportant, but what if your collision damage waiver
gets void? Yes, most rental companies will penalize you if you drive on unpaved
roads. Ensure you read the contract well before signing. Even if you love
adventures while driving, the cost of paying for the adventure is too much.
Rental car insurance is very expensive so you will not want it to be cancelled.
Driving on unpaved roads is prohibited due to possible damage of the vehicle
and the cost to repair it. You may be required to bear the costs of repairing
the car if any damage is done, due to violation of the car rental agreement.
·
Return the Car
with Full Tank: the rental agency wants you to return the car the way you
drove it off and this is true for the fuel tank as well. Most of the rental
agencies want you to return the car with a full tank and if you forget, you’ll
be charged double the actual gas rates. One option is to pay upfront for a full
tank when you rent a car, but returning the car with an empty tank is ideally
impossible.
·
Rent a Car
Off-Site: Renting at the airport might be expensive. It is natural
that after a tiring journey via flight, you’ll want to board your car as soon as
possible, but if you want to avoid the airport surcharges, you have to rent a
car off-site. There is no way to avoid such fees if you rent from the airport,
since the rental agencies are legally obligated to collect these fees. You can
travel to the downtown area by a shuttle or public transport and hire a car
from there. This will help you save hundreds of dollars.
·
Extra Cost for
Extras: It’s absolutely perfect to rent the extras along with the car, if you
have enough money. Travelling with a baby? Hire a baby seat. Love music? Get a
radio. Want to track your journey? Hire a GPS tracker. Now that you have all
that you need to make your journey comfortable and exciting, you’ll get equally
excited to see the rental bill. Don’t faint if you see a thousand dollar added
to your bill for extras. Yes they are that expensive. There are ways to avoid
these hefty fees. Bring along your baby seat, you’ll probably require it on the
flight as well. Use the navigation system on your mobile phone, that’s equally
good. Equip yourself with whatever you will need while travelling and avoid
extra fees being added to your rental bill.
·
Buy Car Insurance
Wisely: It is quite possible that you don’t have enough coverage, so you have
to buy insurance to save yourself from legal liabilities. If you are in such a
situation, you can opt to buy insurance from the car rental agency, but that
can be very expensive. One other option is to buy car insurance from other
sources. This way you can negotiate the price and shop around to get the best
deal. There are many rental car insurance options, but buy ones that are
essential.
It is easy to
pile on money on your car rental bill, but doing some research and homework can
save you from paying extra money to the car rental agency. Make sure you ask
questions to the rental staff and have a good idea about what to expect from
the car rental. If you are unable to understand any part of the rental
contract, ask for an explanation. Sign
the contract only when you are satisfied with clause and policies mentioned
in it. Being able to drive your favourite car is great, when you can drive it
in a cost-effective manner.
Should You Purchase a Car Rental
Insurance?
The answer to the
question ‘Whether you need car rental insurance?’ is never easy. When you reach
the car rental counter, the first thing you are offered is a car rental
insurance, and you are expected to make a prompt decision, whether you need it
or you don’t. Many people decline the offer without giving it a second thought
since they either don’t want to add extra to their daily bill or they are
confident that they have enough coverage already.
What if you meet
an accident? What if the rental car is damaged? Does your car insurance cover
you from all this? This brings up the question all over again, ‘should you buy car rental insurance’.
Well, it depends on some factors like your auto insurance, credit card benefits
and what sort of coverage the auto rental policy offers. Here are some
considerations that will help you decide whether or not to go ahead with buying
car rental insurance:
1. Go through Your Auto Insurance
Reviewing your
own auto insurance is very important to be able to decide, whether you need
additional car rental insurance or not. If you own a car, you must be having
auto insurance and in most cases this would cover your rental car as well. The
basic liability coverage would protect you from damage that the rental car
causes to other vehicles, people or properties. If you don’t have a car of your
own, you should consider buying car rental insurance from an insurance company
that offers the best prices.
If you have auto
insurance and you don’t want to buy extra insurance, make sure the existing
policy has collision coverage and comprehensive coverage that covers any damage
to your car due to accident, flip over, vandalism, flood, fire, etc. If you
find these present on your auto insurance, move on to the fine prints to find
out whether rental cars are eligible to get the coverage. The best way to get
answers to these questions is, call the insurance company and get answers to
all the questions.
2. Know Your Credit Card Benefits
The car rental
protection offered by various credit card companies vary by the type of card
you are using. While many companies would pay the loss-of-use charges, many
will explicitly prohibit them. Since the levels of protection differ widely, it
is wise to call your credit card company and ask about the specific coverage
details provided for each card that you have.
The primary
coverage would be provided by your personal auto insurance while the other
things would be taken care of by the credit card companies (but they have their
own limitations). Certain type of cars might not be covered by the credit card
companies, so make sure you have a detailed discussion about the coverage
provided. The credit card coverage will be applicable only if you do not take insurance
from the car rental agency, make the payments using that particular credit card
and the person renting the car is same as the one who owns the credit card.
There are many
things to be considered if you are depending on the credit card company to
provide coverage for rental cars. Meet them personally to know about the
details, and once everything is settled ask them to provide s printed copy of
all the coverage and terms & conditions.
3. Go through the Car Rental
Agreement Thoroughly
For this, you
will have to visit the car rental agency. Ask for the car rental agreement and
find the section that includes details about your responsibilities under the
state law in case there is an accident and the rental company’s waiver. If the liability exposure is limited by the
state law and you are lucky to have enough protection from your personal auto
insurance and credit card companies, you can confidently decline the car rental
insurance offered to you.
Whether you need
additional insurance or not would typically depend on your situation. If you
already have enough coverage there is no point buying extra coverage to
increase your daily rental bills. On the other hand, if you find that you do
not have sufficient coverage, you may have to buy extra insurance. The staffs
would offer you many types of rental insurance, but you do not have to buy them
all. Evaluate your travelling needs and
the associated perils and then buy appropriate insurance.
Accidental death
and personal property insurance offered by the rental agencies should be
declined at once, since these are covered under the health, homeowners and life
insurance that you already have. Buying a rental car insurance can be very
tricky, so make sure you do enough research and homework, so that you don’t end
up paying excess.
Types of Rental Car Insurance
If you come to
know that you are not adequately covered by your existing auto insurance and
the credit card company, buying a car rental might become essential. Some states
make it mandatory to have car insurance before you drive a car. Coverage is essential since the costs
associated with damage of the car or other property can be too expensive.
The medical costs of the victims can also be huge. Moreover, to keep the rental vehicles safe,
the car rental company might require you to buy insurance before you can drive
their cars.
Here are the four
basic types of car rental insurance which will be offered to you when you
approach a car rental agency.
·
Collision Damage
Waiver: The collision damage waiver and loss damage waiver is not insurance in
true sense. It means you are agreeing to pay for any damage done to their
rental vehicles or in case of theft. So do you need to have this insurance? This
is one that you can consider buying from the rental agency. If you are forced
to buy insurance while renting a car, ask for a CDW or collision damage waiver.
While your personal auto insurance will provide collision coverage for rental
vehicles, all types of rental charges might not be included. For example, many
auto car insurance or credit cards do not pay the loss of use charges. Credit
card coverage is secondary in nature, so consider buying a CDW if there is no
other option. The best option to get protection against theft or collision is
through a third-party rental car insurance. These are cheaper than the ones offered
by car rental agencies.
·
Supplemental
Liability Insurance: Liability insurance offers coverage for damage done to
other’s properties and medical costs of the victims who got injured because of
you. A minimum amount of liability insurance is required by all states, so if
you already have auto insurance chances are you have liability coverage. The
staffs at the rental agency may try to persuade you by telling that you do not
have enough liability coverage, so it is essential to have supplemental coverage.
If you are satisfied by what they tell you, get umbrella liability insurance
which is a low cost policy added to the existing homeowners or auto liability
insurance. This provides enhanced protection when you’re driving a rental car,
without adding too much to your daily rentals.
·
Personal Accident
Insurance: While liability insurance looks after other’s benefits,
personal accident insurance will provide coverage for your damages, injury,
etc. The passengers travelling along with you will also be covered under this
policy. In most cases, you are not required to buy this type of insurance since
the benefits offered by the personal accident insurance is already covered by
the health, car or life insurance that you already have. They are also covered
under the mandatory coverage provided by the car rental agency. So you can
safely decline to buy this insurance.
·
Personal Effects
Coverage: This provides coverage for theft of personal possessions
from the rental car. But the coverage has a fixed upper limit. The homeowners
or renter policy already provides coverage, so make sure you check the policy
before leaving home. If you are travelling with expensive jewelleries, costly
electronics and other instruments, it is wise to protect them. If you are not able to check the policies,
keep a copy of the policy with you, so that you can refer it whenever needed.
The easiest way
to buy a rental car insurance is to research on the types of policies available
and their respective coverage. Review
the personal auto insurance and credit card benefits thoroughly. If you
still find yourself in a confused state, get in touch with a third party
insurance company and ask about the possible alternative. Tell them about your
existing policies and get their opinions about buying extra insurance from car
rental agencies. Even if you check ‘yes’ on the car rental contract, there are
ways to waive off the insurance. Return it to their office right on the next
day and ask them to cancel the insurance.
To make your
vacation or trip, memorable, it is important that you make the right choices. If
you are sure you don’t need additional insurance, firmly say a ‘NO’.
Things to Consider About Your Auto
Insurance before Renting a Car
In most cases,
your auto insurance will provide enough coverage for you when you drive a
rental car, but there are situations when you might not get the coverage at
all. If you are in doubt about any situation, which can void the coverage
provided by the auto insurance, get in touch with the insurance provider at
once and get all the queries cleared. Some things to consider are:
·
In case, a person who is not included in your personal auto
policy drives the rental car and a mishap occurs, the person and the damages
caused by them may not be covered. Get an answer about this from the auto
insurance provider.
·
In many cases, the coverage provided by the personal auto
policy is not enough. Even if it covers collision damage for a rental car, the
limit may be equal to the value of your vehicle. If the rental car values more
than your personal car, then you may have to pay for the extra damage from your
pocket. In such cases, calculate the amount of coverage that is not available
and consider buying a supplemental insurance.
·
Several personal auto insurance does not offer coverage for
business trips. Most of the auto insurance companies do not cover vehicles that
are used to deliver business items like materials, supplies, food, etc. if such
is your case, call your insurance provider and get an answer.
·
Insurance coverage for long term rentals is very tricky. Most
of the credit card companies offer coverage for 30 days maximum, so what would
you do if you need a car for a longer period of time?
·
Coverage by your auto policy and credit cards may not be
valid for foreign countries. Look out for the other options available.
·
Some special types of cars and vehicle may not be covered
under the rental insurance provided by the credit card companies as well as you
auto insurance. Check it well before hiring a car.
Often times, you
face situations where you have no other way than to buy additional insurance. If
you are in such a situation, get in touch with a third party insurance provider
and ask about the available options. Many times you can get policies equivalent
to the insurance offered by the rental agencies but at cheaper rates. Why would
you spend extra, when you can save money by buying smart? Do some extensive
research on available rental insurance and shop around to find the best
insurance policy with best rates.
Reasons You should not Take Additional
Rental Car Insurance
Buying a car
rental insurance is the trickiest decision that you have to make while renting
a car. Many times people end up buying additional insurance that they actually
don’t require and this adds something around £5 to £30 per day on their rental
expenses.
According to
National Association of Insurance Commissioners (NAIC), about 42% of the renters are unsure about the insurance coverage
when they are out to rent a car. And 34% of renters among them will buy
additional insurance to make sure they are well protected while they drive,
even if they have to pay excessive money. This automatically helps the car
rental agencies to rake up their profits.
People make this
mistake since they don’t know their auto insurance well. They are also unaware
about the benefits provided by the credit card companies. Even if they are not
completely covered, some form of protection is always available. The leading
credit card companies like American Express, Discover, Master card and Visa,
all offer car rental insurance and are ranked 1st, 2nd, 3rd
and 4th respectively, based on the how clearly they mention the
coverage and how easily can the claims get paid.
These companies offer collision damage and theft protection
on rental cars as a perk for being a member with them. To make sure you
make the credit card coverage available, you have to use your credit cards to
pay the entire rental bill. You cannot buy a supplemental insurance from the
rental agency. If you mistakenly, buy one the credit card benefits for rental
cars become void. Even though such benefits are available, 1 in 4 consumers are in totally unsure about the coverage provided by
their credit card providers.
Rental car
coverage offered by credit card companies have their own limitations, so you
should know the types of cars covered, the extent of coverage provided, before
you rely on credit cards for protection.
Some companies will not pay for damages done due to driving on unpaved roads,
while some others would not consider exotic cars and vehicles with open beds
like trucks. Many credit card companies would cap the rental duration at 15
days, while others would offer coverage for a maximum of 30days and no more.
Here is a glimpse
of the rental car coverage offered by the leading credit card companies:
·
American Express: All types of
cards issued by American Express offers insurance and rental coverage for
damage to tyres and rims, towing charges and accidents that occur due to
driving on dirt and gravel roads. In most cases the coverage is available for
30 days. The company also provides coverage for loss of use of the rental car
and insurance deductible. The limitations are – some type of cars like SUVs, trucks,
etc. are not covered.
·
Discover: The rental
coverage provided by the cards issued by Discover end up to 31days. Loss of use
on the auto insurance is not covered, while coverage is available for damage to
tyres and rims, towing charges and accidents occurring due to dirt and gravel
roads. Vans, trucks and luxury cars are not covered under the rental insurance
provided by Discover.
·
Master Card: Rental
insurance is only available for the World cardholders. For World cards the
covers lasts up to 15days and for World Elite card holders the coverage is
available for 31days. The towing fees, damage to tyres and rims are covered and
accidents occurring on dirt and gravel roads that are well maintained by the
city are covered. Insurance deductible and loss of use is covered, but no
protection for trucks, vans and luxury cars are available.
Visa: The rental
insurance benefits are available for all types of card holders. Insurance
deductible, towing charges and loss of use are covered under the rental
insurance. Accidents on dirt and gravel roads are not covered and the coverage
is available for 15days domestically. Coverage for damage of tyres and rims are
also not covered. Vans, luxury cars and trucks are not covered under the rental
insurance offered by Visa.
In many countries
like Italy, Ireland, Australia, Jamaica, etc, credit card rental insurance is
not accepted by the rental companies. If you’re going on a business trip, make
sure your personal auto insurance offers coverage for business car rentals.
Why do the car
rental staffs pressurize you to buy additional insurance, even if they know you
are adequately covered by your own auto insurance or the credit card company you
are using!? Here is the reason why they will:
The car rental
insurance offered by the car rental agency is highly priced. Much more than
what you can obtain from a third party insurance company. Insurance is a high margin item for the rental agencies. Being able
to sell rental insurance, the car rental agency is able to make huge profits just
like the other rip-offs which include GPS navigators, extra child seat, prepaid
gas charges, etc.
The truth is that
the rental agencies obtain these insurance for very less but sell them at high
rates to their clients, which increases their daily rental bill considerably.
Selling products other than the car and the mandatory insurance coverage is
essential for the employees for their livelihood. Many employees feel guilty
about doing so, but in order to get promotions and salary hikes, they have to show
high sales on their part.
Conclusion
Rental car insurance can be the biggest car rental rip
off. When you stand at the car rental counter, you be offered with various
forms of the same rental coverage and you’ll be expected to make the decision
in a fraction of a second. There will be hundreds of people standing in the
queue, pushing you to complete the formalities fast and on the other side of
the counter will be a person persuading you to sign a contract with the rental
insurance offered by them – this might make you go insane, but you will have to
make the decision under this tremendous pressure.
To make the process smooth, review the auto policies
and credit card benefits thoroughly before leaving your home. If you find you
don’t have enough coverage, talk to the insurance providers and know about
other options. Under all circumstances,
insurance bought from a third party provider is cheaper than that bought from
the car rental agency. The rental insurance offered by credit card
companies is secondary, so make sure you evaluate the auto policy well.
If you already own a car, chances are that you have
enough coverage and there is no point in buying additional rental insurance.
But if you see, the employee takes you to a point where you have no other option
than to buy rental insurance, choose the CDW
or Collision Damage Waiver and nothing else. All other types of insurance
offered are utter wastage of money and will be covered under the health,
homeowners or car insurance policies that you already have.
Remember, when you are on a vacation, you are prone to
spend more than what you have decided – shopping, sightseeing, outdoor
activities, there is a lot that you have to explore. So it is wise to keep the
rental costs minimum. Carry your
essentials, know your insurance coverage and return the car with a full tank –
this ensures that most of the rip-offs are taken care of.
Author Bio: Vineet Agarwal has been long associated with V1 Technologies which offers world class Website Design, SEO & PPC, Domain & Hosting, Mobile AppDevelopment and other similar services. Aside from being a dynamic entrepreneur, Vineet is an avid traveller and loves exploring new countries and culture. Discount car rentals interest him largely and he has been extensively sharing his knowledge with friends and peers about discount car rentals and mistakes to avoid when hiring cars.
No comments:
Post a Comment