Should I Buy Rental Car Insurance?

Whenever you rent a car, you will be offered optional auto insurance. But it isn’t always easy to determine if you need it, and if you do, whether or not the auto insurance offered provides the coverage you really want. The insurance rates may not be worth the costs.

Know What You’re Buying
Before you opt for rental car insurance, you should read all the details of what it provides, including what is covered and any limitations or exclusions. You can ask for detailed information on rental car insurance from the rental location, or check the rental company’s website.

It is possible that your current car insurance policy will cover you when you rent a car, so you may not actually need more insurance from the car rental agency. In most, but not all circumstances, your current liability coverage (and existing limits) covers you when you rent a car as well, as do your comprehensive and collision insurance. Any deductible expenses you are liable for should also remain in effect without change.

Kinds of Rental Car Insurance
If you do decide to purchase additional coverage from the rental car company, it will usually take one of two forms: Supplemental Liability, which pays claims made by a harmed third party, or a Loss Damage Waiver, which pays for damage you may do to the rental car.

Prior to taking either kind of additional insurance, be sure you understand how they work in conjunction with your current car insurance. Also, in the case of a Loss Damage Waiver, be sure to inspect your rental car before you drive it away and have the rental company acknowledge any pre-existing damage. Also make sure the rental car company signs off that no new damage has occurred when you drop off the car. This will eliminate the chance that ‘phantom damage’ will come up – which may or may not be covered by your Loss Damage Waiver.

Other Coverages
Some credit cards also provide coverage for car rentals, but the kind and amount of coverage provided varies widely, so you will want to check with your credit card company for details. There can be limitations on which companies you can rent from, or which dates and times you will be covered for, as well as limitations on what kinds of cars you can rent and still be covered. Other credit card-based ‘insurance’ actually only pays the difference of your deductible, which may not be what you might have expected. Don’t assume that, just because you’re being told that you have credit card-based coverage, that everything – personal injury, property damage, collision and comprehensive – is included. It’s likely that all of these won’t be.

Finally, don’t forget that other insurance you have may come into play too when you are traveling. This potentially includes coverage from your home owner or renter policy for stolen or lost items, and possible medical insurance coverage for any injuries you sustain.

Disclaimer: The contents of this and all articles provided by Insuredirect.com are for informational use only, as the specifics of any situation will vary with the circumstances. Do not consider the information provided in this article as a recommendation on purchasing any specific auto insurance, homeowners insurance or other type of insurance product, or to provide financial or legal advice. Without exception, all information is presented for information purposes only.

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Rev. V.1 - 10-31-2007