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Do I really need extra insurance for the rental car?

Do I really need extra insurance for the rental car_

Summer season is quickly approaching and many people are starting to plan their vacations. Family outings often cost consumers a substantial amount of money.

Some of the expenses involve purchasing plane tickets, reserving hotel accommodations, and booking car rentals. When it comes to renting a vehicle, it is common for agents to urge the purchase of additional coverage.

Is purchasing additional rental car insurance a good idea?

The Federal Trade Commission (FTC) warns consumers to be cautious no matter how persuasive the agent’s sales pitch on accident liability is.

Why? Because this coverage can be expensive and overlap coverage you may already have.

The FTC indicates adequate liability coverage may already be available to you via any of the following:

  • Auto insurance
  • Homeowners’ insurance
  • Credit cards
  • Motor clubs

Another product the FTC suggests consumers to refrain from purchasing without consideration is the Collision Damage Waiver (CDW). While the CDW is not technically collision insurance, it promises the company will cover damages to the rental vehicle. In other words, this insurance prevents the company from collecting deductibles.

If you do opt to purchase rental insurance or a CDW, keep in mind that the policies can be voided by:

  • Driving while impaired
  • Driving negligently
  • Driving on unpaved roads
  • Driving out of the area stipulated in the rental agreement
  • Allowing an unauthorized person to drive the rental vehicle

Source: Federal Trade Commission, “Renting a car,” May 2017

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