Rental Car Insurance – Do You Really Need It?

It is important to understand your rental car insurance position before you even go into a rental car company. Too many people say “sure” when they are offered additional rental coverage by an agent. We are often in a rush and don’t know how to respond. Most of the time, additional rental insurance is unnecessary.

Before you call a rental car agency, be sure to check the coverage, benefits, exclusions and limitations of your personal insurance policy. Standard auto policies cover rental cars for leisure purposes with the same coverage and deductibles. While it is safe to check your policy, most states consider the rental vehicle your primary vehicle during the time you are driving it. Most likely, your corporate travel policy applies if you are renting a vehicle to use for business purposes. Your credit card company may offer rental coverage if you comply with the following requirements:

*You must be the primary renter of the vehicle
*You must have declined the rental collision waiver
*You must pay for the car in full with the credit card

Different types of rental coverage offered

Supplemental Liability is: This could be the most important. If another party is claiming for injuries or damage to your vehicle, they will pay up to $1,000,000 for you. This coverage is unlikely to be required if you do not have auto insurance (which you must if you rent a car), or if you have an umbrella policy.

Damage Waiver: This coverage covers the costs of any damage to the vehicle, whether it is damaged in an accident, vandalism or theft. However, there are some restrictions. These are the exclusions from coverage for accidents caused by:

*Excessive speed
*Driving off-pavement
*Driving under the influence
*Driving in a “no rental car” area

You may have collision or personal comprehensive coverage. The damage waiver might duplicate those provisions.

Personal Effects Insurance: This protection protects against theft and damage to personal belongings that are in the vehicle. It does not cover items in other cars or vehicles involved in collisions.

Personal Accident Insurance: This coverage covers the driver and passengers of the rental car in the event that there is an accident. It also provides personal injury protection and medical benefits. This coverage is generally not required if your private insurance policy includes Personal Injury Protection.

If You Say Yes, What’s The Price?

It is easy to have insurance add-ons that cost more than just the car. The rental agent may bundle one or more of the extra coverage together to call it a package or “bundle”, and then classify it as “deal.” You could end up paying $25 more per item if you purchase one or more coverage options.

There is no universal answer to the question “Do I need rental coverage?” In certain situations, additional coverage may be beneficial.

Review your auto insurance policy before you go to a rental car agency. Also, visit the rental car company’s website for details about the insurance products that they offer. These two simple tasks will ensure that you are not a victim to a hard-sell “package” or “bundle” that you don’t need.