There it is. The second most asked question of the summer, right after “Are we there, yet?” At long last, I, alone, am able to answer that question definitively: Maybe.
The truth is there’s no one-size-fits-all answer. Most people renting a car over their summer vacation will approach the car rental counter and be struck dumb and possibly mute, when they’re asked the infamous question, “Do you wish to purchase Loss Damage Waiver insurance?” Know exactly what your answer will be before you get to that deer-caught-in-the-headlights state of being.
Generally, most people don’t need to buy rental car insurance, and there are a couple of reasons why you might not want to buy it, either:
1. You might be covered already by your own auto insurance, and
2. You might be covered under the credit or charge card you plan using to pay for your car rental.
The easiest way to find out if you do or don’t need to take the optional coverage is by doing your homework (I know, I know, here she goes again with the homework), but you need to get out your phone book and make a few calls.
First, try the #800 number for your insurance company, and ask the representative if your policy covers car rentals. If you get a positive answer, that’s great, but ask them to confirm by fax or e-mail, sadly you can’t just take them at their word. Should something happen and you need to file a claim, you want to be sure that they don’t come back and say that you were, “unfortunately, misinformed.” Result: Claim: Denied.
If your own car insurance doesn’t cover rentals, then your next stop is to make calls to your credit card companies… heck, you’re not paying those high interest rates for your health, are you? You deserve something back. Ask the same questions that you put to the insurance company representative, and if the answer is affirmative, tell them to back it up in writing or by e-mail. Be sure to check on coverage limitations, and find out if there are restrictions regarding the choice of rental agency – some insurance companies partner with a particular car rental company, and you may get a break in the daily rate, as well. Other credit card companies may restrict the number of days you can rent, or the kind of car you’re permitted to rent with the coverage – sorry, the Jag is usually not covered. If you have to pre-enroll for a program, find that out now, too.
Two charge card companies that (as of this writing, at least) provide loss or collision damage waiver coverage are Diners Club International and American Express; all you have to do is decline the insurance, and initial or sign the statement. Citibank also offers it for its charge customers. Restrictions and limitations on coverage do vary from company to company, so be sure to read the fine print.
A couple of things to keep in mind, accepting the LDW still exposes you to losses if you damage another individuals car or property, or if you are injured or cause an injury to another. You also cannot accept the car rental LDW coverage and the credit card company’s coverage -- it’s either or, not both.
If you decide not to do your homework and purchase the car rental coverage from the rental agency, keep in mind that the “loss” part of the Loss Damage Waiver is to the car itself, not to the contents, so if all of your possessions are stolen, you’re out of luck (and maybe out of clothes!). But consider this, on a 10 day trip, with the rental agency coverage being a minimum of $20 a day; you’re shelling out an extra $200. Think of all the great souvenirs that you can buy with that (that will collect dust on a shelf until your spouse tosses them in the trash next year).
Have a great trip!
-- Debt Diva for DebtStoppers
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