Consumer Reports Advises Drivers on Necessity of Rental-Car Coverage

Rental-car salesmanIn its newest publication of Consumer Reports, the Consumers Union (CU) makes a useful auto insurance coverage recommendation, advising motorists to sidestep the “insurance hard sell” by passing on purchasing coverage from rental car companies.

The CU says rental companies often try to sell customers on loss damage waivers that cost around $60 to $250 per week in order to limit damage liability. But, the CU points out, “You might not need the [loss damage waiver] if your own auto insurance policy includes collision and/or comprehensive coverage or if you use a credit card that provides protection.”

According to the article, drivers should check their insurance agreement to see whether it extends to rentals and business travel and if it only applies if the car is being driven in the United States.

If the personal policy does cover rentals, another important point is whether it covers losses from “diminished value” and “loss of use.” These are losses that arise from the fact that rental agencies need to have cars to rent out. If a renter’s accident landed the car in a repair shop for a matter of weeks, the rental company is losing income because of that and can seek reimbursement.

The bottom line, CU says, is that the loss damage waiver should be seriously considered only after a consumer has checked his or her personal policy and has found no or minimal rental protection.

They also point out that credit-card-based protection may not cover second drivers or comprehensive claims.

In cases where a personal policy does not extend to rentals, most insurers offer rental coverage as an add-on to a policy.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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