Car Rental Insurance
Rental car insurance may seem like an unnecessary
cost, but there are certain benefits that come with this
added expense. Here’s a look at whether you need car
If you have full coverage auto policy on your personal vehicle, you know you’re covered in case there’s an
accident, even if you’re at fault. But, when you’re driving a rental vehicle, you may need separate
coverage. If you’ve ever rented a vehicle, you were probably asked if you want to purchase car rental
insurance from the rental agency. Some people choose to get the insurance while others don’t citing their
full coverage policy will pay for any damage. Are you sure that’s really true?
Car rental insurance seems like a ripoff to some, but it has benefits and many state laws require them to
offer converage to renters. It costs from $9 to $25 per day for certain levels of coverage.
Collision Damage Waiver
Collision damage waiver or loss damage waiver waives your responsibility for damages to a rental
company. Instead, the car rental company takes the financial responsibility for any damages caused to
the vehicle while you were driving it. The waiver also includes a loss of use period during which the car
can’t be rented out because it’s being repaired. The car rental company loses money during these days
and if you don’t have the collision damage waiver, you may have to pay these costs in addition to the
cost for repairs. You may void out your waiver if you were driving under the influence of drugs or alcohol.
Liability insurance covers the medical and property costs if you injure another person or their vehicle
while you’re driving the rental car. Most state laws require you to have some type of liability coverage, if
not from the car rental company, then from your own car insurance provider or another company.
Personal Accident Insurance
Personal accident insurance pays for medical expenses for you and passengers if you’re in an accident.
However, your health insurance plan, if you have one, would cover these types of expenses, but only for
you or your family members if you have a family plan.
Insurance Through Your Auto Insurer
Your personal auto insurance may cover you if you have
an accident while you’re driving a rental car, but you
need to confirm this before you rent the car and before
you’re at the counter trying to make a decision. Also find
out which costs are covered and which are not. For
example, your auto insurance may not cover a car rental
company’s loss of use fee that occurs when the vehicle
can’t be rented because it’s being repaired. You could
end up paying that fee out of pocket even though your
auto insurer covered you.
Also, if there’s damage, you’ll have to pay your
deductible once you return the rental. You won’t have
time to come up with the money; they can just charge the
credit card you used to hold the rental.
You’ll have to make a claim with your insurance provider and could face a premium increase, even if the
accident wasn’t your fault.
Car Rental Insurance From Your Credit Card Issuer
Many credit card companies also provide rental car insurance coverage at no charge as a benefit to
their credit card customers. To get the benefits, you must pay for the rental in full with the credit card. You
also have to decline the car rental company’s insurance and waiver to invoke the benefits from your
credit card. A lot of credit card car rental insurance policies are secondary insurance, meaning they only
pay what your primary car insurance company doesn’t. You’ll still have to make a claim with your
Read the fine print to make sure your rental will be covered. There are lots of exclusions and if one of
them applies to you, the credit card company may not pay. Coverage amounts may be limited,
depending on the credit card issuer and the type of credit card you have. Certain vehicles, like
limousines and trucks, may be excluded from coverage. Long-term rentals may not be covered.
Rental car insurance may seem completely unnecessary until someone backs into you or scrapes the
side of the rental you parked on the side of the road. Explore your car rental insurance options before you
rent the car and if you decide to decline, be 100% certain that you’re covered elsewhere.
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