Just what gets covered if you go for car rental insurance? All agencies that rent cars try to pull you into buying the following four kinds of insurance coverage in this particular category.
1. Damage caused to car rented: LDW, or in other words, Loss Damage Waiver, could be easily considered the frequently occurring form of car rental insurance among a majority of big rental companies. The insurance covers only the car and nothing else, if it happens to be damaged by the renter, and it does not matter as to how the car was damaged. Let us consider that the car rams into a tree and suffers damage, then the repair costs for the car will be borne by the insurance company. Even when a collision occurs between this car and another car, only the rental car's repair expenses will be met with by the insurance company. This will be reviewed as under, at length under an entirely different heading named "liability coverage".
When you rent a car, ask the agency whether they have a cover known as Loss Damage Insurance (LDI). Many smaller car rental agencies do offer it. The insurance cover is similar to another cover called LDW except that in LDI, a third party collects the fees.
Of the two, LDW is a preferable option. Under LDW, even complete, irreparable damage to the car is "forgiven." The reason behind this is that most agencies renting out cars are themselves the insurers for their cars. They pay out the car rental insurance every month into a fund that is used to tide over losses.
LDW may be partial or complete. Full Waiver, with several variations, may be found in offers all over the U.S. In regard to Partial Waiver, insurance coverage is restricted to a particular dollar amount.
2. Coverage to other parties' property and person: Coverage under Additional/Supplemental Liability Insurance (LIS or SLI) is set at a specific dollar amount (generally up to one million dollars). This coverage is for damages to other persons or their property, either by the policyholder or by another person authorized to drive by the policyholder.
3. Personal Effects: The most economical (and, as per me, crucial) cover is the Personal Effects Protection, known in short as PEP. This is also popular as Personal effects coverage or PEC. Losses suffered by you as well as your party, due to burglary or accidental damage, are covered here, limited to a predetermined dollar amount. The hotel room in which you stay in as well as all places you go to during travel are included under the insurance. The cost of the insurance is normally not even 2 dollars a day. What mostly happens here is that excluding a certain deductible amount, everything else is paid in cash, up to the policy limit, which is less than $2000 in most cases.
4. Personal Accident Protection. This inexpensive policy can be had for a daily premium of no more than five dollars. The protection provided is up to $100,000 paid to the driver, and frequently, to each passenger of a car involved in an accident with you. Also, in the case of a car rental, the driver whose name is on the contract is normally covered for the duration of the rental. In the case of motorists who have neither travel nor medical insurance, this policy will provide complete coverage during the trip. Americans residing outside the United States or who tour abroad with no personal travel insurance should seriously consider this type of policy.
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