To Buy or Not To Buy: The Lowdown on Rental Car Insurance

It’s the season of travel and you may find yourself renting a car to do so. At the rental counter, you will be asked if you want to purchase rental insurance. Rental coverage may or may not be a good value. Prior to purchasing rental car coverage be sure to ask exactly what will be covered to determine if it’s a necessary purchase. Take the following into consideration before you decide to either decline or purchase the coverage:

1. Do You Already Have Insurance

If you do, chances are your current policy will extend itself to a rental car. If you don’t have auto insurance, chances are that you will be declined a rental car to begin with. If you are planning on renting a vehicle, contact your insurance agent and find out what is covered.

2. Rental Coverage is Not the Same as Insurance

If you have rental reimbursement coverage on your current policy, be aware that this does not mean that you have insurance coverage for a rental. Rental reimbursement simply covers you in the event that your car is in the shop for repairs and you need a rental for your day to day activities. It covers the cost of the rental, not damage sustained or caused by the rental vehicle.

3. A Different Coverage for a Different Need

There are several types of additional coverage offered by insurance companies. You can purchase these coverages separately as needed. Here are the most common:

  • Damage Waiver: if your rental is damaged or stolen through no fault of your own, this coverage will come into play. However, if you currently carry comprehensive and collision coverage, this waiver is typically unnecessary.
  • Supplemental Liability: if you don’t have adequate liability coverage on your own vehicle, this supplemental coverage is a good idea. If you are involved in an accident with your rental car, the coverage will protect you above and beyond your own insurance policy. Often times the protection is capped at $1 million.
  • Personal Effect Coverage: this will protect property if it becomes damaged in an accident.
  • Personal Accident Insurance: this works as a type of medical insurance, covering you in the event of an accident. If you carry medical insurance on its own or as a part of your auto insurance policy, you don’t need this additional coverage.

What You Can Expect to Pay

rental car insuranceWhile additional coverages will vary depending on the rental car company, you can expect, on average, to pay an additional $25 per waiver. This can vary easily double the cost of your rental. It is for this reason that you should make sure you need the extra coverage before you purchase it.

Chances are that your current auto policy is adequate when renting a car. Check with your credit card company as well; many offer protection when renting a vehicle with their card. While not all additional coverage is unnecessary, if you feel that it would be in your best benefit to purchase it, by all means: do!

Photo credits: hertz counter by Steve Damron/flickr; My Hooptie Rental by bitshaker/flickr

Author Stephen Anderson is an insurance consultant who strongly suggests that you search online to Compare Auto Insurance Rates to make certain you get the best possible deal these days.

The General Car Insurance is just one example of the providers available for comparison.

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