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