As a responsible driver, you understand the importance of having the right insurance. That principle is never more true than when you are driving a rental car. If you already have complete protection on your personal line of auto insurance, you might assume that the collision damage waiver is an additional up-charge that is not necessary. Before you decline coverage, however, continue reading to learn what a rental car accident claim might look like both with and without rental car insurance.
Scenario One: Rental car damages with a collision damage waiver
A driver purchases the collision damage waiver from her rental car company before driving away on vacation. While traveling, she hits a large tire in the road, causing her to spin out of control and hit a tree. Though she walks away with only a few bumps and bruises, the rented vehicle is damaged beyond repair. She contacts a representative at the rental company who sends a tow truck to pick up the car. Since she had a collision damage waiver and was not driving carelessly when the incident occurred, she walks away from the accident with no financial liability. Instead, the rental company assumes all responsibility for replacing the vehicle, covering the towing charges and absorbing the loss of use.
Scenario Two: No collision damage waiver
Now imagine the same exact situation occurs; only this time the driver did not purchase the collision damage waiver. She may be covered for the damages, but she has a long road ahead of her.
First, the she informs the rental company that she has collision coverage on her personal insurance policy. She contacts her insurer to file a claim, but an adjuster must first see the vehicle before her policy will pay. Unfortunately, the rental company does not wait for an adjuster to look at the car before replacing it. Instead, a new car is purchased and billed to driver’s credit card.
Now the driver has a large balance on her personal credit card and has to wait for the claim to settle to get reimbursed. The insurance company eventually agrees to pay the claim, but only based on the actual market value of the damaged vehicle. The rental agreement, however, states that the renter is responsible for losses with valuations to be determined by the rental company – not the insurer. In other words, the driver is still liable for any losses that exceed the insurance payment, which could total thousands of dollars.
Should You Purchase Rental Car Insurance?
When it comes to protecting your finances and assets, you can never be too careful. Even if you have a top-of-the-line auto insurance policy, there may be circumstances where a loss is not covered. A collision damage waiver can help close those gaps and ensure you are fully protected when you are driving a car that’s not your own.
Keep in mind that collision damage waivers only cover damages to the rented vehicle. They do not include bodily injury and property damage liability protection or medical payments for you and your passengers. For that, you would still need to file a claim against your personal policy. Also, many collision damage waivers contain exclusions that could disqualify you from coverage under certain circumstances.
If you have questions about your personal line of coverage and whether it will provide you with adequate protection when you drive a rented vehicle, contact Glass Insurance Center today.