| Two types of rental car insurance come up | | | | company should have insurance to cover the |
| very frequently: | | | | loss. If not, or if you're not sure, you |
| | | | might want to pay for the CDW. |
| First, when you rent a car, the rental agent | | | | |
| will ask you if you want to purchase | | | | Second, you probably have the option to |
| Collision Damage Waiver, or CDW. This | | | | purchase Rental Reimbursement coverage on |
| coverage reimburses the rental company for | | | | your personal auto policy. This coverage will |
| damage to their rental car if you have an | | | | pay for some or all of the cost to rent a |
| accident. If you choose it, it will add | | | | replacement car for you when your own car is |
| several dollars to your daily rental rate. | | | | in the shop because of an accident. It |
| This might add up to $50-70 or more over the | | | | usually costs several dollars per month, per |
| course of a week's rental. | | | | car. If you have three cars, for example, it |
| | | | might cost you $200 per year or more. |
| If you have your own auto insurance policy, | | | | |
| and your policy includes Collision coverage, | | | | Ask yourself, if you have an accident and |
| then ask your agent if it will cover you in a | | | | your car is in the shop, will you need a |
| rental car. Many policies will pay for the | | | | rental car to replace it? If you and your |
| damage to the car. However, there are two | | | | spouse both work at different locations, and |
| things that your own policy still might not | | | | you each have your own car, you might want to |
| cover: | | | | purchase Rental Reimbursement coverage. |
| | | | |
| - Most personal policies will not pay for | | | | But what if you have three cars, including a |
| "loss of use" for the rental car company. | | | | sports car that you drive only on weekends? |
| This refers to the money the rental car | | | | Or a pickup truck that you use for |
| company could have earned by renting the car, | | | | miscellaneous errands? If one car were in the |
| if it weren't in the shop because of your | | | | shop, would you drive that extra truck to |
| accident. If they could have earned $400 by | | | | work? Or what if you and your wife work |
| renting the car during the two weeks that it | | | | similar hours and could carpool? If so, then |
| was in the shop, they might charge you for | | | | you might not need Rental Reimbursement |
| the $400. If you are concerned about this | | | | coverage. |
| possibility, it is safer to pay for the CDW. | | | | |
| | | | In the end, there are two cardinal rules for |
| - Most personal policies will pay if you are | | | | making good insurance decisions: |
| driving the rental car, but not if you let a | | | | |
| friend drive. This is called "permissive | | | | |
| use." Most personal policies will pay for | | | | |
| damage to your own car if you give a friend | | | | 1. Never pay for coverage that you don't |
| permission to drive it, but they will not pay | | | | need; and |
| for damage to a car that you do not own if | | | | |
| you give a friend permission to drive it (but | | | | 2. Never skimp on coverage that you do need. |
| the friend's insurance might pay). If you | | | | |
| will be allowing someone else to drive the | | | | With that in mind, ask yourself whether you |
| rental car, and that person does not have | | | | need to purchase CDW from the rental company, |
| insurance, you might want to pay for the CDW. | | | | or whether you need Rental Reimbursement |
| | | | coverage on your auto policy. If you need |
| - Some personal policies will not pay for | | | | them, buy them. If you don't need them, then |
| damage to a rental car if you are using it | | | | save your money. |
| for business purposes. In that case, your | | | | |