Meetings & Conventions: Planner's Portfolio June
By Bruce Myint
TO ACCEPT OR DECLINE?
Personal auto insurance and credit cards offer protection
for rental-car drivers
Would you like insurance with that? Today’s
travelers often find themselves befuddled by the coverage options
offered by car rental agencies. Those options, in the form of
damage waivers, liability supplements and personal accident
insurance, often are costly and sometimes unnecessary, since many
customers already are covered by their auto insurance or credit
But you won’t hear that from the rental agent.
“You can’t expect the rental-car company to know what coverage a
customer already has,” says Richard Broome, vice president of
corporate affairs at Park Ridge, N.J.-based Hertz. “And customers
aren’t going to bring a copy of their auto insurance policies.”
To avoid any doubt at the rental car counter, says Broome,
customers need to find out what kind of coverage they already have
before leaving for their trip.
THE HOME POLICY
Auto-policy holders retain their normal coverage when driving a
rental car, according to a spokesperson with Bloomington,
Ill.-based State Farm Insurance, the country’s largest automobile
and home insurer.
Coverage can differ widely from one person to the next, however.
For example, those who lack collision or comprehensive coverage
won’t have it on the rental. State Farm only covers its U.S.-based
drivers at home, in Canada and in U.S.-owned territories; so buy
the rental insurance when you go overseas.
Ask your insurance rep if it is necessary to purchase coverage
from a rental agency. If so, agencies in most states offer loss
damage waivers (LDW) or collision damage waivers (CDW). For around
$20 a day, these shield customers from charges in case the car is
damaged or stolen.
Some credit card companies also offer rental car protection.
However, restrictions abound, particularly for business
While American Express’ personal and small-business cards
automatically offer free coverage, corporate cards do not,
according to a spokesperson.
American Express covers sport utility vehicles, but not trucks
or vans. And travelers in countries such as Australia, Ireland,
Italy, Israel, Jamaica and New Zealand are exempt from rental
Finally, American Express’ coverage only is available if the
cardholder declines the agency’s damage waivers and uses the card
to pay for the the total bill of the rental.
Just as with personal auto insurance, coverage can vary
dramatically, so it is worth contacting your credit card company
representative to find out what is offered.
It is also useful to ask if the coverage is primary or
secondary. Some credit card companies only will pay for repairs
that exceed those covered by the cardholder’s auto insurance. In
case of an accident, this could increase your car insurance
The bottom line: If a renter lacks applicable auto insurance or
credit card coverage, experts suggest purchasing a damage waiver,
since the daily charges are cheaper than the cost of replacing a
To protect drivers in case of serious accidents, some rental
agencies offer liability insurance supplements (LIS) or personal
accident insurance (PAI).
An LIS plan covers drivers in case they hit or injure a third
party. At Hertz, the amount normally comes to $1,000,000 per
accident for a fee of around $11 per day.
PAI provides benefits to the driver in case of injuries or
death, similar to health insurance. Typically, PAI costs around $5
per day. Many auto insurance policies cover liability and personal
medical claims. The lesson, once again, is to research pre-existing
coverage before walking up to the rental counter.
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