You find yourself standing at the rental car counter in the airport, and that age-old question is thrown your way: “Do you want rental car insurance?” Beads of sweat form on your forehead. Is it really necessary? Are you wasting your money? Does your regular car insurance cover it? Can you call a friend for advice? We’ve all been there. But fret not, my friend! Let’s dive into the world of rental car insurance and determine if it’s a must-have, so the next time you face that counter, you can confidently answer without any worries!
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What Exactly is Rental Car Insurance?
Rental car insurance is an additional coverage option you can opt for when renting a car. It provides extra protection in case you have an accident while driving the rental vehicle. So, what does rental car insurance usually cover? Allow me to break it down for you.
The Collision Damage Waiver, also known as Loss Damage Waiver, covers theft or damage to the rental car in case of a collision. However, it’s important to note that this is not technically insurance but rather a waiver that absolves you from responsibility for any damages. It won’t cover damages caused by your negligence, such as excessive speeding. Additionally, the rental company may still charge you for other expenses like towing or loss of use, which refers to the money they lose because they couldn’t rent out the damaged car.
Supplemental Liability Coverage protects you in case you damage someone else’s vehicle or property. Typically, rental car liability limits range from $300,000 to $1 million.
Personal Accident Insurance covers medical bills for you and your passengers if you sustain injuries while driving the rental car. It even includes death benefits for worst-case scenarios.
Personal Effects Coverage reimburses you for any personal belongings, up to a certain amount, that are stolen from the rental car. It provides similar coverage to what you already have with your renters or homeowners insurance, so it’s likely unnecessary.
Does My Auto Insurance Cover Rental Cars?
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In most cases, your personal auto insurance already covers your rental car, just as it covers your own vehicle. Consequently, additional rental car insurance may not be necessary. For instance, if you have comprehensive or collision coverage, you won’t need the collision damage waiver. Likewise, if you have sufficient liability coverage, there’s no need for rental car liability coverage. Save your money and skip it. Moreover, personal accident insurance is often redundant because your health insurance or personal injury protection on your auto policy usually provides enough coverage. As for death benefits, it’s wiser to invest in term life insurance.
Nevertheless, it’s always wise to familiarize yourself with the details of your personal auto insurance policy before assuming you’re covered for rental cars. Don’t make any assumptions; check your policy’s coverage.
When Should I Consider Rental Car Insurance?
Still unsure about the necessity of rental car insurance? Let’s sum it up. You may need rental car insurance if:
- Your personal insurance policy doesn’t cover rentals.
- You don’t own a car and don’t have car insurance.
- You rent cars more frequently than the average person.
- You worry about being accountable for a high deductible.
- You’re traveling for business, and your company doesn’t provide coverage.
If you frequently rent cars but don’t have your own auto insurance policy, you might want to consider non-owners auto insurance. This coverage protects against bodily injury and property damage when driving a car that you don’t own. Additionally, it’s usually more affordable than standard insurance, which is great for budget-conscious individuals.
If you choose to rely on your personal insurance instead of purchasing additional coverage from the rental company, keep a few things in mind:
- If the rental car sustains damage or is stolen, filing a claim will impact your premium just as it would if the incident involved your own car.
- The rental company might place a deposit on your debit card, which will be refunded upon returning the car in good condition.
- Your personal auto insurance doesn’t cover vehicles like moving trucks. In such cases, you must purchase insurance directly from the truck rental company.
One last thing: certain credit cards provide some protection against car rental incidents; however, relying solely on credit card protection is not advisable. Credit cards have numerous drawbacks and limitations that make them an unreliable option. Moreover, credit card protection is secondary, meaning it only kicks in after you’ve paid for your personal policy.
Do I Need Rental Car Insurance for International Travel?
Traveling internationally and planning to rent a car? Should you consider additional car rental insurance? Renting a car outside of the USA brings its own set of challenges. Fewer insurance companies offer coverage for international car rentals. Therefore, it’s crucial to contact your insurer and confirm if your rental is covered.
Some people prefer purchasing additional coverage when traveling abroad due to the higher risk of accidents resulting from different driving conditions and traffic laws. Moreover, the extra coverage also saves you the hassle of filing a claim in a foreign country.
How Much Does Rental Car Insurance Cost?
The cost of rental car insurance varies, but for full coverage insurance, you can expect to pay between $30 and $60 per day. If you prefer to select specific coverage options, here’s a breakdown of their individual costs:
- Collision/Loss Damage Waiver: $20 per day.
- Liability Insurance: $15 per day (per $1 million in coverage).
- Personal Accident Insurance: $5 per day.
- Personal Effects Coverage: $2 per day.
If purchasing rental car insurance directly from the rental company seems overpriced, you have the option to buy it through a third party, such as Bonzah or Insure My Rental Car. This can be a more affordable alternative. However, for most people, relying on their existing auto insurance policy is usually the best course of action.
Rental Car Insurance: To Buy or Not to Buy?
The bottom line regarding rental car insurance is to ensure you’re not paying for unnecessary coverage. However, it’s equally important to avoid taking unnecessary risks to save money. If you frequently rent cars, you might want to consider upgrading your personal policy to provide more comprehensive coverage while you’re renting. Even if you don’t rent cars often, it’s good practice to review your personal policy before traveling or at least once a year. As long as you have a solid auto insurance policy, the next time you find yourself facing the rental counter, simply smile and confidently say, “No thanks.”
If you’re in need of an auto insurance policy update or want to ensure you have sufficient coverage, we recommend consulting an independent insurance agent who is part of our Supported Local Provider (ELP) program. These trusted professionals will listen to your unique needs and budget to provide coverage that perfectly fits you. Connect with an ELP near you today and start saving!