Understanding Car Rental Insurance: What You Need to Know Before You Book

If you love to drive and rent a luxury car, then you may also think once about any damage. It may not have been caused by you but by any other mishap. You might also be aware of the term insurance. But do you know about rental car insurance? 

Yes, it is precisely what you are thinking. You can also get insurance for a rented car. Don't worry if you don't know much about it.  We are here to help you find the best solution. In this article, we will explain rental car insurance and its types. Let's dig into the details!

Car rental insurance is a coverage that financially protects you against any theft,   damage, or accident of a rented car. It ensures that you are not personally responsible for the damage while driving a car. Coverage against any such incident differs depending on the type of insurance.

The need to buy rental car insurance depends on the several factors that are listed below:

• Your Auto Insurance: Many personal auto insurance policies include rental cars. However, you should know that you will only get benefits listed in your personal insurance policy.

• Credit Card Coverage: When you pay rent using your credit card, you may get its insurance along with your credit card if listed.

• Travel Insurance: If you have travel insurance, you may not need to purchase rental car insurance. Your travel insurance often covers your rented car. 

To understand these terms more clearly, you must know about the types of insurance that are essential to know before you book a rental car insurance. Every insurance covers different incidents. So let's come with us to learn about the types of insurance.

Rental car insurance works in the same way regular insurance works, that is, you pay the price first to buy insurance. It is an agreement in which both parties promise to cover losses and pay a certain amount. 

Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)

A Collision Damage Waiver, also known as a loss damage waiver, typically protects you if your rental car is stolen or damaged. It includes repairs to your rental car, excluding some parts and conditions. Tires, windshields, damage caused due to unpaved roads, and weather damage on private property are not included in the collision damage waiver. This insurance will cost you around 37 AED to 47 AED per day.

Liability Insurance

Liability insurance covers the damage you cause to other people’s vehicle, property or injury in an accident. The drawback of this insurance is that you can't get coverage for your vehicle, your injuries and any other passenger. It is mandatory in many regions and optional in others. Liability insurance costs you $40 on average.

Personal Accident Insurance (PAI)

Personal Accident Insurance provides medical coverage to you and your passengers in case of an accident. It doesn’t include the coverage of any money lost during an accident. This insurance costs you 11-35 AED on average per day. 

But don't buy personal accident insurance separately, as the medical insurance for your injuries is covered in life, health, and personal car insurance.

Personal Effects Coverage (PEC)

Personal Effects Coverage protects against any damaged or stolen belongings from a rented car, such as clothes or luggage. There are limits for expensive electronics; you might get half the price of their total in case of any damage. You do not need to buy it without a homeowner or rental insurance policy.

You have many options when buying rental car insurance. They are as follows:

• Purchase it directly from the rental car company: It is the most convenient way to buy rental car insurance and also the easiest method. This is because you can directly get it from the company you rent a car from, such as Phantom Rent A Car - Luxury car rental company in Dubai. You can ask them to add it to your agreement, though it does come with additional charges.

• Purchase Full Insurance Policy While Buying Personal Insurance: A full coverage insurance policy covers collisions and other policies for a rented vehicle. If you buy this, you don’t need to pay for an extra rental car insurance policy.

• Third-Party Insurance Policy: If you don’t have a personal car insurance policy and the rental company is charging more, you can try it from a third party. Often, independent insurance brokers offer the policy.  

• Credit Card Benefit: Many credit cards offer you an insurance policy if you make a reservation through a card. Check if you are eligible for the same.

Buying an insurance policy is a good and safe option. Especially when it comes to supercar rental in Dubai, you must know about them before booking car insurance. You need to know if you already have these policies. Proper knowledge of insurance, its types, coverages, and excluded parts is a must before booking. 

The wisest option is to buy car rental insurance from the company where you avail rental services. Besides, if you rent a luxury car, insurance is a must. Though such cars have advanced safety features, damaging them could prove expensive.