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 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 rental company’s assets, 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 be duplicating coverage. Before spending your hard-earned money, it’s time to take a look at your personal circumstances. It would help if you had a firm understanding of these details to know what coverage you really need.

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• 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, coverage provisions 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 knowing 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 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 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.

Top 5 Frequently Asked Questions About Rental Car Insurance?

Does purchasing rental car insurance coverage cover other additional drivers?

Not necessarily. If you’re depending on your personal insurance policy, talk to your insurance provider to be sure your coverage will extend to a secondary driver you’ve given permission to drive the car. If you purchase rental insurance from a car rental company, you may be required to pay an additional driver fee.

Can you rent a car without owning car insurance?

Yes. Most states require car rental companies to carry minimum coverage on the cars they own. So, even if you don’t purchase coverage, you can legally drive a rental car. However, it’s strongly advised to have some insurance coverage because you’ll be responsible for paying for any damages that occur without it.

Are you required to buy insurance when you rent a car?

No, in many cases, your personal auto insurance coverage will extend to your rental vehicle. It is important to know your policy details and purchase coverage to cover any gaps that exist.

Does my car insurance cover a rental car that I rent while on vacation?

Most car insurance policies provide coverage for a temporary substitute vehicle. This would include your vacation rental. However, this doesn’t necessarily mean you have complete coverage. Be sure to watch for these gaps.

• You’ll be renting the vehicle for a longer period of time than your insurance covers.
• Your personal insurance doesn’t include comprehensive or collision coverage.
• The rental is more valuable than your personal vehicle.
• Your deductible still applies

Is rental car insurance a rip-off?

Technically, rental car insurance does what it claims to do–provide coverage in the event of an accident. However, most drivers already have the coverage they need from their personal auto insurance policy. Furthermore, you could likely get the rental coverage you need from your regular insurance provider in the form of a rider or a temporary coverage policy at a lower cost. While rental car insurance might not be classified as a rip-off, you can likely get the same coverage at a lower price (if you even need it at all).

Conclusion

When you’re suddenly faced with the decision at the counter, rental car insurance 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 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.

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To learn more about how you can save on car insurance. Get in touch with the independent agents at LoPriore today. Our experienced insurance agents are available 24/7 to answer your questions, provide information about our auto insurance policies, or provide you with an instant quote.