Let’s assume that you have planned a road trip with friends and you stop at the car rental showroom. While you look through the fleet of cars, the salesperson asks if you are keen on taking up the insurance for rental car. While you are debating on this offer, look through www.investopedia.com/terms/c/collision-damage-waiver-cdw.asp and learn about Collision Damage Waiver. Chances are you might come across this term while negotiating with the concerned authority.
If you already have an auto insurance, is it beneficial to get a car rental insurance? Anything can go awry during the trip and you wouldn’t want to take chances. Most of the car rental companies provide 4 different types of insurance options. It includes:
1. Collision Damage Waiver (CDW)
This is only an optional insurance coverage that is provided on rental cars. Most of the car rental companies look at this as a form of waiver to make you pay for the damages. Imagine you have caused an accident and injured someone. This form of insurance makes you liable or responsible for the damages inflicted.
What Does CDW Cover?
All car hire companies have their set of rules and guidelines, but CDW includes the framework of the car. The insurance does not cover windows, mirror, wheels, tyres, and undercarriage.
How Does CDW Work?
While CDW is looked as a type of insurance, in reality, it is not true. The car rental companies hold the insurance and they provide the same to you when you hire the car.
2. Liability Coverage
This is the basic form of insurance options and includes Bodily Injury Coverage and Property Damage Coverage. In case of an accident that results in injuries or even the death of the victim, the Bodily Injury (BI) of the Liability Insurance will bear the expenses. It covers all the hospital bills, lost earnings, and other expenses.
When property is damaged, the Property Damage (PD) part of the insurance will be paid for the repair expenses.
3. Personal Accident Insurance (PAI)
In case of any injuries or death of the passengers in the car, the renter is entitled for the emergency medical expenses and ambulance expenses. Each state has an exception and the amount covered is different. Get in touch with the car rental company to clear any doubts.
4. Personal Effects Insurance
If there has been theft of valuables from the car, this insurance covers you up to a given limit. If you travel with expensive jewellery or electronics, it is best to cover them under the renter’s insurance policy.
Do your homework before you head to the car rental company. Do an assessment of the credit card coverage options and choose a low-cost collision damage insurance well ahead of time. When you stand fact-to-face with the salesperson behind the counter, be prepared to hear some confusing terms. You don’t have to nod your head to everything that is said.
Moral Of The Story
You might be covered by your regular insurance policy, but you were too busy to notice it. Go through your own insurance policy rather than giving in to the car rental firm’ s persuasion.