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Understand How Car Rental Insurance Works

car rental insurance

It is established that availing car rental services for your trip or on a vacation is one of the best ways to travel. It offers a lot of comfort and flexibility which makes you have a fulfilling experience of the journey.

Everything is a cakewalk until the time you encounter a problem. And, everything comes crashing down if you meet with an accident or there are some damages and you do not have insurance cover signed with your car hire company to back you up.

This emphasizes how important it is for you to always make rental car insurance a priority when you sign the terms and conditions with your car rental services. Next, is to understand what each of the types of car rental insurance policies has to offer and what does it mean. In this blog, we discuss the standard terms, policies offered by most car rental companies in a way that it helps you to make a confirmed decision.

The Types of Car Rental Insurance

Enlisted here are the most common types of insurance policies that a car rental company would be willing to offer you. It is important to verify whether the stated insurance policy is included by the car rental service providers by default or whether you have to buy it.

In most cases, there is certain insurance that exists as soon as you rent a car but if you are willing to buy extra protection, that is offered too.

Collision Damage Waiver (CDW)

This insurance is applicable when you meet in a car accident with your rental car and any damage is caused to the vehicle. Most companies include this insurance in their rental charges. You only have to pay the car hire excess insurance. 

It is important to note that you shall not be protected by the CDW in case there is any damage to the bodywork of the car if you were illegally parked, caught speeding, smoking, drunk-driving, was under influence of drugs, or there is any deliberate attempt on your part to cause the damage.

Moreover, not every part of the car is included under the CDW. The CDW does not cover damages of the interior, windshield cracks, tires, wheels, and interior accessories. You have to pay for the damage completely if there is no additional loss damage waiver to support you.

CDW is likely to vary on the basis of the location and car group and the subsequent excess amount is thus calculated.

Many car rental companies also offer a comprehensive policy called the Super Collision Damage Waiver (SCDW) if you are willing to pay some additional fees. This insurance does not cover the interior damage or tires but it reduces your liability substantially.

Most companies with franchises allow you to avail of the credit card coverage or make payment with a debit card.

Theft Protection (TP)

This insurance covers the renter in case the rented car/vehicle is stolen or any damage occurs in an attempt to steal when it is not under the control or fault or the person who has rented the car.

This insurance however will not offer protection in the case when the driver has left the keys to the ignition, driving in a country/area that is not cleared for the vehicle, lost the keys or remote control, and registration certificate of the car. You will have to pay back the sum in such a case.

You should carefully read the terms of this policy at the time of signing the agreement.

Third-Party Liability (TPL/TPI)

This type of insurance is compulsory by law and almost all auto insurance for car rentals cover it. But, in addition to this, you can opt for supplementary liability insurance (SLI). This covers the external damage to the rented vehicle, third-party bodily injury, and also compensates for any damage caused by your rented vehicle.

TPL covers the responsibility of the driver in the damages that it may cause to the properties of others, but not to the rental vehicle. It goes unsaid that any damage caused intentionally in road-rage, under influence of alcohol or narcotics is not covered even with this supplemental liability.

Personal Accident Insurance (PAI)

This type of insurance is also called the “Occupant insurance” and it covers the damage or death in case of an accident. It helps you pay for the hospital fees if a passenger is injured in such a case. This is a prevalent insurance policy all over Canada and the USA. Sometimes this insurance also covers the theft of personal luggage in the car if it is stolen.

Ultimately when you are availing car rental services, it is necessary that you keep yourself well-protected with a suitable insurance policy of your choice. It keeps your travel safe and move about stress-free on your journey.

Always be careful about the conditions laid down by the car rental company you are opting for and also read about the rules and regulations of the particular country you are traveling in. Treat the car well as you would love to receive as it would be used by others after you.

Ensure that you inform the agency immediately in case of a problem and closely co-operate with them for your own benefit when you are hiring a car.

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