How to Make Sure Your Rental Car Is Properly Insured

How to Make Sure Your Rental Car Is Properly InsuredIf you’ve ever rented a car, you know you can buy auto insurance as part of your rental agreement. While the car rental agent will likely give you a good sales pitch about why spending an additional $9 to $15 a day for insurance is the safe and smart thing to do, blindly following that advice may make you spend money on insurance coverage that you already have.

Nobody expects to have an accident or cause damage to a rental car, but even if you’re the safest driver in the world you can accidentally rear-end somebody, or spill soda in 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 the theft of or damage to your car regardless of who is at fault, it may pay for damage to the rental car, as well. Likewise, your auto liability coverage could pay for damage or injuries that you cause to others in an accident in your rental car. However, before you go on a trip, take a few minutes to call your insurance agent and ask 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 that credit card to rent the car. Again, check with your card issuer to find out what specifically your card will pay for. Some card issuers are more generous than others, and cards geared toward travelers may have particularly good rental car insurance coverage. On the other hand, some credit card insurance agreements have very specific exclusions to coverage. For example, Visa cards typically won’t cover what Visa calls ‘expensive or exotic’ vehicles, including Aston Martins and Bentleys.

Even with these options for rental car coverage, there are a number of reasons why you may prefer to buy the insurance products offered by the rental car agency.

  • If you use your personal auto insurance, your premium may go up if you file a claim. If this is a concern, the rental car coverage would keep you from having to get your auto insurance provider involved if you have an accident.
  • If you have a high deductible on your insurance policy, meaning you must pay a certain amount, (deductible amounts are typically $500 and $1,000) before your insurance provider pays out on a claim, you may decide to take the coverage offered by the rental car company so you wouldn’t have to pay the deductible.
  • If your personal auto insurance policy or your credit card doesn’t cover certain things, you may choose to buy the rental car insurance. For example, some insurers won’t cover certain types of rental vehicles, such as large trucks and passenger vans so you’d have to buy the rental car coverage if you rented one of those vehicles.

If you decide to buy insurance from the rental car company, understand that there are a number of different types of products to choose from.

  • A loss damage waiver, also known as a collision damage waiver pays expenses that result if your rental car is damaged or stolen. While it’s not technically an insurance product, it relieves you of the responsibility of paying for damage to the rental car.
  • Supplementary liability insurance pays for injuries or property damage you cause to others while driving the rental car.
  • Personal accident insurance pays for the medical expenses and the accidental death of passengers in your rental car as well as yourself.
  • Personal effects protection pays for your possessions or those of your rental car passengers if they’re lost or damaged in the rental car.
Laura Adams
She is senior insurance analyst for Bankrate Insurance and writes for CarInsuranceQuotes, a leading online provider of free car insurance quotes and news. She is also a personal finance expert and award-winning author of several books, including “Money Girl’s Smart Moves to Grow Rich.”

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