Going on vacation is a good way to take time for yourself and share with the family. The best way to take advantage of this time is to look for places where it is possible to participate in hobbies and other fun activities.
A relaxed vacation can help clear your mind and recharge your energies. Especially when work or personal life have been very stressful. Traveling is an exquisite way to recover energy.
One of the most comfortable ways to travel locally when we enjoy vacations away from home is by renting a car. It offers greater freedom for travel and stops, especially when traveling as a family.
As for most commercial transactions. Car rental has requirements and conditions that try to make the experience safe and comfortable.
One of these requirements is related to the obligation to take accident insurance.
There are four different types of insurance and coverage similar to the insurance that car rental companies offer consumers at rental counters:
- Collision Damage Waiver ( CDW )
- Supplementary Civil Liability Protection (SLP)
- Personal Accident Insurance (PAI) and
- Personal effects coverage (PEC).
The toppings are all optional. Combined, they can add up to $ 30 per day per policy premium to the rental bill. Each coverage protects against a different risk, it is important that you know what each one covers.
Here we will talk about CDW insurance (from Collision Damage Waiver ),
Why do I need CDW rental insurance?
If you’ve ever rented a car, you probably wondered if you should buy car rental insurance. It can be confusing and even intimidating for some.
Many articles recommend that you ignore any insurance from the car rental company. Because you are already covered by a personal car insurance policy. But this is not always true for all drivers.
In many cases, the policy of the rental company is not only to find a way to save time and money. But also provide valuable peace of mind during your trip.
It’s hard to know what will happen on your road trip. For this reason it is necessary that you become aware of the advantages of owning insurance.
Here are some reasons to consider buying insurance the next time you rent a car.
The insurance car rental CDW transfers responsibility of the tenant to the company car rental.
When you hire CDW you are fully protected during your trip. Deciding whether or not you need to buy CDW insurance is a personal choice.
It is difficult to calculate the accident frequency rate but some procedures may give an idea of this. Usually in the field of insurance it is said that “it is much better to have it and not need it, than to need it and not have it.”
What is collision damage exemption (CDW) coverage?
When you rent a car, the company’s customer service representatives will usually offer you two types of insurance: the collision damage exemption ( CDW ) or the loss damage loss (LDW) exemption.
This means that you will pay a certain amount per day. In exchange for a lower deductible if the rented car is damaged or stolen. The amount to be paid varies depending on the location and the type of rental car.
Taking and paying CDW coverage can add 25% or more to the total rental cost. In some countries, for example Ireland, it is mandatory that you buy CDW coverage.
Unless you present proof of alternative coverage to rent a car, CDW insurance allows the car rental company to waive the right to charge you a high deductible if the car is damaged.
And most importantly, it covers most of the cost of the car if a collision occurs. It usually costs around € 10 to € 30 per day.
The CDW insurance significantly reduce deductibles due in case of accident or vehicle damage. Essentially the rental company waives its right to hold the tenant responsible for the damage to the car.
If you have an accident or if your car is stolen. Without CDW insurance you will have to pay all repairs and recovery charges. These costs can quickly become tens of thousands of dollars.
With CDW insurance you only have to pay an excess or a deductible, which in any case will be significantly lower.
But what does the CDW cover?
A collision damage exemption policy covers almost all parts of the car, with some exceptions. These could be the tires and the windshield, however, it can vary from one company to another.
If I don’t choose CDW rental insurance, what are my options?
The car rental can include liability insurance third party, fire insurance, value added taxes.
If you rent a car in Italy or Ireland. The CDW and theft protection are included in the rental price. They are required by law when driving in those nations.
If you are renting in another place in Europe or in other destinations around the world. We present a brief breakdown of other insurance options and coverage for your protection:
Credit Card Coverage
The company that supports your credit card may offer CDW coverage. Whenever you pay the rent with that credit card. Additionally you must reject the CDW coverage offered by the car rental company.
If you choose this option. Be sure to read the terms and conditions of the credit card operator before renting a car.
With the exception of vehicles with a value greater than US $ 50,000, exotic cars or old cars; You can use the insurance to rent your credit card.
For most cars, vans, motorcycles, trucks, cargo vans, full-size vans and camper vans.
Some credit card companies offer coverage only within the United States, while others exclude specific countries.
Almost all credit card companies exclude car rental in Ireland. Although American Express added Ireland to its list of countries covered since mid-2017.
You should check in advance if your credit card company offers this service. The problem with credit card coverage is that it is limited to rentals of less than 30 days.
Travel insurance providers coverage
It is possible to purchase collision damage exemption coverage from a travel insurance provider. This service is offered within its diversity of options to ensure your trip.
Several travel insurance providers offer coverage for rental vehicle damage. You can buy it, but first you must refuse the CDW coverage offered by the rental company.
This type of coverage only applies in specific situations. Such as vehicle theft, civil disturbances, natural disasters, collisions and vehicle damage.
Some situations, including drunk driving, are specifically excluded from the damage coverage of rented vehicles.
Most travel insurance providers exclude some types of vehicles. They will not sell damage coverage to rental vehicles for motorcycles, vans and campers.
Generally, you cannot buy damage coverage for rental vehicles separately. Such coverage is usually included along with other types of travel insurance.
You can request a quote for a travel insurance policy directly from an insurer. There are several companies such as Travel Guard, Travelex, HTH Worlwide or MH Ross Travel Insurance Services.
Online insurance companies such as SquareMouth.com, TravelInsurance.com or InsureMyTrip.com are also available.
Personal Automotive Coverage
Read your car insurance policy or call your insurance company. To find out if your car policy includes coverage for damage to a rental car.
Some countries require that car insurers provide this coverage.
If your policy covers the damages of the car rental. You do not have to pay your car rental company for CDW coverage when you rent a car.
Be sure to check exclusions, such as car rental outside the country that issues it and car rental in uncovered countries.
It is possible to use your current car insurance to cover the rental, however, there are some considerations you should make.
Your own car insurance premium could increase if you have to claim when you rent. Additionally, many of these policies do not cover damage or theft, third party liability or medical costs.
Another detail, although it seems a good way to save some money. The potential increase in annual premiums can be more expensive than paying insurance when renting the car.
Agency CDW rejection
As we mentioned before, credit companies sometimes offer CDW (collision damage). If the driver / lessee is willing to reserve the car in advance and use his credit card to do so.
To activate the credit card CDW it is necessary to refuse the rental agency CDW.
In case the car is damaged. The credit card CDW comes into play. Only after your auto insurance policy has covered its limit. Following the terms as detailed in the coverage of the applicable policy.
What costs are not covered by CDW insurance?
The waiver of collision damage only refers to damage to the rental car in question. The CDW is a type of collision coverage (if purchased at the rental agency).
In the event of an accident, your personal car insurance company will handle the liability of the claims against you.
In case you are found guilty in an accident. Your insurance pays for the damages, as well as the costs for the other driver and the vehicle.
Precautions when renting cars
To sell auto insurance coverage a person must have a P&C license ( property and casualty ), or property and accidents. Any person without a license can sell an exemption.
Do not rely on collision damage or CDW advice from agency staff, they may not be qualified on the subject of insurance. It is important that you call your vehicle insurance agent.
A car rental contract is a mandatory contract. Even if the person who rents the vehicle does not read the fine print. Once the contract is signed, the lessee of the vehicle is always responsible for any damage.
It is important that you make sure you know the scope of the contract, if your liability is limited or unlimited. By its nature it doesn’t matter who is to blame. For that reason it is important that you evaluate the risks of not taking CDW insurance.