Should I Buy Extra Rental Car Insurance?
Is Buying Rental Car Insurance Worth the Cost and Hassle?
You’re a responsible traveler. You booked your room weeks in advance, your schedule is set in stone, and you’ve chosen a reliable rental car. Still, you’re stuck wasting precious time at the rental counter worrying about the unexpected cost of rental car insurance. After all, you’re a safe driver and the rental company’s collision damage waiver costs you an extra $10 to $30 each day. On the other hand, (as the on-duty attendant helpfully points out) your great driving can’t protect you from other drivers. So, should you just shell out the extra cash?
Not necessarily. The one thing most people don’t realize is that they may already have the coverage they need. To determine whether you need rental car insurance, you should examine your personal insurance policy and the terms on the credit card you used to book the vehicle. Depending on your personal circumstances and the reason for your trip, you might have other coverage options as well.
What Is a Loss Damage Waiver?
Though it’s technically not an insurance policy, a loss damage waiver, or collision damage waiver is a protection plan offered. The plan is designed to provide coverage in the event your rental is damaged during an accident. It protects the assets of the rental company and it protects you from needing to file a claim with your insurance company. However, it’s important to note that a damage waiver may not cover you against liability claims or provide stolen property coverage. You might be able to get add-ons to increase your coverage–but you’ll be spending even more.
Do You Already Have the Coverage You Need?
If you haven’t thoroughly examined your options, there’s a chance that purchasing rental car insurance will just be duplicating coverage. Before spending your hard-earned money, it’s time to take a look at your personal circumstances. You should have a firm understanding of these details to know what coverage you really need.
- Your personal auto insurance coverage: If you own a car and have personal auto insurance, your coverage may extend to a rental vehicle. It’s important to determine if your current auto insurance policy includes collision and loss-of-use coverage.
- The terms of the credit card you used to book the vehicle: Some credit cards include benefits like Collision Damage Protection. However, this perk typically works as secondary insurance. If you purchase the coverage offered by the rental company, the credit card benefit doesn’t kick in.
- Car rental insurance cost: Car rental insurance can be steep, but no coverage can be more expensive in the long run. If you can’t afford the coverage offered by the rental company, there may be other options from your insurance provider.
- Why you’re traveling: If you’re traveling for work or with a tour, provisions for coverage may be included in your travel arrangements. Make sure to check all the details of your trip before you spend extra money.
Watch for Potential Gaps in Coverage
If you’ve taken the time to understand your existing coverage, you still have a hurdle to get over. Some policies have exclusions that may leave you with gaps in coverage.
Potential Auto Insurance Gaps
- The policy doesn’t include collision and comprehensive coverage
- Your collision coverage doesn’t extend to rental vehicles
- Some car insurance policies only cover certain types of rental vehicles
- Loss of use and diminution of value coverage is excluded from your policy
Potential Credit Card Gaps
- You’re using a debit card instead of a credit card (Debit cards don’t carry the same benefits.)
- Splitting the cost between two cards will likely void the coverage
- Failure to activate the coverage, or unknowingly taking actions that void your coverage
- Exceeding the maximum days of coverage
When Rental Car Insurance May Be Worth the Cost
Sometimes it’s not all about the money. The peace of mind that goes with the knowledge you’re not underinsured while traveling is an important part of enjoying your time on the road. Travelers who recommend purchasing a damage waiver, often simply wish to avoid any hassles associated with making a claim.
If you don’t own a personal vehicle and depend solely on the coverage supplied by your credit card, you may need to be prepared to pay for damages out-of-pocket. If you don’t have the funds to take care of the damages, you may end up in a legal battle while you wait for your credit card company to reimburse you. Waiting for reimbursement might also leave you with additional fees like towing and temporary storage.
Some drivers may simply wish to avoid involving their regular insurance carrier. If your auto insurance includes expensive deductibles, it’s a good idea to compare those costs with the cost of rental insurance. Understanding all the terms included in your insurance policy will give you the opportunity to make an informed decision.
When you’re suddenly faced with the decision at the counter, rental car insurance simply seems like a small addition. Yet, there’s a lot of power in this little upsell. The only way to decide if you need extra car rental insurance is to understand your current coverage and determine your individual priorities. LoPriore Insurance is an independent insurance agency located in Stoneham, Massachusetts. We always go the extra mile to provide you with insurance that fits your lifestyle. If you have questions about personal or commercial car insurance, or you need additional details about rental car insurance, get in touch today. Whether you’re a local, or visiting the area, our agents are happy to offer advice about the auto coverage you need to stay protected while you travel.