Every time you rent a car, you are faced with the option to purchase the insurance. Most rental car companies will position this insurance as offering ‘peace of mind’ for your trip.
But is car rental insurance really needed?
You might be surprised to know that many people end up buying supplemental car rental insurance protection that they really don’t need. Those extra insurance premiums can add anywhere from $15 to $30 a day to the rental car cost.
Did you know that it is not always necessary to get rental car insurance from your rental car company? In many cases, your personal auto insurance policy can extend to rental cars if you already own a car.
However, if you do not own a car and have no insurance at all, then it is well worth considering buying the rental insurance.
Why Do Rental Car Companies Offer Insurance?
Rental car companies typically offer vehicle insurance via a loss damage waiver (LDW) or collision damage waiver (CDW).
This type of insurance is important because it covers you if your rental car is damaged in a collision, stolen, or vandalized.
With this insurance waiver, the car rental company won’t pursue you for repairs and losses.
Know What Your Regular Car Insurance Policy Covers
If you’re like most people, you may already be covered under your everyday driver’s policy.
Before renting a car, review your auto insurance policy. It will detail the coverage types and limits. You can also ask your insurance broker if your car insurance policy includes any loss damage waiver or collision damage waiver for rental cars.
Here are three key elements to be aware of when depending on your regular auto insurance to cover a rental car:
Do You Have Adequate Liability Insurance?
Most standard car insurance policies have liability coverage. This coverage is usually required by state law and helps pay for others’ medical costs and property damage if you’re at fault in a car accident.
This liability insurance typically carries over when you’re driving a rental car. So if you’re comfortable with the level of coverage you already have, you can usually pass on supplemental liability.
Some personal car insurance policies may have supplemental liability coverage to cover any damage you cause while driving a rental car. Supplemental liability coverage may also pay for some medical expenses if anyone is hurt in an accident you caused.
Do You Have Comprehensive and Collision Coverage?
Fewer people (especially those with older model cars) have comprehensive and collision coverage.
Collision coverage helps pay for damage to your car from a crash, whatever the cause may be. It also insures your vehicle against non-driving-related calamities such as theft, fire, or vandalism.
Many people reduce or drop these pricey coverages on their insurance once it no longer makes sense to make major repairs to an aging or high-mileage vehicle. If you have comprehensive and collision, you may consider declining the rental company’s loss damage waiver.
Do You Have Personal Injury Protection?
You should also check whether your car insurance policy includes personal injury protection. This coverage pays the medical expenses for you and your passengers in a car accident if you are at fault.
Credit Card Rental Car Insurance Benefits
Depending on your credit card, one of the benefits could include rental car insurance. That means you might be able to decline the expensive insurance offered at the counter and save a bit of money.
All four major credit card issuers, Visa, American Express, MasterCard, and Discover, provide some form of rental car insurance coverage. It is always a good idea to double-check with your credit card issuer as there are a few credit cards that don’t offer coverage.
What About International Rental Car Insurance?
While a lot of vehicle insurance policies will cover rental cars in any U.S. state, most U.S. personal auto insurance policies will not cover you in Europe or other international locations.
However, your credit card might offer coverage for free. Check with your credit card company to be sure.
Be Prepared For Better Peace of Mind
Most of the limits and deductibles on your regular car insurance policy typically still apply to your rental car so long as you drive it for personal use.
If it’s a commercial or business rental, your personal car insurance coverage may not apply.
As always, if you want to be certain, be sure to check your car insurance policy or call your insurance agency to find out which coverages extend to your rental car.
Feel free to contact Jackson & Jackson Insurance Agents and Brokers for any questions with your car insurance policy. We offer a full-service insurance center with over 80 years of experience serving the local San Dimas, Glendora, and LaVerne communities. We offer all lines of auto insurance and homeowner insurance. If you have questions about policies or need to look at extra insurance coverage, we are here to help.