Rental Car Insurance, Do You Really Need It?

You come off the plane, pick up your luggage and head to the rental car counter. You are tired from the flight and this when you are asked, “Do you want insurance with that?”

Most travelers that are asked this, have the vague notion that they do not really need to buy rental car insurance – they think that coverage is covered by their current auto policy. Other travelers have just enough doubt in their minds and they make the decision to buy the insurance just to be safe.

So, which is it?

Do you need to buy rental car insurance or not?

There isn’t a one-size-fits-all answer. However, you can likely reach a conclusion you are comfortable with by considering these three questions.

  1. What types of rental car insurance are available?

Most of the time, car rental agencies will offer you four type of insurance to purchase:

  • Collision damage waiver – the car rental company will not charge you for a damaged or stolen vehicle when you buy this.
  • Supplemental liability protection – this coverage will ensure you’re covered for costs to others if you cause an accident in the rental.
  • Personal accident insurance – coverage that will pay for injuries or death of the driver and passengers of your rental car.
  • Personal effects coverage – reimbursement for any stolen personal items while renting the car.
  1. What rental car coverage I might have already?

You should look at your personal car insurance first. It is likely that your policy will provide the same level of coverage for the rental as it does for your own car. This usually includes liability insurance and depending on your policy, could also include collision, comprehensive and medical payments. There are exclusions; some insurers will not cover rental car in foreign countries or rental cars being used for business. Call your insurance agent to verify the coverage you have.

You can also check with your credit card company. Most cards offer some degree of coverage, but it varies widely. Coverage is usually secondary, which is designed to step in and pick up where your auto insurance policy leaves off, and it tends to be confined to collision, damage and theft. Coverage to be applied, most credit cards require that you decline the rental company’s collision damage waiver and pay for the car in full with the card that provides the protection. You should again call your credit card company to find exactly what is covered.

Also consider your health and life insurance. If you are in an accident involving a rental car and you have these policies, you more than likely have coverage for your own costs. Your homeowners insurance policy may have personal property coverage to help repair or replace valuable belongings that are lost, damaged or stolen while you are in a rental car. Of course, your deductible and policy limits will apply and the same goes for renters and condo insurance.

  1. What rental car coverage I could be missing?

If something does happen while you are driving a rental car, you may be looking at loss of use and diminished value fees, which your regular car insurance policy may not cover. Loss of use is the income that the rental agency loses due to the vehicle being in a shop for repairs and diminished value is the calculated reduction in a vehicle’s resale value as the result of an accident. Credit cards sometimes cover these items but be aware that they may require documentation that rental agencies can be reluctant to provide.

Before you make the next trip, give R.C. Keller & Company a call and check with your credit card company. That way you will be ready to make an informed decision when you get to the rental car counter.

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