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Car Rental Insurance Rundown

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If you’re renting a car this holiday season, you have more choices than ever before. What hasn’t changed is the importance of protecting yourself with the right type and amount of insurance, according to the Insurance Information Institute (I.I.I).
Long gone are the days of simply renting a car by the day or week from the closest established rental car company. Now you can rent a car by the hour, from almost any location, or even use a car-sharing service to rent someone else’s personal vehicle.
“When it comes to car rental insurance, the more things change, the more they stay the same,” points out Jeanne M. Salvatore, senior vice president and chief communications officer for the I.I.I. “We have for years recommended consumers make two phone calls before renting a car. One to their insurance professional, and the other to the credit card issuer for the card being used to pay for the rental. That advice is still spot on and remains the best way to make sure you are properly protected.”
In order to make the best decision regarding your coverage, make these two calls:
1-To Your Insurance Professional
If you own a car, find out how much coverage you already have on it. In most cases, the insurance and deductibles provided by your auto policy would also apply to a rental car, providing you are using the car for recreation, not business. However, if you have dropped either comprehensive or collision on your own car as a way to reduce costs, you will not be covered if your rental car is stolen or damaged in an accident.
Check to see whether your insurance company pays for administrative fees, loss of use or towing charges. Some insurance companies provide an insurance rider to cover some of these costs, which would make it less expensive than purchasing the coverage through the rental car company. Keep in mind, however, that in most states “diminished value” (the reduction in a vehicle’s market value that occurs after a vehicle is damaged and then repaired), is not covered by insurers.
If you do not own a car and are a frequent renter, ask about a non-owner liability policy. This would provide liability insurance when you either rent or borrow another person’s car.
2-To Your Credit Card Company
Most credit card companies provide some level of insurance for rental cars—to find out the details of what is covered, call the toll-free number on the back of the credit card you will be using to rent the car and ask them to send you coverage information in writing. In most cases, credit card benefits are secondary to either your personal auto insurance policy or the insurance offered by the rental car company.
Insurance benefits differ widely by both the credit card company and/or the bank that issues the card, as well as by the level of credit card used. And they generally do not provide personal liability coverage. Some credit card companies may provide coverage for towing, but may not provide for diminished value or administrative fees.
By law, rental companies must provide the state-required amount of liability insurance. Generally, these amounts are low and do not provide much protection.
RELATED LINKS
Thanks to iii.org Video: Rental Car Insurance, https://www.youtube.com/watch?v=i1ei7wQqibA

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