Nasty Truths about Car Rental Insurance You Should Look Out For

Car rentals are undoubtedly one of the most widely used services in the holiday season. Yet, this seemingly stress-free service has become the buzzword for unscrupulous players, shady pricing tactics and overpriced insurance policies that come hidden in shiny packaging.

Don’t fall for that glossy advert with a smiling family in a sparkling new set of wheels yet. It’s never as good as it seems. To make it worse, if you are holidaying overseas, then you could be at risk of being charged a lot more than what the financial risk is to the company.

If you are looking to a rent a car to help yourself and your family get around this holiday, then here are some of the hidden truths about car rental insurance that you ought to be aware of.


Price Gouging is Rampant

Almost every car rental company in the world will try to sell you A ‘Collision Damage Waiver’. It is called a ‘Loss Damage Waiver’ in some parts of the world. The funny part is that CDW isn’t insurance. At least, not technically. CDW covers you for damages that may occur to the rented car. That sounds pretty normal. The caveat is that they may sell it you for obscenely high rates. It is estimated that CDW can cost as high as $30 a day. That’s higher than the base price of the car rental itself. Be ready to cough out a lot more if you are hiring a premium car. On the contrary, if you buy coverage from an independent insurer, then it can cost you a lot less. Why, even your credit card can provide you with secondary coverage at no additional cost to you. The only advantage that you have is that you do not have to shell out a dime if you end up damaging the car. Just hand over the keys to the rental and kiss them goodbye. But that advantage comes at a steep price.

They Will Make You Pay For Not Buying CDW

Ok, so you are aware that the whole CDW thing is a rip off. You politely refuse to buy it despite the best hard selling, deep-throating sales pitch at the hire desk by the sales guy. Now, they hate you more than anything else in this world and they will try their best to make you pay for it were you to damage the car. You will encounter fees that are otherwise unheard of. There will be fees to compensate the company for ‘loss of use’ of the car. There will be ‘Processing fees’ for processing the paperwork. There will be fees for towing or retrieving the car from the site where it was damaged. There will be an amount that you will have to pay for compensating the company for the reduced resale value of the car after the repairs. In simpler terms, they will put out a whole laundry list of charges that you may have to pay making the ‘CDW’ appear like the best deal in the world.

They Can Overcharge on Fuel

Most of the car-rental insurance companies in the world have two types of fuel policies. You can either get the car on a full tank and return it with a full tank, in which case, you don’t owe the rental company anything on fuel. The second scenario requires you to pay for a full tank of fuel according to the going rate. This is trickier than the first because it is impossible for you to accurately predict when the tank is close to drying out and on more occasions than not, you will end up leaving some extra fuel in the tank and still pay for a full tank of fuel. In the first case, you will need to provide them with a receipt that proves that you filled the tank from a gas station close by. If you do not have a receipt, they will most likely refuel the tank themselves and bill you for it. The bill may be exorbitant. But it leaves you with no choice except to pay it.

The Age Limit

The US doesn’t impose age restrictions on car renters. But in many parts of the world, there’s a maximum permitted age for renters. What’s more important is that you be aware of this age restriction when you sign up for any car rental service on their website. It is not uncommon for car rental companies to not reveal this restriction to renters when they sign up and then pop them a surprise when they reach the rental office to pick the car. The only option you may have is to look for another company (higher last minute rates) or be stranded.

So, the next time you are looking to rent a car, consider your options, speak to them upfront about any phony fees or hidden charges and most importantly, be aware of CDW charges.

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