Should You Waive the Waiver?

In these troubled times, facing the worst recession the country has encountered in at least seven years, the last thing you want to do is waste money. Yet when many of us sidle up to the rental car counter, that is exactly what we do. Though many of us possess at least enough financial sophistication to keep from bouncing checks, get our bills paid on time and maybe even plan for our retirement, when it comes to car rental waivers, we seem to have all the economic savvy of a baboon. Yet, it doesn't have to be that way.

First, let's help you get a grip on what the waivers actually are: protection from financial loss that might be worthwhile. Rental car companies sell waivers that cover liability (damage you cause to other people or property), collision (damage you cause to the vehicle you rented) and comprehensive claims (stolen vehicles, weather-related damage like that caused by hail or flooding and collisions with animals.) You might decide that not having to worry about these potential stumbling blocks has value to you.

How does it work? When you buy waivers, the rental car company gives up its right to collect damages from you. That's a good thing, because it is essentially insurance against a big claim if your rental minivan falls off that big cliff in Hawaii while you and your kids are admiring the view or if some dim-bulb keys your snazzy rental convertible because he accidently mistook you for his ex-wife. But, since buying waivers can add substantially to the cost of a rental (waivers can cost up to $50 per day, depending upon the rental company, vehicle and type purchased), it's important to learn whether you need them.

If you own or lease a car, you are almost certainly already paying for auto insurance, so a good first step before you rent a car is to find out what you're already paying for and how it might apply to a rental car. If you have what is often referred to in the insurance industry as "full coverage" on your personal automobile, which means you have comprehensive, collision and liability coverage, you should check with your agent or your company to see if that coverage extends to a rental vehicle. Very often it does, and if you're involved in a crash with a rental car, in most cases you would be liable only for your deductible on comprehensive or collision coverage, just as you would be in your personal vehicle. Additionally, you should check with your credit card company to learn its policies, because some companies provide you with "waiver" coverage at no charge if you use their card to rent the vehicle.

The key advice here is check with your insurance agent, insurance company and credit card provider. While these won't be the most exciting phone calls you will ever make, the 15 minutes you spend doing it could end up saving you $350 over the course of a week's vacation. Wouldn't you rather have that money in your pocket to stave off the ravages of the recession?