Rental Car Insurance

June 09, 2017
Rental car insurance. It's something you never think about until you need to, but when you're at that counter and you're getting the hard sell, it can get brain racking. Do I really need rental car insurance? Is declining it a big mistake? Does accepting it make me a sucker? What's the real story on rental car insurance? You can be sure that your helpful rental car agent is not going to give you the best advice. In fact, it's almost certain that they will strongly recommend you take on all of the rental car insurance they can sell you, especially if you seem unsure as to whether you need it or not. While it's possible you may need additional rental car insurance, there's a good chance you will not, and you need to know the answers before you get to the counter, Here are some tips to help you figure out whether rental car insurance should be for you.

Types of Rental Car Insurance

When your rental agent offers you rental car insurance, what exactly are they selling you? There are four main types of rental car insurance you may need to consider. The first is CDW/LDW, or Collision Damage Waiver and Loss Damage Waiver. This protects you if the vehicle you rent is subjected to damage from an accident or vandalism, or is stolen; similar to the collision and comprehensive coverage you may have on your personal car. Your rental company may offer to add this to your rental agreement for $10 to $20 per day. The second type is Personal Accident Insurance, which covers any medical expenses incurred by you or your passengers due to an accident. You may also be offered Supplemental Liability insurance, which gives you additional liability coverage, usually for $10 or less per day. Finally, you may be given the option to adopt Personal Effects Coverage, which protects your personal property inside the car from theft or damage.

Do You Need Rental Car Insurance?

As you might guess, in most cases, you will not need any additional rental car insurance. It's also important to consider that it's possible that even if you do think you will need additional coverage as outlined above, you still do not need to purchase it through your car rental company. In fact, if you do, you may be paying for coverage you already have. To avoid paying double coverage, check with your personal auto insurance agent. If you have your own car, your existing auto insurance coverage will often extend to any rental car you rent as well. In this case, paying for any kind of rental car insurance will just be a waste of money. It's also often the case that the charge card or credit card you use to rent the car offers travel insurance as part of their service, and this insurance would overlap the rental car insurance.

When Might You Need Rental Car Insurance?

You may need rental car insurance if you are in a specific situation that requires extra insurance that you know your existing car insurance or travel insurance does not cover. For example, perhaps you are transporting something of great value and your travel insurance does not cover personal items in your rental car. You may want to take on some personal effects insurance. Or perhaps you are driving overseas and don't want to have to try to work things out with your insurance company back home if there's a problem that you could have avoided for a few extra dollars a day. The key is to know before you even walk into the rental car company if there is a chance you will need supplementary insurance.

Other Things to Keep in Mind

Watch out for rental car companies that try to bundle different kinds of supplementary rental car insurance together. Just because you think you may need one type of rental car insurance doesn't mean you have to take on the whole package. You're well within your rights to refuse any or all of the optional coverage provided. In fact, the ideal approach is to enter the rental car situation with specific knowledge of which types of optional rental car coverage you want and which kinds you definitely don't want. Make sure your desires are made clear to the rental car company and you're getting exactly the type and amount of supplemental insurance coverage you want and no more. Also, if you rent cars often, you may want to look into what is called non-owner liability insurance. If you don't own a car because you are often traveling and renting and it doesn't make financial sense to own, you can still get a policy that covers rental car situations. Depending upon how often you rent cars and how much insurance you need, having one of these policies can save you considerable money over taking on supplemental rental car insurance every time you rent a car.

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Jeff Bridges
Jeff Bridges

I have wondered how rental car insurance is actually handled. I plan to go on vacation this summer and might rent a car. I think I definitely want to pay for insurance, considered I'll be driving in another state that I'm not familiar with, in a car I'm not used to driving. 


Here are a couple of 2 points to consider when renting a car and trying to decide whether to get extra insurance.

I will quote from this article:

Point # 1

"If you own a $20,000 car and then rent a $50,000 SUV on vacation how will your auto insurance coverage protect you for damages? The idea is to get a car that is LESS than the car you have full coverage on. Call youragentto see if this will work for you so you don’t have to get the rental coverage!  There also may be  restrictions that apply, so it really makes sense to contact your to make sure that these restrictions  don’t spoil your family fun."

Point # 2

What if you do not have full coverage on your personal car?

"First things first you should contact your credit card company? Why? If you pay for your rental car with a VISA or Master Card many times they will pay for the rental insurance for you! Don’t assume this as every card is different, so be sure to talk to them before proceeding."

Hope this supplementary info will help someone.