You’re standing at the rental car counter, credit card in hand, and the clerk asks whether you want to purchase rental care insurance. Just a few seconds previously you thought you had everything under control, but that simple question throws you for a loop. Do you need rental car insurance?
According to Ed Perkins, you need to consider both liability and collision coverage when deciding whether you need rental car insurance. Liability coverage pays for damage you cause to someone else or to his or her property, while collision coverage pays for damage you cause to your own vehicle.
Check Your Policy
Before you decide if you need rental car insurance, pull out the policy documents on your car insurance coverage and read them carefully. It should say whether or not the policy covers you on a rented vehicle, and if so, in what amount.
In most cases, your liability car insurance will extend to a rented vehicle for personal use. If the policy documents don’t answer this question, you might have to call your agent to verify this.
Some policies may cover liability but not collision or comprehensive in a rental car. Certainly, if you carry only liability on your personal vehicle, collision won’t be part of the package for your rented vehicle.
Check Your Credit Card
It’s difficult to rent a car without a credit card, so check the cards in your wallet. Many credit cards offer coverage for certain situations when you rent a car with this, though the coverage is limited. It should only be used in conjunction with your personal car insurance policy.
There might be rules about how you can use the credit card for insurance purposes, and it might be necessary to buy rental car insurance to supplement it, especially if you don’t have a separate policy. Make sure to read the fine print carefully and call the issuer if you have any questions.
Why Buy Rental Car Insurance?
It’s usually quite expensive and it’s doubtful you will need it. So why would any sane person buy rental car insurance?
Simply put, you need rental car insurance if you aren’t covered in other ways. If you hurt someone or damage property, you’ll be liable for the costs of repair and/or treatment, and you are just as likely to get into an accident while driving a rental car as you are with your own personal vehicle.
Since rental car insurance is so expensive, it is best to look for other ways to cover it. As mentioned above, your credit card and auto insurance policy are the most likely sources of coverage, but make sure they provide sufficient insurance to cover potential losses.