Rental Car Insurance — Is your own Auto Policy Enough When Renting a Car?
Are you covered when you rent a car?
Summer is coming and if you’re thinking about renting a car for vacation, you will be asking the age old question – “Should I purchase the car insurance from the rental agency?” The answer is – IT DEPENDS. If you do your homework before you get to the rental counter you can save yourself a lot of money. It really won’t take much time because while you’re shopping for a good deal on a rental you can also be checking out the insurance situation.
Actually your first call for renting a car will not be to the rental agency but to your own insurance agency. You need to find out what the extent of your auto insurance coverage is. Most auto insurance policies will extend to rental cars but insurance experts recommend inquiring about two things – collision damage waiver and liability. Also if you’re letting your teenager do some of the driving of the rental car, ask your agent and the rental agency about coverage.
Collision damage waiver, or CDW (as it often appears on rental contracts) covers any damage to the car you are driving and liability covers damage you do to someone else. You need to ask your agent if there is a limit on your collision insurance. If you regularly drive an older car but rent a brand new luxury car (remember sometimes if a car is available you can upgraded to one of these types of cars for free), make sure your personal insurance policy will cover the whole cost of replacing the more expensive auto. If your policy doesn’t cover replacement cost and your car is worth $2,000 and you total a rental worth $20,000, you are on the hook for $18,000.
Frequently, consumers who drive older cars don’t carry collision at all. If this is your situation, you need to buy a policy at the rental counter or use a credit card that will give you this coverage. Consumer advocates recommend if you rent cars often you might get an estimate from your agent on a policy to cover you as it might be cheaper.
Credit Card Car Rental Insurance
Now about that credit card…. Many major credit card companies say they will provide you with insurance coverage if you use their card to rent a car. READ THE FINE PRINT because they do not always offer full coverage. Some cards only cover you if you rent from a certain agency, some limit coverage to certain type of cars, some you have to enroll in a program to get the coverage, some may only reimburse you the deductible you would have to pay under your regular auto insurance and some may only provide collision and comprehensive and leave you hanging for personal injury or property damage to others. READ THE FINE PRINT or call and ask the credit card company. Extra advice here – get it in writing what your credit card covers.
What about the insurance the rental car company offers? Again, you will need to find exactly what they cover. Some rental car agencies offer collision, liability, contents and life insurance and others offer some version of collision. Their collision may cover everything or may exclude such thing as tires, wheels and glass. Find out beforehand, so you are not standing at the rental counter feeling hurried and trying to make these choices. If you’re worried about stuff get stolen out your car – check your homeowner’s policy to see if you’re covered.
Finally, some people think if they use the rental company insurance and they have an accident, they are protected from a rate increase from their insurance company. You are not protected. According State Farm Insurance, if you are at fault, no matter who pays, your home insurance company can raise your rates.
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Leased Car Auto Insurance
If you are considering leasing a car you will still need to purchase your own auto insurance policy. When you lease, your vehicle belongs to the lease company. They want to make sure that their investment is covered if something happens to the car. They may also want you to have sufficient liability coverage in case you are at fault in causing an accident. This not only protects you from financial disaster, but it also protects the lease company from financial harm.
So whoever is financing your car will require you to buy both collision and comprehensive coverage for the vehicle. Collision covers damage to the car from an accident with another automobile or object and comprehensive is coverage for losses from something other than a collision with another car or object. They will generally want you to purchase: liability coverage $100,000 per person/$300,000 per occurrence, property liability coverage $50,000 and comprehensive and collision for actual value with no more than $500.00 deductible.
This may be more coverage than you would usually buy, so your insurance expense may be increased. In this case, you would benefit from shopping around to try to get a better rate. Insurance experts say you can nearly always get the higher level of insurance at about the same rate as you are currently paying by getting quotes from a few different insurance companies, seeking out discounts that you qualify for and adjusting your coverage.
In addition to the regular auto insurance, on a leased car, you will have to pay gap insurance. The “gap” is the difference between the amount you owe the leasing company and the amount the insurance company pays out if your car gets totaled. Cars depreciate in value quickly so when a car gets totaled there is usually a gap between the fair market value and the loan amount. The cost of gap insurance is generally rolled into the lease payments. You don’t actually buy a gap policy. Generally, the auto dealer buys a master policy from an insurance company to cover all the cars it leases and charges you for a “gap waiver.” This means that if your leased car is totaled, you won’t have to pay the dealer the gap amount.
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Cheaper Car Insurance Buying Tips
Find Cheaper Car Insurance
Trying to find cheap auto insurance can be tough. Being prepared can take much of the hassle out of the process. First order of business is to know what information you need to provide when soliciting quotes. The basic information you need to have available is as follows: your driver’s license number, year, make, model of vehicle, VIN# and the name of your vehicle finance company (if you are still making payments on your car).
Credit Scores and Car Insurance
Also, know your credit score. Insurance companies will not ask for this but they will consider it when making you a quote. People with low scores may pay as much as three times the amount as people with high credit scores. So check out your score and see if there is anything you can do to improve it.
You can check the Yellow Pages for agencies go online or ask friends for recommendations. Most companies have websites and will have you answer a series of questions to get a quote. It is in your best interest to answer the questions honestly – personal or car-related. Try to get at least five to ten quotes. It only takes a few minutes to get one.
Safety Features and Anti Theft Devices For Car Insurance Discounts
Also, if you have any of the following features on your car, include these with your other information. These features qualify you for a discount:
Anti-theft Devices
Airbags
Anti-Lock Brakes
Automatic Seat Belts
Window Etching
Multiple Cars
Multiple Policy
Here are a few other things you can specify when getting insurance quotes to bring the cost of your quote down:
Ask for a yearly policy instead of six-month policy.
Give the insurance company the least distance or time it takes to reach your job. The quicker you reach your workplace the lower your insurance cost.
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Used Cars May Be Cheaper To Insure
Save Money On Car Insurance with a used car
Here’s a great way to save money on insurance when buying a car. Consider buying a used car. Insurance is always higher on a new car than on a comparable used car. It is common knowledge, cars (and trucks, too) lose more than 20% of their value in the first year. Some vehicles lose as much as 40%. So if you buy used, you can save money on the purchase price and the insurance.
Note: I got a tip from a car insurance agent. Consider buying a used car for a young driver, and then only providing liability. The cost of the older car and the liability insurance may be much cheaper than trying to insure a young driver on a new car. The plan has some positives and negatives, but is one tip to provide affordable car insurance for young drivers!
The insurance is cheaper because it costs the insurance company less money to insure $30,000 car than a $15,000 car. If a used car is stolen, the insurance company will not have to spend as much to replace it as they would if the car was new. Additionally, auto insurance companies can charge you a lower rate for both collision and comprehensive coverage on a used car. All this adds up to a lower monthly premium for you.
SAVE TIME COMPARING AUTO INSURANCE WITH ONLINE QUOTE FORMS!
Some people would rather jump off a cliff rather than buy a used car. If you do your homework (I know you thought after you left school homework wouldn’t be an issue) a used car can be a great money-saver. On-line sites can give you lists of cars that: get the best gas mileage, have the lowest maintenance cost, are cheapest to repair and have the highest retained value. You can also look up the history of a used car online. Finally, always, always get the car checked out by a mechanic you trust. If you research all these aspects you will have taken a good portion of the risk out of a buying a used car.
To really save money on the insurance cost of used car, experts recommend when you think about insurance – think like an insurance company. Theft is a big issue with insurance companies. The National Insurance Crime Bureau (NICB®); list the 1991 Honda Accord, the 1995 Honda Civic and the 1989 Toyota Camry as some of the most frequently stolen cars in 2005. You would think no one would be interested in stealing these boring, everyday cars but they are. So you can see it pays to do your homework. Also insurance companies don’t like cars that are accident prone or cars that are expensive to repair.
Also check out a car’s model history. Some car insurance companies will raise their rates on a particular model because there are an unusually high number of claims made. Usually, insurers view imports less favorably than domestic models. Imported parts generally cost more than domestic and may be difficult to find. Therefore insurance companies charge higher rates for imported cars.
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The Cheapest Car Insurance For You!
What is the Cheapest Car Insurance?
Believe it or not, this is one of the most common searches on the internet. People search for: Cheapest Car Insurance. They also search for: The Best Car Insurance Company. Well, this is a question that no internet website can answer all by itself.
Car Insurance Rates depend upon many factors. So even though you see many commercials on TV or ads on the internet or a newspaper for the cheapest car insurance, rest assured that nobody can really make that claim for all of the applicants. Different companies weigh these factors differently, and the best car insurance company for one person will not work for the family down the street.
Some Factors That Impact Your Car Insurance Rates:
- Age and Driving History
- Zip Code Of Applicant
- How A Car Is Used
- Type Of Car - Some cars are cheaper to Insure
- Credit History - Yes, some insurers charge more for high risk credit.
- Passing approved Driver Safety Courses
- Anti-Theft Devices and Safety Features
- Type of Coverage, Deductibles, and Limits
So you can see that your car insurance premium will depend upon the coverage you want, your own individual age and health, and the type of car you drive. In order to get a true picture of the cheaper premium or best car insurance company, you need to compare car insurance quotes and plans.
Internet insurance quote forms make this job easy. For instance, the one that we uses runs on a secured server and participates in the Better Business Bureau Online Program for your safety. So if you would like to fill out a simple, 4 minute form, and then sit back and get competitive car insurance quotes, use the best website for insurance quotes online!
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