You’ve just finished a long flight, gathered your luggage, and taken a shuttle to the rental car counter – all with your kids in tow. You just want to get in the car and get to your hotel, but first, you have to go through the rental car agreement. One of the most confusing elements of travel is wondering – do I need rental car insurance? There are so many different extra coverages offered to you, and it’s hard to know what you need.
Some say that your own automobile insurance policy should cover you. Others say that your credit card may cover you. And, if you talk to the car rental companies, they’ll tell you that you need supplemental insurance.
It can be a stressful situation, and you definitely don’t want to be left uninsured should something happen. So, who is right? Do you need rental car insurance? According to some experts I spoke to, it seems to really depend on your situation.
Note: Your own situation may vary. Please review your own situation and talk to your insurance/credit card companies before making a decision. This information is provided as just part of your research.
Do I Need Rental Car Insurance?
Is a rental car covered by my insurance? What exactly is covered?
Great question – while you may not think about your regular personal car insurance coverage, it’s definitely possible that you have some coverage there. But be careful – it may not include everything.
Heather Mosher, CISR from Vast Solution, explains, “It used to be that we were confident in telling clients not to think twice about renting that car on vacation. After all, it had made sense for so many years that your personal auto policy would pick up the slack if you damaged a rental car in your possession. It wasn’t until the last 3-4 years that this has changed”.
According to Mosher, rental car companies have started charging some additional damage fees, including diminished value, appraisal fees, and administrative expenses. These charges aren’t usually covered by personal automobile insurance, so if you get in an accident, you may find yourself not completely covered.
The takeaway? Call your personal auto insurance company to see if your auto insurance policy includes car rentals. Also ask what ISN’T covered, so that you aren’t left covering loss on your own in case of an accident. Don’t just focus on car accidents. You’ll want to ask about what happens if the car is damaged or stolen too.
So, do credit cards, or travel insurance complete cover rental cars?
Depending on your credit card, you may have some car rental insurance coverage. If you’ve got multiple cards in your wallet, this guide is very useful in determining what is the best credit card to use. But I still recommend doing additional research, and definitely ask the company what is covered.
A travel insurance policy may also provide coverage. Again, this can vary based upon the specific policy purchased, and it’s always a good idea to specifically ask about whether that insurance covers a rental car, including collision coverage and liability coverage.
Damian Tysdal founder of TravelInsuranceReview.net explains, “Some travel insurance policies include coverage for rental car damage, including the loss of use damages. If you are purchasing travel insurance anyway, this can be a valuable additional benefit. Some credit cards offer ‘travel protection’ as a side benefit. While this is not an equal substitute for a travel insurance policy, the rental car coverage on credit card ‘travel protection’ is fairly competitive. Many will offer the loss of use coverage”.
What to do before vacation
If you are renting a car, it’s best to check with your travel insurance, credit card, and personal auto policy to see exactly what they cover. If it’s not everything, you may want to opt for the rental car insurance. If you don’t, and something happens, you may find yourself with a bill that you didn’t expect to receive. You may also ask what the process is to file a claim so that you understand how it works.
It’s also important to take into account the value of the car you are renting versus the value of the car you insure through your regular car insurance.
When asking about credit card coverage, you should also ask your credit card issuer about purchases made through a third party. For instance, if you purchase a package through JetBlue Vacations or Southwest Vacations. Since those charges are paid to the package provider, and not the rental car company, you’ll want to see what is covered.
Do you purchase rental car insurance when you go on vacation?
Originally published April 2012