When renting a car, one common question arises: should I purchase the insurance from the rental car company? The answer isn’t straightforward, but we can break down the options and provide guidance. A rental vehicle is treated like a temporary replacement for your own car, with your personal auto insurance limits and deductibles applying to the rental vehicle.

Understanding Rental Car Insurance

Rental companies may hold the renter liable for a ‘diminution of value’ charge when a rental car is damaged, representing the reduction in the vehicle’s market value due to its having been in an accident. With some types of damage, rental companies simply sell the damaged car for salvage and charge the renter the difference between the market value on the day of rental and the amount the car brought at the salvage auction.

The Loss Damage Waiver (LDW) is not insurance but a contract that releases you from responsibility for certain damage, for a fee. With the waiver, the renter will not be liable for any damage to the vehicle, repairs, diminution in value, or loss of use. However, the cost of the LDW can sometimes be as much as the rental car itself.

Alternatives to Rental Car Insurance

Some credit cards provide coverage for rental cars, but this coverage is generally not primary. This means you would need to use your auto insurance first before claiming anything from the credit card company. Unless the coverage is through a specific program, it’s not a good idea to rely on this credit card benefit.

Our best recommendation is to confirm with your agent that your personal auto insurance limits will apply to a rental vehicle and evaluate the cost of the Loss Damage Waiver to see if it’s worth it for you on this journey.

Original reporting: Johnson County Post (Overland Park) — read the source article.