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Old 02-04-2024, 05:08 PM
 
Location: MD's Eastern Shore
3,701 posts, read 4,845,879 times
Reputation: 6385

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[quote=K12144;66387667]I used to have a friend who worked at a car-rental place once upon a time. The way he put it was, "You can use your own insurance if you have an accident, but your insurance will go up, and will that cost you more than buying the rental-car company's insurance would have?"

That seems to be the standard line because they need to "sell" it, so make people see the "chance" they are taking and, in their impatience, they wont take the time to think about, they sign up for the insurance and pay the fee.

One might as well say, "you know, if you drive your car and get in an accident, your insurance will go up you know, so best not to drive anywhere and take an uber/taxi instead". See how stupid that sounds? Same thing.

Bottom line is that driving is a risk. You have insurance to protect you. Might as well use it as your driving anyway, whether in a rental or your own.
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Old 02-04-2024, 07:45 PM
 
31,897 posts, read 26,938,579 times
Reputation: 24800
Quote:
Originally Posted by ncole1 View Post
How can one explain having to pay $30/day or more on a rental car? Some are even $50/day. That's equivalent to $1500/month. Are we really to believe that someone driving a rental car is 5-15X as risky as an owned car? If so, that would be equivalent to someone with a BAC over the legal limit!

What gives?
As noted vehicle hire companies charge what they do because various waiver coverage to some extent is a profit center.

That being said no one is forcing anyone to take said coverage. Those who have their own auto insurance usually are covered. There are also "non-owner" car insurance policies, these are for those who frequently drive vehicles they do not own thus don't have any sort of auto or liability coverage.

Finally there is also auto rental coverage often offered via CC. Coverage varies by policy but many are secondary, that is they cover what one's primary auto insurance does not. If driver does not have any sort of insurance then such coverage may become primary.

https://www.nerdwallet.com/article/i...-car-insurance

Just as people drive their own vehicles (or those belonging to someone else) without insurance coverage, people are free to decline CDW, LDW and whatever else a car rental place is offering. However doing so does come with significant risks. If driver him/her self is injured while operating said rental vehicle, and or they harm another person and or their property all bets are off. Car rental places may have some minimum coverage (liability), but it won't protect driver from being sued off face of planet by an injured party.


People have seen charges on their CC for damages or whatever associated with a rental. It doesn't matter if card then used has expired or even if said charges take card well over limit. Car rental place will get its money leaving account holder dealing with CC. If charges for damage are valid and nothing can be worked out CC will do what does to any other debt.
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Old 02-04-2024, 07:50 PM
 
31,897 posts, read 26,938,579 times
Reputation: 24800
[quote=marlinfshr;66388051]
Quote:
Originally Posted by K12144 View Post
I used to have a friend who worked at a car-rental place once upon a time. The way he put it was, "You can use your own insurance if you have an accident, but your insurance will go up, and will that cost you more than buying the rental-car company's insurance would have?"

That seems to be the standard line because they need to "sell" it, so make people see the "chance" they are taking and, in their impatience, they wont take the time to think about, they sign up for the insurance and pay the fee.

One might as well say, "you know, if you drive your car and get in an accident, your insurance will go up you know, so best not to drive anywhere and take an uber/taxi instead". See how stupid that sounds? Same thing.

Bottom line is that driving is a risk. You have insurance to protect you. Might as well use it as your driving anyway, whether in a rental or your own.
Virtually all car rental agents are salespersons. As such part of their job is to sell various extras including CDW, LDW, etc.... For most car rental places there are reward or other incentive programs for agents who meet or exceed targets. Even if that isn't so those numbers are almost universally brought up as part of CSR's annual report.
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Old 02-04-2024, 08:14 PM
 
78,347 posts, read 60,539,645 times
Reputation: 49634
Quote:
Originally Posted by ncole1 View Post
How can one explain having to pay $30/day or more on a rental car? Some are even $50/day. That's equivalent to $1500/month. Are we really to believe that someone driving a rental car is 5-15X as risky as an owned car? If so, that would be equivalent to someone with a BAC over the legal limit!

What gives?
Basic auto insurance has very low commission and profit levels a couple percent.

Rental insurance is OPTIONAL and thus has extremely high commissions. On some products perhaps well over half the amount paid.

It's literally like comparing what a 20 pack of red-bull costs at Costco vs. what they would charge at a rock concert per can.

What may help you:

Some credit cards might have some sort of rental car insurance coverage as a "feature", just make sure you understand how much and if it's liability (you hitting stuff) or full (also covers the car).

Lastly, if by chance you have car insurance it will typically have coverage from that and no need to buy. Give your agent a quick call to confirm.

All the best.
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Old 02-04-2024, 08:17 PM
 
2,050 posts, read 993,379 times
Reputation: 6199
Quote:
Originally Posted by markg91359 View Post
Your own car insurance should cover you...
Not everyone automatically has car insurance. Likely millions living in NYC and other metros fall under this umbrella.

I once went without owning a vehicle for over five years, it was a glorious time. I would occasionally rent a car for a weekend road trip or whatever, and decline their offer of insurance: it was a ripoff. My credit card already covered that liability.
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Old 02-04-2024, 09:50 PM
 
14,400 posts, read 14,289,908 times
Reputation: 45726
Quote:
Originally Posted by heavymind View Post
Not everyone automatically has car insurance. Likely millions living in NYC and other metros fall under this umbrella.

I once went without owning a vehicle for over five years, it was a glorious time. I would occasionally rent a car for a weekend road trip or whatever, and decline their offer of insurance: it was a ripoff. My credit card already covered that liability.
I suppose so. Where I live everyone owns a car. Glad your credit card covered you.
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Old 02-04-2024, 09:56 PM
 
Location: Knoxville, TN
11,424 posts, read 5,967,061 times
Reputation: 22383
They charge you that rate, because they can. They try to scare you into thinking you need it.

I rarely ever opt for loss damage waiver insurance. My insurance covers me. Some credit cards cover you as well.

It was a hassle the one time I had to go through my own insurance to repair a very lightly damaged rental car. It was so low that the front lip got caught on a concrete curb backing out and it actually separated the fender from the body. It was a hassle to go through all the paper work and coordinate with my insurance, but in the end, everything was paid for by my insurance. No big deal.
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Old 02-04-2024, 10:20 PM
 
Location: Vallejo
21,830 posts, read 25,109,733 times
Reputation: 19061
Quote:
Originally Posted by ncole1 View Post
How can one explain having to pay $30/day or more on a rental car? Some are even $50/day. That's equivalent to $1500/month. Are we really to believe that someone driving a rental car is 5-15X as risky as an owned car? If so, that would be equivalent to someone with a BAC over the legal limit!

What gives?
Yes, there's two main reasons you have to pay for rental insurance.

1) Under 25 typically rental companies require it. It's the last time I've ever paid for it.
2) Insufficient insurance. You need to have comprehensive and not just liability insurance. When you rent a car they check your insurance. If you don't have comprehensive, you will have to pay for the rental insurance.
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Old 02-05-2024, 10:09 AM
 
3,184 posts, read 1,657,476 times
Reputation: 6053
I think rental insurance is too cheap. Because assume you rented a car for 2 days and the cost of the rental car was only $50 and the insurance could be 20-30% of the cost. So for roughly $20/day you're getting insured while driving a $30k car and that may result in a crash that cost the insurance company $20k or more in collateral damage.

The problem in America is that accidents are too common and costly. If accidents are rare and driving is safe then insurance wouldn't be needed.
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Old 02-05-2024, 10:27 AM
 
14,400 posts, read 14,289,908 times
Reputation: 45726
Quote:
Originally Posted by MKTwet View Post
I think rental insurance is too cheap. Because assume you rented a car for 2 days and the cost of the rental car was only $50 and the insurance could be 20-30% of the cost. So for roughly $20/day you're getting insured while driving a $30k car and that may result in a crash that cost the insurance company $20k or more in collateral damage.

The problem in America is that accidents are too common and costly. If accidents are rare and driving is safe then insurance wouldn't be needed.
Well, not exactly. Cars would still get damaged in hailstorms, hurricanes, and forest fires. You'd still have to pay a premium for comprehensive insurance.
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