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(first published at elliott.org, image: Shutterstock)

 

When it comes to renting a car, it’s easy to get confused about your insurance needs. But it’s also easily avoidable — if you know what to look for.

I should know. I used to own a car rental franchise.

Here’s what it comes down to: Do some preparation before you book, read your agreement carefully, ask questions before you sign and you can prevent any surprises.

Before reserving

Compare car rental companies using similar car category for rates and rental policies. Book far in advance for the best rates and models, particularly in popular destinations. Rental rate guarantee periods may vary. Verify this information with each company so you’ll know how long they guarantee your quoted rated. Look for frequent traveler partnerships with airlines, credit card companies, hotels, and group and military discounts.

When you book

Select the right vehicle. Don’t get stuck with a compact car if you have 4 passengers and 4 pieces of luggage. If you need child safety seats or a GPS, ask what the charges are up front and reserve these items.

For airport rentals, include your flight number, airline and scheduled arrival time. This can protect your reservation if the flight is delayed, but make sure you understand the rental conditions. Is there a penalty for no-shows? Will they hold your car? Is there a fee for additional drivers and do their names have to be listed in the contract?

Before you travel

Check with your insurance company to see if your auto policy covers car rentals. Are you protected if the car is stolen, damaged in an accident or vandalized? And verify whether or not your credit card provides coverage when used to pay for the car rental. Check the extent of coverage; it may be secondary, restricted to certain types of cars, or applicable only to rentals under a maximum number of days.

When you pick up the car

Take the time to inspect the vehicle carefully. You should check with the car rental representative if you find a discrepancy on the damage report. Make sure the rep records the damages to your liking and notes correct mileage. Be sure lights, turn signals and systems are working.

When you return the vehicle

Allow ample time to refuel and return your car. Airline security measures add time to the airline check-in process. Clear out excess trash and debris or you could be charged a cleaning fee. Let the rental company know if you got any tickets, best to pay ASAP or you may incur fees and fines on top of the ticket.

Don’t take my word for it. I checked with Hertz, and a representative verified these proven strategies. She also noted that when it comes to international rentals, Loss Damage Waiver (LDW) for most European Countries comes with a deductible. But customers may opt for ‘Super Coverage,’ which eliminates the deductible. Got that?

One more thing: Mind that Fuel Purchase Option (FPO). If you do not wish to add this option, gas up close to the rental return location before return. If you don’t, the rental company will charge a “Fuel and Service Charge”. This charge is more expensive than street level fuel pricing and a hefty penalty fee is tacked on. FYI: if you do purchase FPO the rental company not reimburse you for any unused fuel. I would only recommend this option to those driving great distances.

And what do the insurance experts have to say about coverage? Jack Taylor, a professor of insurance law at Birmingham-Southern College, says a little research can take you a long way.

“Do your homework,” he told me. Begin by contacting your auto insurance agent and ask what they will cover via your existing policy and what they won’t regarding a car rental. Make sure you mention your destination — it makes a difference.

If you only have the minimum liability required by your state and the state you are renting in differs with a higher minimum, in the event of loss your insurance should cover you.

Ask if your company will cover that.

“Same thing with your credit cards,” Taylor also said. “Many will cover you if you use the card to rent the car, but ask about ‘loss of use’ too.”

Taylor noted that CDW (Collision Damage Waiver), LDW (Loss Damage Waiver) and PDW (Personal Damage Waiver) are technically waivers, not insurance. You may want the CDW if your own car policy does not have collision on it, but if you do buy it, ask if you will still be responsible for a deductible. Taylor thinks you might.

Personal Accident Insurance (PAI) covers you when you are hurt in an accident, but likely you have medical/dental coverage insurance already. Personal Effects Coverage (PEC) is for your personal items stolen from or damaged in your car. You likely have these covered through your homeowners policy.

“I don’t buy anything I already pay for,” Taylor says. “Why would you?”

If you have an accident or a problem with the car, contact the rental company immediately. Remember your safety is the most important thing and the coverage you have in place per your contract will play out. If you can, take pictures of any damage no matter how small; your credit card company or insurance company may want them.