Do you really need rental car insurance, and if so, how much does it cost?

You are seated at the airport’s rental vehicle desk. Your shoulders droop even further when the rental vehicle representative asks if you want to get insurance since you’re fatigued and all you want to do is get your car and drive to your hotel. Although you’ve heard it’s a waste of money, you’re hesitant to say no out of fear. And you’d be spending quite a bit of money on that: Depending on the coverage, insurance might add up to $40 each day.

Years ago, shrewd tourists chose not to purchase the rental automobile insurance. They believed that their standard car insurance would protect them. Do you still require rental car insurance in the modern era? It varies, as is the response to a lot of questions on the topic. What, then, warrants your requirement for rental insurance? Let’s examine the factors.

First, take into account the insurance you now have. How effectively is rental car use covered by your standard auto policy? Although many plans cover rentals, make sure to read the fine print or call insurance agent before you go.

Some people purchase the bare minimum of mandatory auto insurance or opt for large deductibles in order to save money on their normal auto policy. The majority of states mandate that automobile owners carry liability insurance, which covers you in the event that your vehicle injures someone else or damages their property. If you want to add collision coverage, it will help cover the cost of mending your vehicle in the event that it collides with something or another vehicle. If your car is damaged by something other than a collision, like theft or flooding, comprehensive coverage will pay to repair or replace it. You might not want to take that chance on a pricey rental car, even if you opt to forego collision and comprehensive coverage on your own vehicle or have a large deductible (the amount you pay before insurance kicks in). You could want the rental car insurance if that’s the case.

Numbers also have an impact. Before declining rental car insurance, make sure the person driving the rental car has their own coverage if they aren’t covered under your regular insurance.

A word about numbers: beware of nickel and diming. Rental agencies frequently demand extra fees for things like depreciation, “administrative” costs, and loss of use of the car while it’s being repaired that your ordinary coverage won’t cover. If your credit card won’t cover them, you could choose to purchase the collision damage waiver from the rental company (an agreement that, in most cases, you won’t have to pay for damage to the car). Many credit cards, however, offer supplemental insurance that pays for costs and expenses that your standard auto policy won’t cover. Remember that this only applies if you use that credit card to pay for the entire rental and decline the rental company’s insurance. If a driver who isn’t listed on the rental agreement was the one who caused the damage, it won’t be covered. Additionally, the cards typically won’t pay anything until you’ve used up all of your regular insurance, and they won’t automatically cover certain things like loss of use. Getting a credit card that prioritizes insurance coverage for rental cars can be in your best interest.

Depending on the regulations in the state where you drive, you could be obliged to purchase some rental car insurance if you don’t own a car and don’t have regular auto insurance. If you can’t afford the whole cost of an accident, getting coverage is probably a good idea even if you’re not required to. Most rental car businesses offer coverages for personal injury and death of the driver and passengers, damage to personal property, and supplementary coverage for harm or damage to others for those who don’t have regular policies or whose policies don’t cover rental automobiles. As we already stated, it depends.

Nota d’auteur

While I was waiting to pick up my rental car, I texted my sister—who travels more frequently—to convince myself that I didn’t need to purchase the insurance offered by the rental company. I was quite eager in learning more about this issue because every time I decline the coverage, I experience a “what if” moment of uncertainty.

Finding out that my regular auto policy, like most, does extend coverage to automobiles I rent, gave me peace of mind. I was unaware of the additional charges rental companies frequently put on in the event of an accident. The biggest shock, though, came when I realized that, so long as I use that credit card to pay for the rental, I have some protection beyond what my regular insurance covers. Who knew that using a credit card might provide you benefits you didn’t even know you wanted? I was once more reminded of the value of completing some study before you find yourself in that decision-making situation.

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