Rental car insurance may feel like one of those unnecessary expenses offered by a service provider just as you’re about to sign on the dotted line. In some cases, that’s exactly what it is, but in others, it’s an incredibly useful service that you shouldn’t pass up.
When You Shouldn’t Get Rental Car Insurance
Your personal auto insurance policy should cover you for any car that you drive, including a rental. Depending on the type of policy you have, you may find that you’re covered for all of the following:
- Liability Coverage: A basic form of car insurance that is required in most states. Liability coverage has two parts: bodily injury and property damage. It covers you when you do harm to another person or their property during an accident.
- Collision Coverage: A option that can be added to your policy to cover you in the event of a collision with another vehicle or with an object such as a guardrail, tree, or fence.
- Comprehensive Coverage: Provides cover for events that are outside of your control, including weather damage, vandalism, and theft. It also covers collisions with animals, but if you swerve and hit a tree or rail, collision coverage will take over.
Your car insurance policy may also provide you with roadside assistance, uninsured/underinsured motorist protection, and more.
But that’s not all.
If you purchase a rental car with your credit card, you should be covered there as well. Coverage options differ from provider to provider and even from card to card, so you should contact your provider for more information.
At the time of writing, American Express, Mastercard, Discover, and Visa all offer some form of coverage, but it all depends on your card and the bank providing it.
Credit card providers offer something known as collision damage waivers or loss damage waivers. These may cover you for theft, damage, and loss of use, as well as towing expenses. You will not be covered for liability expenses, but as noted above, that cover will be provided through your personal auto insurance.
To make sure you’re covered through your credit card, you need to decline the rental car company’s offer and reserve/pay for your rental car with your credit card.
When You Should Get Rental Car Insurance
If you don’t have any type of personal auto insurance, you will need liability coverage before you drive a rental car. This is a bare minimum, but if you want additional cover and don’t have the backing of a major credit card provider, it should also be considered.
The same is true if you only have commercial car insurance and are not covered as an individual driving a non-commercial vehicle. It may also be required if you’re driving in another country.
Finally, if your auto insurance includes liability damage but does not offer collision coverage or comprehensive coverage, rental car insurance could be a necessity.
For instance, you may drive a very cheap and old car, one that you don’t really need to be covered for and might not even care if it gets damaged. Regardless, when you transition to a new/nearly-new rental car, you’ll want that additional cover to avoid being hit with a massive bill.
What About Persona Effects?
If you’re driving a rental car on vacation, there’s a good chance you’ll be carrying expensive things around, including laptops, phones, and other personal items. You may even have a bundle of cash in your wallet or suitcase. If the car gets stolen or broken into, you’ll want to be covered for those items.
This is where your homeowner’s insurance or renter’s insurance takes over, and you should be covered for off-premises losses to a certain degree. This applies to all personal items taken outside of the home.
Check your policy for more information, and if you’re traveling abroad, make sure your coverage extends outside of the United States.