Have you ever considered renting a car to get you from place to place and help you explore your chosen destination on your trip?
When renting a car from a rental company, you’ll need a driving license and car insurance registered in your name – but why do so many rental places offer rental car insurance on top of your original car insurance policy?
Rental car insurance isn’t essential when hiring a car, especially if your own car insurance covers you to drive rentals, but there are some perks to signing the dotted line when picking up the keys to your rental vehicle.
So, what is rental car insurance?
Rental car insurance
Believe it or, despite its name, the rental car insurance you’re offered when collecting your rental car for the holidays isn’t a car insurance policy at all. In fact, the car insurance offered by rental car companies is actually a collision damage waiver, rather than actual car insurance.
A collision damage waiver (CDW), also referred to as a loss damage waiver (LDW), is basically a contract that states you’ll be free of blame if anything were to happen to the hired vehicle whilst in your possession.
Not only do rental car companies offer a collision damage waiver or a loss damage waiver, but they are also known to offer car renters a liability insurance policy too.
What is a collision damage waiver?
A collision damage waiver or a loss damage waiver, is essentially an agreement with the rental company that if anything happens to the vehicle resulting in damage whilst you’re renting it from them, or you come back to find the car has been stolen, you won’t have to pay anything to repair or replace the vehicle.
This type of waiver usually includes a deductible.
So, is it worth signing the dotted line when collecting your rental? We’d have to say yes, it is worth taking out.
Hopefully, you won’t need it, but it’s always worth being safe than sorry. It’s better to be covered if anything happens to the rental than be held responsible for any damage that might occur, and be handed a hefty bill.
What is car rental liability insurance?
Essentially, car rental liability insurance is a policy you can take out when hiring a car, that will help to cover certain costs if you’re involved in an accident. The cover is specifically for costs towards any damage to another person’s property or vehicle or injury to someone that wasn’t a passenger in your rental car.
All rental companies must offer this type of insurance to you when renting out one of their vehicles – it’s actually a minimum requirement in many states across our great country.
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If you are looking to rent a vehicle for a vacation or for any reason, consider adding additional coverage to your rental policy, for those ‘just in case’ moments.