Different Types of Car Rental Insurance

car-hire-insuranceYou already have car rental insurance, so why do you need more when you’re renting a car? Is there a difference between what you have and the types of car rental insurance to protect you and your wallet from accidents, claims, or usage? Car rental insurance can take a variety of forms and may include but is not limited to T. P., collision damage waivers, and more.

When it comes to renting cars abroad, it’s always recommended that you check your current auto insurance policy or provider to determine if renting cars in a foreign country will be covered under your policy. In most cases, you won’t be, so it will be necessary to purchase various forms of insurance provided by the rental car company. When reviewing the different types of car rental insurance in foreign countries, make sure that they meet minimum coverage requirements for that country.

Collision Damage Waiver

The collision damage waiver and loss damage waiver are typically the same thing but differ from traditional insurance due to its very name – waiver. With this type of insurance, you don’t have to meet any deductibles and the company from which you’re renting a car legally waives its right to in any way hold you responsible for any damage to the vehicle while it’s rented under your name. In most cases, the collision damage waiver or loss damage waiver is an add-on to the car rental agreement. Be advised that if you decline the collision damage waiver, you yourself are accepting total responsibility for any damage, repairs, or theft of the vehicle. It is recommended that you check your current policy to see if you’re covered for this when it comes to rentals.

Read the fine print when it comes to collision damage waivers. In some cases, your insurance may be considered null and void if an accident is caused by you driving illegally, including speeding, driving under the influence, or you’ve been charged with reckless driving. Add this collision damage waiver to your rental agreement if you don’t have any comprehensive and collision coverage with your regular auto policy.

Theft Protection (TP) Insurance

The abbreviation TP stands for theft protection, and in the United States, car rental collision damage waivers or loss damage waivers cover you in the event that the rental cars stolen while it’s rented under your name. Theft protection not only protects you from responsibility of theft of the vehicle, but any property inside the vehicle. For example, if the rental car you’re driving is broken into or stolen, the personal effects coverage policy can pay for the items to be replaced.

Additional Liability Insurance Supplements

This type of insurance often includes add-ons or extra (or no-excess or no-extras) coverage depending on where you’re traveling in the event of damaged property, accidents, or injury to others. When purchased from rental car agencies, this type of insurance automatically becomes the primary liability insurance, and then your own personal or domestic auto liability insurance will cover excess costs.

Accidental Death

Some car rental agencies around the world also offer accidental death insurance, also known as personal accident insurance. This insurance may provide accidental death benefits as well as payments for medical expenses for the driver and other passengers.

Personal Accident Insurance

If you’re in an accident while driving a rental car and someone is hurt, either in your car or the other, you may be liable to pay for their medical expenses. Personal accident insurance protects you in such cases. However, in the event that you’re already covered for this type of situation on your insurance policy, you may be able to claim this at a car rental agency. Before you do so, make sure you know how much your insurance company will pay out, and in what circumstances your insurance company will or will not pay out, depending on where you’re traveling.

When driving a rental car in a foreign country, it is recommended that you also get personal accident insurance coverage if it’s offered by the rental company. Because other members in your vehicle may not be covered by your health insurance or auto insurance policy, you can protect yourself and your wallet with personal accident insurance offered by the rental agency. In some cases, your credit card vendor may also provide personal accident insurance when you’re traveling, but always make sure to read the fine print to know exactly what’s covered and what isn’t.

Bottom Line

When renting a car in a foreign country it’s always best to err on the side of caution. However, most credit card rental policies and your domestic auto insurance policy, and your health or medical insurance policy may cover you for most of the types of insurance required by car hire agencies domestically and abroad. Still, it pays to be safe, especially when traveling in a foreign country. A few extra dollars now may save you major headaches and expenses later down the line.

Insure.com – http://www.insure.com/car-insurance/rental-car-basics.html

CarInsuranceCompanies.com – http://www.carinsurancecompanies.com/different-types-of-rental-car-insurance/

DriverAbroad.com – http://www.driverabroad.com/