When someone rents a car, the rental car companies try to sell different types of supplemental coverages. It can include collision coverage that helps to protect the rental vehicle itself. Some rental companies can also provide liability insurance for mishappenings in which the renter (the person who pays money to rent a vehicle from a car rental supplier) causes damage to another person’s property or injury to another person.

Neither of the policies mentioned above can cover stolen or damaged personal property. Let’s assume if some expensive thing like a laptop, jewelry, or cash is stolen from the rental car, CDW/LDW (Collision damage waiver/Loss damage waiver) or liability insurance will not cover it.

To avoid this loss, rental car companies sell a little expensive coverage with limited perks known as personal effect coverage. Let’s explore a bit more about this insurance coverage in Rental cars.

What is PEC in Insurance?

Personal Effects Coverage also known as Personal Accident Insurance(PAI-PEC) is an optional coverage that is sold at the rental vehicle desk. If accepted in the rental Insurance policy, PAI covers the loss or theft of personal belongings of the principal insured, the additional insured, and any member of the principal insured’s immediate family members. The final cost of PEC depends on the duration of the rental time. Generally, the premium for personal effect coverage is calculated as a fixed amount per rental day. The PEC covers only a certain amount of cost related to the loss or stealing of personal belongings. The exact amount varies with the rental car suppliers

Limitaions of PEC Insurance

The PEC coverage has some exclusions and limitations, typical exclusions include:

  • Motorcycles, boats, motors, or other accessories.
  • Household furniture
  • stamps, deeds, securities, bullion, and tickets.
  • CB radios and GPS equipment
  • guns, merchandise for sale, or fine art.
  • Contact lenses
  • Artificial teeth, and Prosthetic devices
  • Animals.

PEC doesn’t cover “loss by mysterious disappearance.” That means PEC won’t help if items are stolen from a locked car without breaking and entering.

Hazards of not purchasing PEC when renting a car

What happens if someone declines the PEC? In a nutshell, if your personal belongings get stolen or damaged, you have no alternative. Even if the damage will be caused by the rental car itself, it will not cover the belongings.

In an exemplary tale, companies would not cover a renter’s personal valuables after their rental car caught on fire. The renters had bought CDW/LDW coverage but not PEC. So the insurance companies covered the burned automobile, but not the renters’ possessions. Thus the PEC is as important as CDW LDW in a rental car.

Rental Car Insurance Alternatives

Before you get to the rental car counter, you must know what choices you might already have with the existing insurance policies. Sometimes, you don’t want to purchase coverage from the rental car company because a few other insurance policies might include those coverages which come along with the PEC. Here are some other policies that are required to be considered in addition to personal effect coverage:

  1. Home, condo, and renters insurance: Homeowners insurance for renters policy covers your personal belongings for theft, even when they are theft from a rental car. For example, if a thief swipes your mobile or laptop from a rental car, you can file a claim under your homeowners’ insurance policy.
  2. Roadside assistance insurance: Sometimes roadside assistance insurance typically extends to rental cars and covers problems like dead batteries, flattening of tires, locking yourself out of your car, and running out of gas.
  3. Travel insurance: Some travel insurance companies provide you coverage for rental cars, but it may be limited up to some extent. For example, some travel agencies pay up to 50,000$ in case of any mishappenings.