Check Car Insurance Before Trip

When you find a great deal on a car rental, the rate quickly increases when taxes, fees and options are added. The rate also increases dramatically if you buy insurance through the rental company.

The good news is that you're probably already covered by auto insurance or when you pay with a major credit card for the Collision Damage Waiver. Also known as Loss Damage Waiver, the CDW covers the cost of the rental car if it's damaged or stolen. To activate this coverage, you must decline CDW coverage from the rental company. Rates typically range from $10 to $20 per day if you buy it through a rental agency.

Rental companies also would be happy to sell you other insurance such as Supplemental Liability Protection, Personal Accident Insurance and Personal Effects Coverage. Again, you're probably covered for this under auto, home, life and health insurance.

Because most credit-card coverage of the CDW is secondary coverage, your auto insurance is considered the primary insurance. You should check with both the auto insurance company and the credit-card company to see what they cover. Ask about CDW coverage, liability, loss-of-use coverage, exclusions, how many days you can rent and what the limits are on dollar amounts. It's a good idea to get these policies in writing before the trip in case you have a problem.

I'm concerned about "loss of use" fees, which cover the car rental company's lost revenue while a damaged car is being fixed. Who decides how long it takes to repair a car? And will you be charged the more expensive weekday rates?

Rentals decline in many cities during winter, so companies probably won't be inconvenienced then if a damaged car is out of service. But I doubt they'd waive loss-of-use fees. Make sure you're covered for this through auto insurance or the credit card so you don't get an unpleasant surprise in the event of an accident.

If you have bare-bones auto insurance, make sure the credit-card company offers CDW. If you have a number of credit cards, call to see which offers the best coverage. Then use that card for the rental.

Be sure to ask about exclusions to coverage. For example, policies usually won't cover damage caused by off-road driving. Also, rentals of expensive vehicles, some vans, mopeds and motorcycles usually aren't covered. If you're traveling abroad, check to see whether you're covered while there.

Diners Club is my credit card of choice for car rentals because it offers primary CDW coverage. Since Diners Club is now part of MasterCard, it's accepted at more places than in the past. You also can accrue frequent-flier points and apply them to almost any major airline program. The downside to Diners Club is the annual fee of $95.

American Express offers primary damage and theft insurance on rentals when you enroll in the Premium Car Rental Protection program. If you feel you need supplemental insurance, this is worth a look. Travelers will be charged $19.95 or $24.95 per rental, depending on coverage, for rentals of up to 42 consecutive days.

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Tom Parsons is publisher of Bestfares.com: www.bestfares.com

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