How to save on car rental insurance
When you rent a car in USA, the rental company will ask you how you want handle car insurance. You can use your own personal car insurance. Or you can you buy one from the car rental company itself. Some credit cards also have car insurance perks when you pay for the rental using those cards. Each of these options has its own set of pros and cons.
When you use your own personal car insurance, the usual limits, rules and deductibles of your policy apply.
When you buy insurance from the rental company, you purchase one or more of several services that they offer - different companies call these terms by different names - but they generally fall into coverages like Collision Damage Waiver (CDW), Loss Damage Waiver (LDW), Liability, Personal Injury Protection, Personal Effects Coverage etc. Buying all these services from the car rental company makes any claim process simpler since you don’t have to involve your own personal insurance company. The main drawback is that this coverage is expensive and the rates are per each day of your rental. So if you have an extended rental of a week or more, these rates will be a good percentage of your overall rental charges.
Some credit cards also offer some car insurance coverages. You automatically get these coverages when you pay for your rental with this card. Again read the fine print on what is covered and what is not. Credit card insurance coverages used to more liberal in the past. Many cards stopped offering this service and even among the ones that still do, fewer offer primary coverage.
There is a difference between primary and secondary insurance coverage. If you get primary coverage from a credit card, in the event of a claim, your credit card would pay first. Most credit cards that offer car rental insurance are actually offering secondary coverage. That means you still need a primary auto insurance policy in place. And you’ll need to exhaust those benefits before tapping into your secondary coverage. American Express offers a program that allows you to pay extra with your qualified credit card to receive primary insurance on a rental for up to 42 consecutive days. This is much cheaper than daily rates you purchase from the car rental companies. Currently this coverage costs just $25 per rental. This is per rental and not per day rate.
Here are details of the American Express program and how to enroll