Should You Purchase Rental Car Insurance
Has this ever happened to you? You’re at the car rental counter when you’re asked the daunting question: Do you want to purchase rental car insurance? You ask yourself: Do I need it or does my personal auto policy cover the rental vehicle? To avoid a deer-in-the-headlights look, read the answers to some of the most common rental car questions.
This content is provided courtesy of USAA.
When do I need the coverage offered by the rental car company?
It depends on the level of coverage you already have, either through your auto policy or your credit card company.
Purchasing insurance from the rental car company usually is not necessary because your auto insurance coverage transfers to the rental car, says Angela Preciado, director of USAA’s auto product management.
However, there are many variables to consider. In some cases, the supplemental coverage the rental car company offers is needed, depending on your insurance coverage.
|STOP! Two calls to make before you rent a car|
|1. Call your personal insurance provider to understand your policy and coverage terms.2. Call your credit card company to find out what coverage it may provide.|
For example, if you have liability coverage, injury to another person or damage to their property with the rental car usually will be covered up to your policy limits. If comprehensive and collision is part of your policy, that coverage would extend to the damage to the rental car.
Full coverage from the rental car company can add up to $25 or possibly higher a day to your bill. For a short-term rental, the cost could be worth it. Depending on your auto insurance policy’s coverage, the out-of-pocket expenses for repairs could add up.
Preciado warns to be on the lookout for little-known fees from the rental firm if an accident does occur.
“A rental company can hold you responsible for something called indirect damages,” Preciado says. That includes a loss of profit to the company while the car is undergoing repairs and can’t be rented out, and certain administrative fees. Before renting, check with your insurance and credit card companies to see if those costs are covered.
Am I covered if I drive a rental car to another state or for a business trip?
In most cases, the answer is yes, but it’s important to check with your insurance provider or credit card company to make sure.
What kind of coverage do I have if I rent a car in Europe or somewhere else outside the United States?
Generally, your U.S. auto insurance doesn’t cover you when you rent a car overseas. Be sure to check with your insurance and credit card companies before you travel. Sometimes coverage depends on where your policy was issued and in what country the car is rented. This is where insurance directly from the rental company can come in handy.
|Helpful insurance terms|
|Liability coverage helps protect you from damage you may cause as a result of your negligence in an auto accident.Collision helps protect your vehicle from damage caused by impact with another vehicle or an object, other than an animal.Comprehensive helps protect your vehicle from damage caused by accidental loss not caused by collision, such as impact with an animal, theft, vandalism and hail.|
The Insurance Information Institute also warns that most U.S. insurance liability policies won’t cover bodily injury caused in Mexico. It also is becoming more difficult to rent a car to drive into that country because of rising crime rates and violence. If you are planning to drive your vehicle or a rental into Mexico, it is best to purchase, at the least, a civil liability policy at a storefront insurer near the border that specializes in short-term policies for Mexico.
Does it matter what type of car I rent?
Your primary policy will cover the same circumstances for the rental car as it would for the vehicle you own.
Say you have a 2001 Honda with liability, comprehensive and collision coverage and get into an accident in a new luxury SUV rental. The policy will still pay up to the actual cash value of the rental, even if it is higher than the value of the car listed on your policy, Preciado says.
What happens if the rental car is broken into and my personal things, like my suitcase or laptop, are stolen?
Another thing to consider is coverage for personal effects. When traveling with digital cameras, laptops and iPods, the chance something will get lost or stolen while traveling is high. The costs to replace these items can really add up.
If you have homeowners or renters insurance, particularly the form that includes replacement value coverage for personal property, your current insurance should cover this.
Who do I contact if I get into an accident?
After moving to a safe location, you should call the police and 911 if there are any injuries. Then, you should contact your insurance company and the rental car company.