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Rental Car Insurance: To Buy or Not to Buy

Did you purchase the additional insurance the rental agent offered you the last time you rented a car? It sounded good, right? After all, it only costs a few extra dollars per day, and you get peace of mind of knowing should anything happen while driving the car you are covered financially. But, is buying more insurance for a rental car really necessary, or are you just throwing your money away? The answer is: It depends. 

Types of Rental Car Insurance

Before you can determine whether it is a good idea to spend the money on additional insurance, you ought to know something about the insurance car rental companies usually offer. Although each company may have slightly different policies, the most commonly available ones include liability, personal effects coverage, personal accident, and collision (or loss) damage waiver, which is not exactly insurance but can help protect you from out-of-pocket expenses. 

  • Liability insurance helps to cover the expenses relating to damage to another person’s personal property or the cost of providing medical services to another person who you injure in an accident. 
  • Personal effects coverage may provide money to help pay for personal items which someone may steal from your rental car. 
  • Personal accident insurance covers the medical bills for someone inside your car who could get hurt during an accident. 
  • Collision/loss damage waivers are perhaps the most confusing option. These waivers will prevent the rental car company from charging you for repair costs or loss of revenue caused by a lengthy repair.

So, Do I Need to Buy Additional Rental Car Insurance or Not? 

Now that you know a little something about the typical insurance rental car companies offer, are any of them worth the added expense? To answer that question, you need to dig out your car insurance for your vehicle since your existing policy may already cover you for most of the same situations as a car rental company’s insurance policy.

An excellent example of this is liability insurance. Most drivers with decent insurance policies will not need to purchase additional liability insurance for their rental car since their own policy covers any car they drive. When it comes to buying additional collision coverage, you can give it a pass as long as you have as part of your existing insurance policy. Of course, if you are worried about your insurance company raising your rates due to a claim, you may still want to opt for it.

That pretty much covers the cost of damage to other people’s property, but what about an injury to the people in your own car or the theft of your personal property?

Well, some drivers may already have personal injury protection or medical payment coverage as part of their existing policy. If this is the case for you, then you need not consider paying for personal accident insurance from the rental company. However, drivers who don’t have this type the coverage or adequate health insurance may want to pay for it.

As for theft of your personal property, some renter’s or homeowner’s policies provide partial compensation when a thief steals “off-premise” items. If your policy doesn't include “off-premise” items, or if you want more coverage then your policy offers, the rental company’s insurance may be a good buy for you. 

Are you still thinking you may need to buy more insurance for your rental car? Then it is time to give your credit card company a call. Most credit cards provide additional car rental insurance as one of their benefit as long as you use it to pay for the full cost of renting the vehicle and you adhere to the company's regulations. A representative from your credit card company can give you all the details. 

Whether you are renting a car for business or pleasure, make sure your rental car company isn't taking you for a ride. 

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