Please sign in to post.

NY Times: Do You Really Need Rental Car Insurance

A lot of questions on the forum about this topic. Here's and interesting article by the Frugal Traveler "8 Things to Know." Doesn't answer all the questions but points us in the right direction.

Posted by
2916 posts

I saw the article, and found it interesting. But it's not as helpful for outside-of-US rental.

Posted by
4137 posts

Not meaning to start a food fight over this , but I found the article spot on . The principles involved in the article are pretty much identical to what goes on overseas in my experience . I always take the insurance products offered by Hertz or Avis , or whomever I'm renting from , the peace of mind is worth it to me . I always take the buy down of the excess ( 0 deductible ) , it's very easy to damage a car ( or have it damaged through no fault of one's own ) and going through the kind of hoops the rental agencies and third party insurers invoke , is unappealing to me . A damaged wheel ? , or a dented fender ? , I just walk away , with a smile of course . The cost of the insurance is part of the cost of the rental as far as I'm concerned

Posted by
9363 posts

I'm with Steven, I will buy the car rental's insurance, particularly the CDW, when out of the country. I have learned the hard way not to trust credit card insurance, and this article does a good job of pointing out the pitfalls - difficulty in obtaining documentation that you need, a change of mind on the part of the rental company's damage people, and on and on. It's just not worth the hassle to save a few bucks. And of course, in some places, credit card insurance won't cover you, nor will your home car insurance.

Posted by
7049 posts

I got hammered for not having the rental car damage insurance when driving in northwest Argentina. The Avis rep looked over the car with a fine-tooth comb and found every single ding, scratch, blemish, etc. from driving on non-paved roads - and this was largely on the undercarriage of the car, nowhere readily visible or apparent. The worst thing was that the door was severely damaged (not dented but could not easily open) after being almost blown off in a very windy area in the Andes (my fault, should not have opened that door at all but I didn't realize how flimsy it was). I just received the bill and there was neither time (or better Spanish language skills) to dispute it as the car was dropped off and we had to hit the airport fairly quickly thereafter to catch our flight. I had to pay whatever they said the damage was worth - end of story. It was silly to rent a dinky Peugeot on some of those roads, even though a 4WD would have been overkill. The only reason I didn't get insurance was the rental was very expensive "as is" and I hedged on not having any damages....wrong!

Posted by
19052 posts

I once went to my credit card's website and read the conditions of insurance. Seems if there is a claim, you have to pay the rental car company first, then try to collect from the credit card company, and you have to provide them with any and all documentation that they might required. Imagine trying to communicate with a car rental company in Italy, in Italian (how much do you know), asking for some documents that have a different name in Italian.

Remember, credit card companies don't make money by paying out money.

Posted by
2916 posts

I've never bought the rental agencies' CDW in France in 30 years or so of travels, and always relied on credit card insurance. I figure I've saved between $5-10,000 doing that. Having read a lot of info on this recently, I also just got an Amex card, and in the future will rely on their insurance at $25/rental. Unlike MC and Visa, their insurance is truly primary.

Posted by
1157 posts

"Remember, credit card companies don't make money by paying out money"

But instead you prefer to put your trust (and money) in a car rental company?

It is funny that the car rental company will advertise that they are selling you "insurance", but in the fine print, they clearly state that the CDW (or super CDW) is NOT insurance.

The car rental company puts on layer upon layer of charges to make extra money. People fear the off-chance they will get a flat tire and have to pay $100 to replace it, so they will often pay up front almost double that for the apparent coverage. However, if you read the wordings carefully, tires and windshield are often excluded anyways. Same with the off-roading situation with Agnes. She could have purchased all the high priced CDW (and rented a 4WD Jeep), but the rental contract wordings probably provided that any driving off of paved roads will void the protection.

Anyways, people need to do and pay what makes them feel comfortable and this link summaraizes everything you need to know:

https://www.ricksteves.com/travel-tips/transportation/car-rental-cdw

Posted by
3586 posts

I have always thought that the insurance offered by the rental companies is outlandishly expensive. And that was before I even realized that tires and windows are excluded. It usually comes close to doubling the cost of the rental. We have the Amex Premium insurance for rentals outside of Italy. In Italy we rely on our Chase Visa coverage. We have had occasion to make claims on both. Both were handled with no difficulty. I knew I would need documentation and got it at the time I turned in the car. No need to communicate in a foreign language. With Amex claims, they put the charges on hold while they process the claim, so you do not front the money. I know other people may have had other kinds of experiences, but that was ours.

Posted by
7049 posts

She could have purchased all the high priced CDW (and rented a 4WD Jeep), but the rental contract wordings probably provided that any driving off of paved roads will void the protection.

That certainly gives me something to think about. Unfortunately, I wasn't even off-roading "for fun". These were the "roads" in that part of the country. To get from A to B required non-paved roads with no alternatives. The rental fleet was passenger cars, not just 4WD trucks (I don't even remember seeing a 4WD truck in Argentina, come to think of it).

I'm going to southeast Utah in a few months and don't know what to do about insurance. Some non-paved roads will be inevitable but they're not worth the trouble of a 4WD (it would be overkill). I don't think there is any insurance product that will truly cover body/tire damage by road rocks/gravel - it's all on me.

Posted by
4137 posts

" It is funny that the car rental company will advertise that they are selling you "insurance", but in the fine print, they clearly state that the CDW (or super CDW) is NOT insurance. " Maybe I'm missing something here . What is it then ? I'm fortunate in that I've never had an incident that resulted in major property damage or physical injury , but I've had a few close calls and a couple of tire damage issues ( When I first started driving in the UK ) . The super CDW covered the glass and tires ( Admittedly not a good value on that ) but certainly covered all physical damage to the vehicle . So , what is the CDW then ?

Posted by
2916 posts

It's really a matter of semantics, Steven. CDW is collision damage waiver; the rental agency is agreeing to waive any damage claims if you pay for the coverage. It can be looked at as a form of insurance even if it doesn't meet the definition of insurance. Kind of like when a company doesn't have liability insurance; they can be called "self-insured." But it's not technically insurance.

Posted by
1157 posts

Just read Rick Steve's article for explanation for why CDW is not insurance. You can google and get a more detailed explanation. In a nutshell, it is a contractual waiver not insurance because car rental companies are not insurance companies and cannot legally sell insurance.

Different car rental companies all have different wordings. And over the years, car rental companies have added layers of fees to scare you and to make more money. Twenty years ago, I recall I only had the single optional CDW charge for the damage protection. Now, the CDW requires that you have to pay a big deductible in the event of damage. If you want to avoid the deductible, you have to pay the additional optional fee for "super CDW" (also known as "excess" or "no deductible" insurance, there's that word again). And some car rental companies are starting to add a third optional fee on top of CDW and Super CDW, to cover tire and windshield damage.

Do the math, if you buy all the optional car rental "insurance", you probably end up paying more "insurance" to cover the risk of a flat tire on a rental car than the risk of a heart attack while travelling. Who profits?

Just be aware that there are less expensive options out there e.g. credit card protection, third party traveller's insurance, your home car insurance may already provide you with rental car damage coverage. You should talk to your insurance agent.

In the end, buy whatever makes you feel comfortable. But always read the fine print.

Posted by
4137 posts

So , even if it does not meet the technical definition of insurance , the de facto result is the same - it abrogates the renter from paying for damage to the vehicle . Seems a bit of an arcane and meaningless interpretation under the circumstances . I appreciate what you are saying Robert , but whether the company carries actual insurance , or self insures has no bearing on the renter .

Posted by
4137 posts

I always read the " fine print " , As I previously said , it is evidently not a good value for a tire , but scrape up the side of a car on a hedgerow in Cornwall , which is fairly easy to do , and the body damage will far exceed the cost of the insurance

Posted by
4137 posts

I'll add one other example - on my last several rentals ( all with full insurance - Super CDW , personal liability , tire and glass , etc , etc , . ) my average daily rate from Avis was about $ 100 USD / day . Given that the insurance would account for half of that figure or $ 50 / day , a week's rental was $ 350 for insurance . Everyone has to decide how much the money is worth it relative to the potential loss . For me , peace of mind and being able to walk away if there is a problem , supercedes the insurance ( or whatever you care to call it ) cost . As Lee says , you can chance it , but you had better be prepared to deal with the consequences if you do . My motto about this in the final analysis is " How lucky do you feel ? "

Posted by
1157 posts

"How lucky do you feel?" And, how much are you willing to pay to feel safe?

That is the driving force behind the whole insurance business.

CDW only deals with damage to your rental car. Liability insurance (you hit and injure somebody and he makes a claim for his injuries) should already be included irrespective of the CDW; this is usually required by law.

$350 for one week of car damage protection. How much did you pay for travel medical coverage?

If you have the protection by another (cheaper) way, then why pay more.

Posted by
4137 posts

" That is the driving force behind the whole insurance business. " Certainly no argument about it ! I'm no fan of insurance companies , but dealing with them is an unfortunate fact of life , unless one is living off the grid in Alaska ; --) As far as the medical coverage , I can't answer that , because it's part of the Travelguard policies that I use to cover my trip ( medical and evacuation etc ) From the tenor of your remark , I interpret that to mean that the auto insurance is not a good deal price wise , Again no argument - but relative to the cost of the trip , it's acceptable to me . ( Travelguard 's policy , as an add on is far less) . I'm pragmatic about this and am far more comfortable not having to rely on a third party insurer to cover me , after settling ( as Lee stated ) with the rental company . BTW - in some countries , you don't have a choice about CDW , Italy is one

Posted by
7049 posts

Can anyone recommend what is the best approach to insure against travel on non-paved (but decently maintained) roads? My current (personal) car doesn't have collision insurance because it's frankly too old so I dropped it, so that's a consideration.

I'm going to Utah and am weary of getting some blemishes on a midsize passenger car (2WD rental). I'll be driving on non 4WD roads and will avoid any that are in poor condition, but some will be unpaved (it's hard to judge condition until I'm actually there). Any potential damage would likely be from gravel and rocks - anything from scrapes to undercarriage or minor dents on the lower portion of the car. Unfortunately, I cannot afford $100 per day for a car rental. I'm sure the rental car company will try to scare me into renting a 4WD jeep which would not be worthwhile for the little driving I will do on roads that aren't paved. If anyone has advice, please PM me or post it here for everyone's benefit.

Posted by
1157 posts

I am glad you brought up Italy!

Rent a car in Italy where the government requires basic CDW to be mandatory and rent the same car without the CDW from the same car company in France, and you will probably find that the total rental price is almost the same for both! The CDW and optional coverages are just clever ways for the car rental company to earn more profits. So, it pays to check out other options.

Posted by
1157 posts

Agnes

Are you talking about driving your own car or a rental car?

Renting a fancy 4WD Jeep may give you the prestige of driving it, but the off-pavement prohibition may still apply! That is why reading and understanding the rental agreement is so important.

In either case, talk to your insurance agent or call up the car rental company to get complete clarification as to what you can and cannot do and what is covered.

Posted by
7049 posts

No, I only mentioned the personal car because one's personal insurance covers their rental (at least in part). I said specifically that the collision part is currently uninsured on my personal car, so that "gap" would transfer over to any rental.

Posted by
1157 posts

Agnes,

call the car rental companies and discuss with them about going off-road before you go on your trip. Don't assume that renting a 4WD from a conventional car rental company will allow you to do so. You may find that you will not be covered regardless of buying all the additional expensive super duper coverage. If they tell you that you are covered, try and get it in writing or at least point it out in the agreement that you are covered. Otherwise you may be liable for any damage.

You should search for special off-road vehicle rental companies. For example: https://canyonlandsjeep.com/
I would assume that they rent specifically for trail use, but then you are paying about $200 per day. Call them to find out what is covered or not.

Edit: There is a lot of discussion about car rentals for off-road use in the Tripadvisor Utah forum:
https://www.tripadvisor.ca/ShowTopic-g28965-i411-k5748267-Unpaved_roads_car_rental-Utah.html

Posted by
7049 posts

I meant a simple gravel road - not back country or slickrock or anything requiring an ATV. I never intended to rent a jeep, only a passenger car for mostly highway/paved road travel and maybe some smaller roads that are "well maintained" (whatever that means) and accessible for passenger vehicles.

I was going to drive the Burr Trail from Bull Frog to Boulder; it crosses over Capital Reef and is unpaved in that section and paved elsewhere. I was also considering Hole in the Rock Road by Escalante but it seems a bit too rough for my liking, although other people have reported small passenger cars going over it at slow speed with no issues. I've gone to Chaco Canyon in NM on a pretty rough gravel road in a passenger rental - thankfully, I drove slow and nothing happened except the car got dirty from dust.

I'll check out the Tripadvisor link - thanks a lot!!!

Posted by
1157 posts

Read up. But you will probably just have to accept the risk and pay for any damage. Run the rental car through the car wash before your return it, and hope they do not find any big hole in the catalytic converter.

Posted by
4324 posts

Also remember if you're somewhere they decide is off-road or off-limits, and you break down, they won't come get you. Heck, AAA may not come either. It's all in the fine print.

There was just a story on the TV news that Hertz/Dollar has a class action suit in California for charging people for insurance they specifically declined. Hard to imagine!

Posted by
26834 posts

I have some experience driving regular passenger cars on unpaved roads in the western US. Given the no-unpaved-roads policies of most car-rental companies, I think it's a matter of swallowing hard and being careful. There's no sense worrying about the cost of losing a tire, because even if the CDW would protect you (it won't if you're on an unpaved road), it would cost far more than the tire if you're renting for a week.

I have, in fact, lost two tires. I was belatedly warned that roads going past active mines can be especially dicey, because freshly crushed (sharp) rocks may fall off the ore trucks. I was told it helps to drive at 20-30 mph even if the road is well graded and seems to support higher speeds.

What's also possible, and far more expensive, is getting stuck and needing to summon a tow truck from a great distance. That shouldn't happen on a gravel road. Undercarriage damage from hitting a large rock is likely to be very costly as well. You can reduce the chances of that by driving slowly. Beware of non-graveled roads with high centers!

Don't follow another vehicle too closely, and slow down if another car approaches. That should reduce the chance of windshield damage from rocks or debris kicked up by the other vehicle.

If you're driving on a narrow road with brush growing right beside it, it's possible to lose a hubcap. While that doesn't affect the drivability of the vehicle, hubcaps are surprising costly to replace. If you hear brush scraping a tire, stop and check your hubcaps if it's safe to do so.

It's helpful to stop at Park Service or Forest Service offices before setting out on any unpaved road to check on current conditions. Heavy rains can turn a good unpaved road into a terrible, risky mess.

If you're offered a choice of rental cars, choose the one that sits higher off the ground. And remember, it often costs more to repair a more expensive car, so that free upgrade might not be such a good idea.

Posted by
7049 posts

I'm not a worry-freak. I'll take my chances - if whatever insurance they offer has tons of exceptions for the things I'm looking for, I'm not about to pay a boatload for nothing. I'll just cross my fingers and drive slow. Lots of passenger cars go on unpaved roads and nothing happens provided the road isn't in bad condition due to rain, mud, sand, etc. While a car can certainly break down due to heat etc, I'm doubting an almost brand new rental car will suddenly break down on me for no reason...I'll take the risk. Blowing out a tire and needing a tow truck would be the worst - very, very expensive. Maybe I should look into AAA for that possibility.

I suspect not even AMEX insurance (primary insurance $25 flat fee) would help here, would it?

Posted by
3586 posts

re: being charged for insurance you specifically declined
Well, phred, I might have found it hard to believe, until it happened to me. Hertz at the Catania airport did exactly that. The contract was mostly in Italian, so they probably got me to initial acceptance, despite me clearly stating I didn't want insurance from them. When I tried to complain, Hertz in the U.S. told me they are not the same company. The email address provided for customer service by Hertz Italy didn't work. End of story. What sleaze balls!

Posted by
1157 posts

Agnes, it will save you on CDW etc. and should cover you if you back into a Prius in a paved shopping mall parking lot. Chances are it will have the same non-paved road prohibitions. Call Amex!

Rosalyn, that is another reason why I would prefer to deal with my credit card company which I have had a relationship with over 30 years than with a one-time foreign car rental company. EDIT: In Italy, the basic CDW is mandatory. If that is what was included, you had no choice. And what you paid was probably no more or less than in another nearby country for the same car rental without the CDW. On the other hand, if they added in the "super CDW" against your wishes, then that would be wrong.

Posted by
19052 posts

"But instead you prefer to put your trust (and money) in a car rental company?"

No, I have a simpler solution. Don't rent a car. Remember, we're talking about Europe on this website. Unlike the US, where you can't go anywhere without a car, Europe, and in particular Germany, where I do most of my travel, has excellent public transportation.

In 15 years (almost 150 days) of travel in Europe (Germany, mostly, plus a little in Italy, Austria, and the Czech Republic, only one time did I find someplace I wanted to go to that I couldn't get to without a car. When I found out what it would cost me to rent a car for the day, I decided that particular place was not worth the price to get to.

For the last 10 years, for every trip to Europe, I've investigated the cost of going by rental car instead of public transportation, and I've always found the cost of a rental car (even w/o CDW) to be twice or more the cost of using public transportation.

Traveling in the US is a different case. It's almost impossible to get anywhere without a car, and most US insurance policies cover rental cars as well. I often rent a car when traveling in this country, and I never take the CDW. About 20 years ago, I parked in a parking garage next to a pillar (so no one could bang the door), then forgot it was there and took off the mirror backing out. My insurance company took care of it, but it was in this country and all in English. I did have to pay the deductible I would have had to pay with my own car, nothing else.

Posted by
437 posts

@Lee. Renting a car buys freedom that trains simply cannot provide. The cost includes insurance and parking as well as rental fees, tolls and gas. Not renting a car incurs an opportunity cost that is not as easy to compute but going when and where we please is the essence of a vacation, following a train schedule and route is not our choice.

Drive safely and enjoy the trip!

Posted by
3586 posts

Just to be clear . . . I have been renting cars in Italy since 1984 (you know, back in the last millennium) on every one of our 16 trips there, and I know all about the mandatory CDW. I was charged an additional $200 for insurance that I had clearly refused. The agent pulled a couple of other dishonest tricks, so I'm sure the culture of that particular enterprise is to soak the customer in any way possible.
Despite that really souring experience, I'm with Beth on the advantages of cars vs trains in many European destinations, not, however, big cities. To each his own.

Posted by
4137 posts

Car rental and sale businesses historically descend from those , who , before the advent of automobiles rented or sold horses . Certainly , many of the unsavory practices of yesteryear have followed along , as per Rosalyn's remarks . This should be informative - https://en.wikipedia.org/wiki/Hobson%27s_choice

Posted by
1157 posts

Seems a bit unfair to compare the horse rent-and-rest rotation policy of the deceased Thomas Hobson (which appears to be very humane) with the complexity of the modern car rental business. In any event, whereas Mr. Hobson forced his customer to rent the next horse in line, we do have the ability to select different rental companies and to select different coverage options. We just need to do a bit of reading to know what are the choices.

Posted by
1878 posts

I have driven in seven or eight countries in Europe, including England twice, Ireland, Portugal. I have used AMEX premium rental car coverage on most of those trips and have been lucky to not have to use it. The more experienced I get as a traveler (older, more risk averse) the more I look for ways to avoid renting a car—and gravitate toward trip itineraries that don't require it. It saddens me to say that though. Driving into a town of any size, it can be very disorienting and nervous making to find parking, find your hotel. We always seem to arrive at 5 p.m., the evening rush hour. Dropping off the car is always a hassle, even a lot of times when dropping at an airport (which you would think would be really easy). Currently planning a trip to Ireland and will be paying around $600 for a nine day rental, almost half of which is zero deductible CDW (credit card coverage does not work in Ireland). No one is forcing us to go to Ireland but given that's our destination, a car is highly necessary to do it right. The speed cameras in so many countries add a layer of stress, and you may have heard me complain how tiny the trunks are on some cars—forces me to travel with a smaller bag that I would like (a 22" bag has half the volume of a 25" bag, meaning 2X more frequent laundry). We will still rent cars selectively like in Ireland or Scotland, or the Dordogne in France where it's really essential. It's such a relief though to do a trip exclusively on public transit.

Posted by
3696 posts

I have rented for years and often did not take lots of extra insurance, and was lucky. A few times I did pay for it when I was sharing the cost and driving with others. I have recently used the Amex insurance but do wonder how good it would be if I had to use it.
I will continue to rent cars for my European adventures as that is how I like to see a country. If you only go point to point you can compare costs, but that is not how most people travel with a car. It would cost me a fortune to combine trains, taxis, and buses for me to stop at all the places I want to see. And I would not have the freedom and spontaneity that I love when I travel Europe.

Posted by
4535 posts

People typically make decisions based not just on cost, but also convenience, time spent and hassles avoided. When renting a car in Europe, I always get the full CDW coverage despite the fact that it is hugely expensive compared to the actual value it brings (in other words, it is a major profit margin for them). Why? Because to me the risk of damage to the car is much higher in Europe where streets are narrow, parking is narrow, and I am unfamiliar with the roads and signage. And because if something does happen to the car, I don't want the hassle of making international calls or emails and trying to hunt down certain forms in triplicate so I can get a claim approved through my insurance or CC. I'm paying a premium for the convenience and no-hassle. I also use my good 'ol local bank for the ATM and don't mind paying a few extra dollars instead of opening and managing new checking accounts.

But renting in the US, where communications are much easier, I am more willing to take a risk of the hassle if something goes wrong and decline the CDW.

The article correctly points out though, that everyone needs to understand what coverage and restrictions are in effect with their CC and personal insurance policy.

People may also want to consider that they probably incur the same risk driving their own car everyday. Most people don't file insurance claims if they get a flat or a chipped windshield. Those are just things that happen sometimes and you pay out pocket. I consider the risk equal when renting a car and have no interest or care to get CDW to cover it.