Summer 2016 Volume 12, Number 2 | |||||
Should You Buy Rental Car Coverages?If your vacation plans require a rental car, knowing what your existing insurance policies cover could save you money. The next time you rent a car and the agent asks whether you want the optional coverages, should you say yes or no? Buying them will add substantially to your car rental costs—if you buy all the additional coverages offered, you’ll add at least $18 to the rental charges per day. Are these coverages worth it? Read on for more information. CDW or LDW
The collision damage waiver (CDW) or loss damage waiver (LDW) cost the most of any of the optional coverages, about $10-$25 a day. Although the CDW and LDW are not insurance, they will waive your financial responsibility if a car you rent is damaged or stolen. Liability insurance Some home-based businesses need coverage that goes beyond the business owner policy. Rental car companies can provide up to $1 million in liability coverage for between $7 and $14 per day. This covers you for property damage or bodily injury you cause to another person while driving the rental car. Personal accident insurance This covers you and your passengers for medical costs if you’re injured in a car crash for between $1 to $5 a day. Personal effects coverage
At an additional $1 to $4 per day, this coverage will reimburse you for the theft of items from your rental car. Personal auto policy
For example, your personal auto policy extends collision and loss coverage to cars you rent for personal purposes. (Cars you rent for business are another matter.) However, if you have “bare bones” coverage, or no collision coverage, buying the CDW or LDW might make sense for you, unless you’re willing to run the risk of having to pay for a relatively new car if it’s totaled. Further, most personal auto policies won’t cover you for any loss of use fees or diminution in value charges. Homeowners policy Your homeowners or renters policy covers your personal property even outside the home. You’ll have to pay the deductible, and policies exclude coverage for certain types of goods—such as equipment used in your profession. They also have lower limits for certain high-value goods, such as jewelry, silverware and firearms. To protect these items, you will need either an endorsement (or addition) to your policy, or a separate floater policy. These will cover your goods anywhere in the world. Medical insurance Group or medical insurance will cover you for auto accidents that occur while you’re driving for pleasure or on personal time. If you’re renting a car for business, however, your employers’ workers’ compensation might apply. Business rentals
Many personal auto policies exclude coverage for cars rented for business purposes. Further, many employers have specific requirements on which rental companies to use and when to accept the rental company insurance. Check with your company’s accounting or travel department for the company’s auto rental requirements before you travel. |
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Protecting Your Home-Based Business Ten Ways to Save on Your Homeowners Insurance Should You Buy Rental Car Coverages?
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