Should You Decline Coverage from the Rental Car Company?

FOR IMMEDIATE RELEASE
Los Angeles, California, United States of America (Free-Press-Release.com) January 6, 2012 -- If you’re renting a car and decline insurance from the rental car company because you think your credit card has you covered, you may not be as covered as you think.

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Should You Decline Coverage from the Rental Car Company?

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Many car renters decline insurance provided by the rental agency because their credit card provides rental coverage—a benefit that can be quite valuable—and who wants to pay twice for the same thing? . . Well, it turns out that the coverage provided by the rental car company and the coverage offered by credit card companies are quite different animals—especially in one major way — primary vs. secondary coverage.


Primary vs. Secondary Coverage

While many credit cards provide rental car insurance (when the credit card is used to pay for the entire cost of the rental), the overwhelming majority of this insurance is considered “secondary” coverage. This means that your own personal auto insurance is still the primary car insurance covering you and the rental vehicle. In the event of a collision, your secondary credit card coverage will help to reimburse you for things like your insurance deductible, “reasonable” towing charges, loss-of-use charges, and potentially other charges and fees as well. In other words, you still have to file a claim with your own personal auto insurance provider As a result, you are still open to having your insurance premiums raised as a result of the filed claim.

The coverage offered by the rental car companiesknown as a Loss Damage Waiver (or LDW), however, is considered to be “primary” coverage. While it’s not actually “insurance”, the LDW allows you to avoid making a claim to your own insurance company (though this may not be the case in very bad accidents and those involving injuries or worse). – Hertz’s LDW, for example, covers all damage to the rental vehicle (no matter what kind of vehicle it is), and it applies regardless of who is at fault for the damage to the vehicle.

Be sure to you check the fine print of your credit card company’s rental car insurance policy—as there are restrictions on the type of vehicles covered, type of usage banned, and other limits. Usually, renters of trucks, pickups, campers, off-road vehicles, motorcycles, and exotics, are not offered LDW’s. .
So it may very well be worth it to spend the extra money on an LDW (around $9.00 per day) to gain peace of mind knowing that if your rental vehicle is damaged, you can just drop it off and walk away.


Differences in Coverage Between Credit Card Co.’s

Even if you decide you are fine with your credit card company’s secondary coverage, you should be aware that the coverage differs from credit provider to credit provider. Amex, MasterCard, Discover, and Visa all have different rules when it comes to the limit on how many days the rental can be. For example, American Express will cover you if the rental is 30 days or less. Visa, on the other hand, will cover you for 31 days or less if you’re outside your country of residence, and only 15 days or less inside your country of residence.

Also, the fees that are covered differ among the providers as well. Amex, MasterCard, and Visa all cover reasonable towing and loss-of-use charges, but out of those three, only Amex and Visa cover administrative fees. Discover does not cover any additional fees whatsoever.

Not only that, but you may also have headaches getting reimbursed by your credit card company. Notice the word “reasonable” used in regards to towing and loss-of-use charges? What exactly defines “reasonable”? That’s totally up to your credit provider; you may find yourself having to argue with them, and potentially the rental car company as well, if your credit card company doesn’t want to pay the full amount of these charges.


So is it worth it to get the Loss Damage Waiver coverage?

That decision is ultimately up to you — you need to weigh the extra cost of the LDW coverage with the amount of risk you’re willing to take. If you don’t mind taking the chance that you may need to file a claim with your personal auto insurance company, then maybe the LDW coverage through the rental car company isn’t worth it. However, if you want peace of mind knowing that you can fully walk away from having to deal with the headaches (and maybe even some out-of-pocket cost) associated with a damaged rental vehicle, then purchasing the LDW might be a very good investment. But generally speaking, coverage from a rental car company isn’t nearly as much of a rip-off as many perceive it to be.

Let us know!
What’s your take on rental car insurance? Do you think purchasing LDW coverage from the rental car company is a must, or is it a waste of money? Have an insurance story dealing with a car you rented? Let us know!

More information can be found online at http://www.TheCrediteer.com

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