Fully comprehensive insurance is an optional insurance policy for rented vehicles that protects the renter from repair bills in the event of theft or an accident.
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Car rental companies expect their customers not only to pay for damage to their vehicles, but also for any loss of income while a vehicle is being repaired. A fully comprehensive insurance usually comes with a “loss insurance” that releases the tenant from this responsibility.
How much is it?
This optional coverage has gotten more expensive in recent years, often costing $ 30 or more per day, so the cost of renting a vehicle for a week can increase by more than $ 200. It is usually offered to tenants when booking online and when picking up the vehicle in person.
Should you get it?
So should you choose a CDW / LDW the next time you rent a vehicle? It depends, so you don’t automatically agree to these additional costs. Here’s why:
- If you have collision and fully comprehensive insurance for your personal vehicle (s), this should also cover the vehicles you rent; check with your insurance agent to be on the safe side. The same applies to your liability insurance, which covers damage to other vehicles, property and personal injury. (If your insurance covers rental vehicles, be sure to have your insurance ID with you.) Note that this coverage will most likely apply to rental cars driven in the United States and likely in Canada, but not in other countries. In addition, your auto insurance is unlikely to cover the loss of revenue if a damaged rental vehicle is out of service.
- Some credit cards cover some or all of the damage to rented vehicles when you pay for the entire rental cost with that card. Some cards offer full CDW / LDW coverage, but more often they act as a secondary insurer so your auto insurance remains primary. This means that the credit card may only cover the cost of your deductible. It also can’t cover the rental company’s lost revenue, and some cards may require you to pay for the repairs – which can easily exceed $ 1,000 even for a fender bender – and then request a refund.
This credit card advantage is no longer as common as it used to be, so you should be sure before renting and find out about the scope of the coverage.
- If you don’t have car insurance or credit card to cover damage to the rental car, then you are on your own, so a CDW / LDW could be good protection against large financial expenses. Note that a CDW / LDW does not include liability insurance. So if you do not have liability insurance for rented vehicles, you will be responsible for damage to other vehicles or property and medical expenses due to injury to others. Landlords also offer liability insurance for a surcharge. Every state requires liability insurance, so you’ll need to buy it if you don’t already have it.
Further considerations
Some tenants choose to purchase CDW / LDW insurance from the landlord because they do not want to make claims through their own insurer and risk facing higher rates or a deductible in the future. However, this means you are paying a heavy price for the double coverage you already have.
Car rental costs have skyrocketed since travel restrictions were eased in many parts of the United States. Hence, relying on your own auto insurance is one way to save money.
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