Do I Need Rental Car Insurance?

You’re standing at the rental car counter and they ask, “Do you want insurance with that?”

Most travelers have the vague notion they don’t really need to buy rental car insurance – that it is somehow covered already. With just enough doubt in their minds, and the need to make a quick decision, they buy it just to be safe.

Do I need to buy rental car insurance?

There isn’t a one-size-fits-all answer. However, you can likely reach a conclusion you’re comfortable with by considering these 3 questions.

  1. What Types of Insurance Are Available?

Typically, car rental agencies will offer 4 types of insurance to purchase:

  • Collision damage waiver – they won’t charge for a damaged or stolen vehicle.
  • Supplemental liability protection – you’re covered for costs to others if you cause an accident in the rental.
  • Personal accident insurance – pays for injuries or death of the driver and passengers of your rental car.
  • Personal effects coverage – reimburses you for stolen personal items while renting.
  1. What Coverage Do I Already Have?

Your car insurance likely will provide the same level of coverage for your rental as it does for your own car. Usually includes liability insurance, and may include collision, comprehensive and medical payments, too. There are exclusions, however. Some insurers won’t cover rentals in a foreign country, or rentals that are being used for business. Ask your agent to verify your coverages.

Consider your homeowners insurance, you may have personal property coverage to help repair or replace valuable belongings that are lost, damaged or stolen while you’re in a rental. Your deductible and policy limits will apply.

  1. What Coverage Might I Be Missing?

In the event something happens to the rental you may be looking at loss of use and diminished value fees that your regular policy may not cover. Loss of use is the income that the rental agency loses due to the vehicle being in the shop for repairs, and diminished value is the calculated reduction in a vehicle’s resale value as the result of an accident.

Next time you find yourself at the rental counter ask these questions and you will be able to make an informed decision.