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Friday, July 29, 2016

Why Your Own Auto Insurance Is Better

If you've ever rented a car, you were likely asked if you want to purchase the car rental agency's protection packages at the counter.  Car rentals sell PDW, sometimes referred to as LDW or CDW, which is often represented as car rental insurance, but is slightly different.  When you accept PDW (physical damage waiver), LDW (loss damage waiver) or CDW (collision damage waiver), you are purchasing a waiver that waives the car rental's right to collect damages that occurred to the rental vehicle while on rent to you provided you complied with terms and conditions of the rental agreement.  It is not an insurance policy and it does not cover third party claims (personal injuries or damages to the other vehicle or another person's property like backing into a marble pillar at a building).  

The requirement to comply with the terms and conditions of the rental vehicle is something worth thinking about.  If you ran into a curb and damaged the tire and wheel, the waiver is usually void because the damaged occurred while you were driving recklessly.  If you were at fault in an accident the waiver is usually void because the terms state that you drive in compliance with the law.  This means that speeding, running red lights, pulling in front of someone are all reasons to invalidate the waiver.  

Third party coverages are available by purchasing the car rental company's SLI or Supplemental Liability Insurance, but it is just that, supplemental.  In the event of a third party claim, where the other person needs to have their car repaired for example, the SLI package takes a back seat and your auto insurance becomes primary.  The SLI only activates once your policy is exhausted.  

If you own a car, and carry a full coverage auto policy on it, chances are that your auto policy automatically extends to rental cars as well, at no additional cost.  When renting a car, you or the rental agent can call your insurance company to make sure you have a full coverage policy that is transferable to a rental vehicle to give you peace of mind and save you money at the rental counter. 

Many credit card companies also provide car rental coverage, but it's a great idea to check with them before renting.  Each card is different and there are some exclusions to be aware of.  Most foreign issued cards do not provide coverage for vehicles rented in the U.S.   Most U.S. issued cards do not provide coverage for vehicles taken into Canada or Mexico.  An increasing number of credit card coverage programs restrict the type of vehicle you can rent, with 12/15 passenger vans, large 6 seater SUVs, exotic vehicles, and luxury vehicles with a higher price tag topping the list.  When calling the number on the back of your card, be sure to tell them the model of the vehicle you're renting and find out if they have a day limit.  Some credit card companies cover for a maximum of a 30 day rental, some cover up to a 15 day rental.

Accepting or declining coverage at the rental counter is an important decision.  You want the peace of mind that you are covered, but you don't want to pay for more than you should.  And extra coverage doesn't always mean extra protection.  Call your auto policy agent and credit card company before signing on the dotted line and know the facts.  A good car rental agent will call for you and verify your coverages before printing the contract.  Be knowledgeable, be smart and safe driving.  

For more information, or to rent a vehicle, call us at 703-528-8661 or visit us at www.AdvanceCarRental.com