If you’ve ever rented a car, you know that you can purchase auto insurance as part of your rental agreement. While a car rental agent will probably give you a great sales pitch on why spending an extra $9 to $15 per day on insurance is a safe and smart thing to do, following that advice blindly can lead you to spend money on insurance coverage you already have. . .
No one expects to get into an accident or cause damage to a rental car, but even if you’re the safest driver in the world, you can accidentally run over someone, or spill soda on the seat while leaving the drive-through.
Often your car insurance policy will cover damage to your rental car. If you have comprehensive and collision coverage, which pays for theft or damage to your car regardless of who is at fault, it can also pay for damage to rental cars. Likewise, your auto liability coverage can pay for any damage or injury you cause to others in an accident in your rental car. However, before you travel, take a few minutes to call your insurance agent and ask for exactly what rental car benefits your insurance will cover.
Another potential source of car rental insurance is your credit card. Card issuers often provide rental car insurance coverage to their customers as long as they use the credit card to rent a car. Again, check with your card issuer to find out specifically what your card will pay for. Some card issuers are more generous than others, and cards aimed at travelers may have excellent rental car insurance coverage. On the other hand, some credit card insurance agreements have very specific exclusions for coverage. For example, Visa cards usually do not cover what Visa calls ‘expensive or exotic’ vehicles, including Aston Martins and Bentleys.
Even with these options for rental car coverage, there are several reasons why you might prefer to purchase an insurance product offered by a car rental agency.
- If you use private auto insurance, your premiums may increase if you make a claim. If this is a concern, rental car coverage will save you from having to involve your car insurance provider should you get into an accident.
- If you have a high deductible on your insurance policy, which means you have to pay a certain amount, (the deductible is usually $500 and $1,000) before your insurance provider pays the claim, you may decide to take out the coverage offered by rental cars. company so you don’t have to pay the deductible.
- If your personal car insurance policy or your credit card does not cover certain things, you may choose to purchase rental car insurance. For example, some insurance companies will not cover certain types of rental vehicles, such as large trucks and passenger vans so you will have to purchase rental car coverage if you rent one of those vehicles.
If you decide to purchase insurance from a car rental company, understand that there are several types of products to choose from.
- Loss damage waiver, also known as a collision damage waiver, pays the costs incurred if your rental car is damaged or stolen. While this is not technically an insurance product, it relieves you of the liability for damages to the rental car.
- Additional liability insurance pay for any injuries or property damage you cause to others while driving the rental car.
- Personal accident insurance pay for medical expenses and the accidental death of passengers in your rental car as well as yourself.
- Personal effect protection pay for things that belong to you or those of the passengers of your rental car if they are lost or damaged in the rental car.