Car rental insurance is a subject that always worries me. You come to rent the car, everything, especially the price is fine and then right at the end they start circling these insurance clauses where you have to sign and the price starts to rocket. That’s when I think of a hundred questions, and never ask them. Can I turn down these different insurances and save money?
In most states, car rental companies are prohibited from refusing to rent you a car unless you purchase the additional insurance, but many companies still try to do it. The coverages that you can get are all optional. Combined, they can add up to $30 per day to the rental bill. Each coverage protects against a different risk, but your car, home, life, or health insurance policies, or your credit card, may provide all or part of the protection you need, particularly when they are combined with the minimum insurance the car rental company is required by law to provide as a part of every rental.
There are four different types of insurance coverages the companies try to sell to consumers at the rental counters:
o Collision Damage Waiver (CDW),
o Supplemental Liability Protection (SLP),
o Personal Accident Insurance (PAI),
o Personal Effects Coverage (PEC). This coverage may make sense for some renters but in most states you already have this coverage for a rental vehicle as part of your primary auto insurance, unless you declined to accept it when you purchased that policy.
SLP usually provides $1 million of liability protection, considerably more coverage than most consumers have under their own automobile insurance policies. So if there is a reason that you want more coverage for the rental than you ordinarily carries for your own car or you do not have an automobile insurance policy, buying the SLP may make sense.
PAI coverage, which costs about $3 per day, provides medical, ambulance and death benefits for the renter and passengers of the rental car in the event of an accident. The medical coverage is usually around $3,500 and the ambulance benefit $150 and REC coverage typically costs $2 per day, usually provides $500 per person of insurance coverage, with a $1,500 maximum, for theft of personal effects of the renter and his or her family.
The lesson learned here is that before you buy into rental car insurance, you should check to see if you are already covered through your own car policy.