Do I Really Need Car Rental Insurance?

Most travelers have often questioned if they actually need rental car insurance when they are asked by the friendly representative who is behind the rental car counter. After a long and tiring flight, many simply respond with “yes” in order to quickly alleviate any doubts or fears, thus ensuring that they are absolutely covered if they are in an accident.

Before buying rental car insurance, travelers should consider these three questions.

1. What Type of Rental Car Insurance is Available at Car Rental Agencies?

Most car rental agencies will offer customers four types of insurance to purchase.

• Personal Effects Coverage: Offers reimbursement for stolen personal items while renting the car.
• Collision Damage Waiver: Protects against damaged or stolen vehicle charges from the car rental agency.
• Supplemental Liability Protection: Provides coverage for other people’s property if the renter caused the accident.
• Personal Accident Insurance: Provides coverage for the injuries or death of the driver and passengers in the rental car.

2. What Rental Car Coverage Might Renters Already Obtain?

• Personal Auto Insurance: Many policies offer the same amount of protection for a personal car and rental car. Depending on the policy, the coverage may include liability, collision, or comprehensive insurance. A policy may even cover medical payments. However, some insurers will not cover car rentals in a foreign country or car rentals used for business purposes. Renters are encouraged to contact their independent insurance agent to verity the car rental coverage.
• Credit Card: Although most credit cards offer some degree of protection, the amount of coverage can vary widely. Most commonly used as a secondary source of protection, this type of coverage is designed to supplement the auto insurance.  After the auto insurance is applied, the credit card can cover the remaining expenses related to collision, damage, or theft.  The credit card coverage can apply once the renter has declined the rental agency’s collision damage waiver. Afterwards, the car can be paid in full with the protection that the card provides. Contact the credit card company to determine the car rental coverage.
• Health and Life Insurance: Health and life insurance policies often provide coverage for the car renter if he/she is in an accident. In addition, many  homeowners insurance offers personal property coverage to repair or replace lost, damaged, or stolen essential belongings when using a car rental. As with renters insurance and condo insurance, the deductible and policy limits will apply.

3. What Rental Coverage Might Renters Be Missing?

Depending on the circumstances, some renters may be prone to loss of use and diminished value fees if the car is in an accident. Loss of use refers to the income that the rental agency will lose when the vehicle is in the shop for repairs. Diminished value is a term used to describe the reduction in a car’s market value following an accident and repair. Although some credit cards may cover these costs, often the card company
requires specific documentation that may be hard to obtain from a car rental agency.

Travelers are encouraged to contact their independent insurance agent as well as their credit card company to review the car rental coverage options. Afterwards, renters should have the necessary knowledge to make informed decisions the next time they are conversing with the friendly representative who is behind the car rental insurance counter.

Breathe Easy Insurance provides drivers with expert professional advice concerning the purchase of Auto, SR22 and Home/Renters Insurance. Please call 866.822.7755 to receive a free quote today.