My friends Bob and Donna ignored my advice and paid for CDW coverage on a rental car. I’d say that was the wrong move, except that they got into a minor accident and the coverage saved them some trouble and money.
Still, I’m not going to recommend buying the CDW (collision damage waiver) from a car rental company. If you’re not comfortable with the coverage provided under your personal car insurance and your credit card company, there’s an alternative.
For our recent European trip, I bought a renter’s collision insurance policy from TravelGuard. For $9 a day it provided $35,000 worth of collision coverage with a $250 deductible. That was about half the rate with a much lower deductible than the car rental agency was offering.
Normally, I don’t bother with the CDW at all because I’m satisfied with the coverage provided by my own auto insurance and my credit card. I’m also mindful of the many warnings from consumer advocates that the insurance sold by car rental companies may duplicate coverage the renter already has.
Still, I was nervous about driving in Europe and I wanted to lower my liability in case the vehicle was damaged. For once, I wasn’t comfortable with the limits of my own auto policy, which has a $500 deductible and provides coverage only up to the value of my own car. The credit card coverage adds another layer, but it’s secondary to the auto insurance policy.
There are other reasons to buy supplemental insurance. Your auto insurance and your credit card may not cover rentals in some countries and they may exclude luxury vehicles and SUVs. Wading through the fine print before a rental and arguing over it afterward are not my ideas of fun.
Still trying to figure out how to insure your next car rental? The Federal Trade Commission has some good, generalized advice about car rentals.
And remember, you have a lot of options.