Don't let something like car rental insurance fees ruin your first day in paradise!

If you booked a rental car through the internet, you may think you got a great deal. Then you reach the rental car counter only to find that after taxes, fees and insurance you're going to end up paying almost double what you originally thought. Not a fun way to kick off your getaway!

Avoid Frustration - Don't Wait Till You Get to the Rental Counter to Figure Out if you Need Car Rental Insurance

Answer the following questions before you get to the car rental counter:

• Do you need rental car insurance?
• Does your personal auto policy properly cover a vacation car rental?
• Which kind of rental car insurance should you get?
• Does your destination demand special consideration for coverage, rules and exclusions?

Counting on Your Car Policy

If you own a car, give your insurance agent a call. In most cases, the same coverage and deductibles you carry on your car will apply to a vehicle you rent for leisure (unless you are out of the country, which is an entirely different story). You wouldn't want to pay for rental car insurance you already have!

However, having the SAME coverage on your rental as you do on your own car may not be enough. For instance, if you drive an older used car and you're a savvy saver who isn't overpaying for comprehensive coverage that costs you more than the car itself, then you might need more coverage on a rental car.

If you don't own a car (and therefore have no car insurance), you may still be covered by the credit card company you used to rent the vehicle. But read the fine print: You have to be extra careful relying on your credit card car rental insurance coverage. Call the card issuer and ask. Not only does coverage vary from card to card, but it can vary based on the bank or credit company that issued the card as well.

Be sure to ask about exclusions because that fantasy convertible you booked or some other exotic or expensive vehicles, such as sports cars, SUVs, motor homes and motorcycles, may not be covered at all.

Types of Rental Car Insurance

If you've determined that your existing coverage is not enough or decided the extra money is worth avoiding the extra hassle of filing a claim with your insurer should anything go wrong... check out the different options you'll likely face at the rental counter.

• CDW (collision damage waiver) and LDW (loss damage waiver). This relieves you of financial responsibility for a rental vehicle damaged by an accident, vandalism or theft. It usually costs between $9 and $20 per day. Note: Although the sale of CDW was formerly prohibited in New York state, recent legislative changes now allow it.
• SLI (supplemental liability insurance). This provides excess liability coverage up to $1 million. It usually costs between $7 and $9 per day.
• PAI (personal accident insurance). This covers you and all passengers in your vehicle for any medical expenses. It's not necessary for most renters already covered by personal health policies or travel policies. It usually costs between $3 and $5 per day.
• PEC (personal effects coverage). This provides coverage for theft of or damage to personal items inside the rental car. Again, it replicates coverage already provided to many renters through their own insurance policies. It usually costs between $2 and $5 per day. This is cheap compared to having to replace all your belongings, including cameras and computers, when you are in the middle of your trip.

Some rental companies make it confusing by combining two or more of these options into insurance packages. Each product should be evaluated separately. Again, don’t wait until you're at the rental counter to waste valuable vacation time debating what to buy.

Where Are You Going?

Regardless of how covered you may think you are by your own policy, it likely doesn't apply to international rentals. So if you're traveling outside the country, your best bet is to get the extra coverage.

Worth the Hassle?

If anything happens to your rental, many car companies will expect payment immediately. Believe it or not, if you're traveling abroad, they may even be able to stop you from leaving the country until the repair bills are covered. If you didn't buy the extra coverage, you may have to pay out of pocket at that moment then wait to be reimbursed by your personal auto insurance company.

Bottom Line

• Determine if you have a need for the service.
• Verify whether or not you are already covered.
• Shop around. In some leisure hot-spots, the cost of taxes, fees, surcharges and optional insurance can go over the daily base rate of the rental itself.

If you don't have another coverage in place certainly get the car rental insurance as you need to be covered, but make sure you are not covered first!