Rental Car Insurance - Do You Need It?

Do you need rental car insurance when you rent a car? The answer is: maybe you do and maybe not. It depends on what type of vehicle you are renting, what type of personal vehicle insurance you have, and what type of credit card you are paying with.

The first thing you should do is check with your personal insurance agent and credit card company, before you get to the car rental counter. Many people wait until they get to the counter before making the decision about car rental insurance, and then they fill overwhelmed. They either decline all of the insurance offered, or accept all of the insurance available. If you are not careful, you will pay for insurance you do not need or worse, end up with no insurance at all.

Check With Your Insurance Agent: Check what type of car insurance you have. Most personal insurance policies will cover a rental car as well, provided it is used for pleasure and not business. However, you need to be sure you have comprehensive and collision coverage for your personal vehicle, otherwise you will not be covered on your rental car if you have an accident.

What Type Of Coverage Do You Need?

Collision Damage Waiver – This coverage protects you if your rental car is damaged or stolen. If you have comprehensive insurance on your personal car, you may not need this coverage.

Liability Insurance – This provides excess liability coverage. Car rental companies are required to provide the minimum level of liability insurance. However, if you are in a serious accident, this may not be enough coverage. If you have adequate liability insuarace coverage on your personal vehicle, you may not need this additional insurance.

Personal Accident Insurance – This provides coverage to you and your passengers for medical bills. Again, this may not be necessary if you are covered by a good health insurance policy or under the medical coverage with your personal car insurance.

Personal Effects Coverage – This provides coverage for the theft of personal items in your car. This may be covered under you homeowners insurance or under your personal vehicle insurance.

Depending on what vehicle you rent, your personal auto insurance may, or may not, cover the necessary insurance. For example, some policies will not cover SUVs or expensive luxury cars. You should check with your agent before making your trip.

All things considered, you may want to go ahead and get the additional insurance from the car rental firm, because if you have an accident and use your insurance to pay for the damages, your rates may go up. This is especially true if you are using the vehicle for business purposes, because many insurance companies will not cover a car rental used for business purposes.