Wednesday, July 28, 2010

Summer 2010

Many vacationers will be renting a car this summer, but often don’t start thinking about rental car insurance until they get to the counter. This can result in some costly mistakes. Faced with a number of choices, some renters either purchase all of the coverage, or they decline the insurance without knowing if they are covered by other policies. This can result in either wasting money by purchasing unnecessary coverage or having gaps in coverage.

Before renting a car, you should make two phone calls: one to your insurance agent or company representative, and another to the credit card company you will be using to pay for the rental car. 

Rental car insurance offers four important coverages:

Loss Damage Waiver (LDW), also referred to as collision damage waiver, is not technically an insurance product—it relieves or “waives” renters of financial responsibility if a rental car is damaged or stolen.

Liability Protection provides financial protection from lawsuits in the event you are sued following an accident involving a rental car.

Personal Effects Coverage provides insurance protection for the theft of items in your car.

Personal Accident Insurance will cover you and your passengers for medical and ambulance bills incurred by injuries in an automobile accident.


Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Although most auto insurance provides property, liability, and medical coverage, many states have different requirements. Here are typical coverages found in an auto policy:

Pays for damages you cause to other people and their property. Higher limits than what you currently have may be available.

Medical Payments:
Provides protection for the insured, family members, and passengers in the insured’s auto for injuries sustained in an accident regardless of who was at fault. Also provides reasonable expenses for necessary medical and funeral services incurred. Higher limits than what you currently have may be available.

Personal Injury Protection:
Provides coverage for injury, death, loss of services, and loss of income suffered by you, your covered passengers, or covered family members (for those who reside in states with no-fault insurance laws).

Uninsured Motorist Coverage:
Automobile coverage designed to provide protection for the insured if involved in an accident where an uninsured motorist is at fault. Limits usually match liability coverage.

Underinsured Motorist Coverage:

Auto coverage that pays the difference between the insured’s actual damages for bodily injury and the amount of liability insurance carried by the at-fault driver. Limits usually match liability coverage.

Collision Coverage:

Protects you from loss caused by damage to your auto by collision with another object or vehicle or the overturn of the auto.


Pays for the losses to your auto OTHER than collision. Included is damage or loss to your auto caused by fire, theft, glass breakage, falling objects, and vandalism.

Towing and Labor:
This endorsement offers reimbursement for the cost of having a vehicle towed.  Labor costs to repair a vehicle are not covered. Higher limits than what you currently have may be available.

Rental Reimbursement/Loss of Use:
Loss of use covers the daily cost to rent a vehicle while yours is out of commission due to covered loss.

Auto Loan/Lease Coverage:

Coverage may be extended for the difference between the unpaid amount due on the loan or lease of a new auto and the actual cash value at the time of loss.

Audio, Visual, and Data Electronic Equipment:

Tapes, records, discs, and other media can be included on the auto policy.

The coverages discussed herein are for illustrative purposes only.  The terms and conditions of your specific policy may differ from those described.  Please consult the provisions of your policy for the terms, conditions, and exclusions that apply to your coverage.