Car Hire Insurance in the USA
Here at TripWheels we like to make sure our customers have as much information about their car rental as possible. There is much confusion and often some panic about the level and types of insurance required to hire a car in the USA. In this article we will set out to explain the insurances required, their meaning and purpose to bring some clarity to this area. This explanation applies to the USA as a whole, including the more popular destinations of Florida, California and Las Vegas and includes all suppliers, Dollar, Budget, Alamo and Avis etc.
The one element that most people are familiar with is Collision Damage Waiver or CDW. This is also known as Loss Damage Waiver or even Limited Damage Wiaver – LDW by some suppliers.
CDW is actually not an insurance but a waiver, it waives your financial responsibility in the event that the rental vehicle is damaged providing you are in accordance with the terms and conditions of the rental agreement. This basically means that you have not been drinking, speeding or driving off road!
CDW/LDW is included as standard for both of our packages at TripWheels.
The next one that has received a lot of publicity in recent years is Liability Insurance, often called Additional or Supplemental Liability Insurance – ALI or SLI.
This insurance provides up to $1 Million above the liability insurance included within the normal rental agreement which may vary according to state law. It insures you and all authorised drivers against claims and lawsuits made by third parties.
ALI/SLI is included as standard for both of our insurance packages at TripWheels
Formerly an optional insurance, Uninsured and Under-insured Motorist Protection requirements can vary by state.
UMP provides up to $1 million in the event that you, or your passengers are injured by a driver who is under-insured or uninsured.
UMP is included as standard in both of our packages at TripWheels.
Personal Accident Insurance is an optional insurance that can only be added locally at the desk on arrival.
It protects you and your passengers both in and out of the vehicle with medical coverage. It is intended for domestic travellers (USA citizens), renters coming from outside of the country should have their own travel insurance which serves the same purpose so the PAI is not recommended where travel insurance is held, but each driver should make their own decision.
PAI is not included within either of our insurance packages. You may be offered this insurance as an optional extra.
Roadsafe Assistance/Roadside Assistance
A newer package that has been put together by suppliers is called Roadsafe Assistance or Roadside Assistance. This is currently optional – but it’s use has merit depending on your circumstances. Currently, the following items are not included within standard rental agreements:
- Flat Battery (faulty batteries are covered)
- Damage caused by putting the wrong fuel type in the car (e.g. putting diesel in a petrol car)
- Broken Windows
- Tyre replacement (e.g. if damaged by hitting the curb. Covered if worn)
- Key replacement if you loose the key
- Roadside assistance if you lock yourself out of the car
- Damage to underside of vehicle if you are found to be driving ‘off-road’ which is not permitted
- Damage to the roof of the car if you place goods on the roof or drive under a low barrier etc.
- Damage to the interior (caused by spilling drinks, cigarette burns in seats etc)
- Damage to child seats
The rental companies have created a bundled package that includes all of these items, along with an ‘enhanced’ roadside assistance package. This ‘enhanced’ roadside assistance package is slightly confusing because mechanical assistance is included as standard within the normal package. The difference between that, and the ‘enhanced’ package appears to be the accepted response times. For instance they will respond if your car fails mechanically, but, what they are saying is that the response time will be faster if you do have roadside assistance.
This entire bundle is priced at around $5 per day, it can only be paid locally – direct to the rental desk (it cannot be pre-booked) and is not available as an add-on from any UK agents and therefore is subject to all local/state and airport (if applicable) taxes in addition to the $5.
Top Up Insurance
You can now take out an Insurance policy to cover these items, from the UK, ahead of your trip – a bit like Travel Insurance. You would have to pay out locally in the event of a problem, but then you could claim back the money on your return.
Coverage Generally Includes:
Reimbursement of up to £2000 for any physical loss or damage to the Rental Vehicle for which You are responsible under the terms of the Vehicle Rental Agreement, including:
- Physical damage to windscreens, tyres and undercarriage.
- Towing costs relating to the loss or damage.
- Up to £100 to cover the costs of locking yourself out of the vehicle
- Up to £300 to replace the key of the car if lost or stolen
If you are hiring a car for the occasional trip or trip of a lifetime and want to know that all eventualities are covered then either of these products is probably for you and you can take it out knowing that you are not being ripped off.
If, however, you hire a car in the US more regularly, you may view this differently. For instance, I have been travelling to the USA for over 20 years, and so far (tempting fate here!) I have not had a flat tyre/tire or smashed windscreen. If I had paid $5 per day plus tax for all of those years I would have paid out a lot of extra money. I am sure at some point (hopefully not too soon) I will have to pay out for a broken windscreen or lost keys or a flat wheel – but I firmly believe that I will still be in credit on balance! The majority of the rental cars in the US now are new or nearly new, certainly less than 30,000 miles, new cars and new tyres/tires are far more reliable now than years ago.
Having said all of that, if you are planning on a road trip around Yosemite and the Grand Canyon, or even just across the USA, it is highly likely that you will be travelling in some pretty remote areas. In this instance, it may be better to take the package directly with the supplier, then in the unfortunate event that you lose your keys in a river, or suffer a puncture whilst travelling around the Canyon, the rental company should respond in all haste. Having received your money directly, you should be given the benefit of their best service. If you were to take the UK insurance package, the company have not financially benefited from that, and you don’t want to run the risk that their attention could be less than enthusiastic.
So that is a run down of the various required and optional insurances and packages offered by suppliers. If you do accept and sign for any of the additional insurances or packages, then you are responsible for paying for them – it is vital therefore that you check and re-check what you are signing and if you are unsure at any point you should ask the desk clerk for clarification. Here at TripWheels we can usually get refunds for you for any over-charging or unauthorised charges but if you have signed to accept either PAI or Roadside Assistance then that is an agreement and we will not be able to help.
Most desks now have small screens that you page through and initial on screen as you go, do not rush this process as it is quite common that something you have declined suddenly shows up as accepted and if you sign you are stuck with it. We have written about what to expect on your rental agreement here.
Interestingly, our Alamo vouchers feature a 24 hour guarantee – if you are unhappy with any option you have purchased at the counter you can return to your nearest location within 24 hours to have the option removed and get a refund. It is also worth noting that many cars offered as part of a ‘fly/drive’ package do not include all the insurances, so on first sight the car may seem great value, until they hit you with a rather large insurance bill for options that are inclusive within our packages. It is also common for some agents to display very low rates on their websites only for the insurances to be added on at checkout.