Renting a Car

Renting a car soon? Are you going to get the rental coverage that is offered?  At AIC, we are committed to providing you with the knowledge needed to make a decision.

A common question when people are renting a vehicle is, “Do I need buy the rental company’s car insurance?”  The answer is, “It depends.”

First, let’s discuss the coverage being offered:

• CDW (Collision Damage Waiver) – provides coverage in the event of a collision or damage
• LDW (Loss Damage Waiver) – covers loss of use
• Liability Coverage

The rental companies have made some changes in the rental agreements that extend all the protection of the interests of the rental company and not the driver or person renting the vehicle. In addition, rental companies often value their vehicles at full retail value, which can be much more than the bluebook value, so your personal auto policy (PAP) would fall short of paying the full amount in a total loss.  Drivers who select and pay for this coverage are insulated from the rental car firm coming after them and collecting for damage to or theft of the rented vehicle, as well as towing expenses, storage and administrative fees, and “loss of use” charges associated with an accident.

Here are some recommendations:

• If you do not have full coverage on any of your personal vehicles insured, then you should always take the CDW and LDW options.
• Liability will extend from your policy, so this optional coverage is typically not necessary.
• LDW can help alleviate problems, so it may be worth the convenience, regardless of insurance company.

Below are our carriers and what is recommended when renting a vehicle:

• Auto-Owners – full coverage on at least 1 vehicle and have the Auto Plus Endorsement
• Frankenmuth – full coverage on at least 1 vehicle, also recommend LDW
• Michigan Insurance Company – purchase the CDW and LDW
• Citizens – purchase the CDW and LDW
• Progressive – purchase the CDW and LDW

Another helpful tip: Check with your credit card company for specifics because certain companies can provide automatic coverage for the CDW and LDW.

*** Note: The above information only applies to the US, US Territories and Canada. ***
We are here to help answer any additional questions you might have regarding this or any other related matters.