Coverages & Waivers - Decline or Accept? Check before leaving.

When they get to the rental counter, many renters are unsure about what to do when it comes to accepting or declining an agency's coverage and waivers. This indecision usually results from not knowing what their personal or business car insurance covers while renting a vehicle. In addition, some credit cards cover damages to many basic types of rental cars. It's a good idea to check into your existing coverage before your trip.

Among some of the reasons for checking your existing coverage before your trip are: 

Liability

Most rental car companies will hold you totally responsible for your rental vehicle if damaged or stolen.

Potential savings

These coverage can add up to $12-$25 per day on your final car rental bill. There is really no need to pay for coverage you already have (Note: Some renters may want these coverage to protect their existing personal car insurance premiums/rates).

Some Types of Coverages Agencies Offer

Here's some information to help you do your homework. There are 4 main types of coverage that will be offered while you're at the counter. Many of these may be covered with your personal or corporate auto and health insurance coverage.

1) CDW (Collision Damage Waiver), LDW (Loss Damage Waiver), PDW (Physical Damage Waiver). Although technically not collision insurance, in return for a daily fee, CDW or LDW waives the right for a rental car company to recover money from the renter if the vehicle is damaged or stolen. This does not cover damages made to someone else's car during your rental (third party damages). Your personal or business auto coverage normally covers this when you are renting a car. Check first with your car insurance agent.

Some CDW's can even become void in certain circumstances. This may happen if you drive in a negligent manner or out of the state in which you rented the car if geographical restrictions apply in your rental contract.

2) Personal liability coverages such as LIS (Liability Insurance Supplement). Besides LIS, an agency may offer supplemental or additional liability coverage which pays over and above what your personal or business insurance covers. If you do not already have personal liability coverage you should purchase the rental agency's.

3) PAI (Personal Accident Insurance or Coverage). This provides a one-time payment for you or a passenger in case of death or maiming from a car accident. This is generally covered under your auto or health policies.

4) PEC (Personal Effects Coverage) or Personal Property Insurance. This pays if you have something lost or stolen from your car. Opting for this coverage is obviously something you have to decide for yourself since your existing coverage probably doesn't include this coverage. Although many of these except PEC may be covered with your existing personal car insurance policy, its a good idea to check your insurance policies with your agent first.

Credit Card Car Rental Coverages

Besides your personal car insurance, some credit cards will cover damage or theft to your rental car. While this may replace the need for CDW (Collision Damage Waiver) and LDW (Loss Damage Waiver) offered at the car rental counter, check with your credit card company to see what kind of vehicles are covered and if it's primary or secondary. For some credit card companies, it becomes primary only in the absence of any personal collision insurance of your own.

Credit card companies do not provide coverage for more expensive rentals, so it is necessary to call your credit card company to see which rental vehicles they cover. Usually they provide coverage for cars and exclude more expensive rentals such as sport utility vehicles (SUV's), luxury cars, exotic cars and vans.

Another consideration: You may want to accept an agency's coverage since your personal car insurance rates may go up after you make a claim.

Fuel Purchase Options & Tips

When picking up your car, check and be sure you have a full tank of gas before you leave the lot. Although picking up a car with less than a full tank of gas is rare, it can and does happen!

At the beginning of your rental, some agencies ask if you want some kind of "fuel-purchase option". This eliminates the need to bring the car back full (usually required) and can be advantageous if you are in a hurry. The downside to this option would be that you may have bought some unneeded gas when not bringing the rental back empty.

The upside is that this option eliminates the need to stop at a gas station on the way back to the airport when returning the rental. You also are not required to buy gasoline from the agency at substantially higher than market prices if you decline this option and also fail to return the rental with a full tank! Usually when purchasing this fuel option at the beginning, the agency will charge you gasoline prices at or near the market price of the immediate area.

If you are thrift-minded and not in a big hurry, you may want to decline this fuel option and leave enough time to "fill up" before returning your vehicle. In doing this, you will not be stuck with the only fuel option at the end of your trip. That being, buying some pretty expensive gasoline