Rental Car Insurance in California: Is It Really Necessary?

Your trip to California is going to be the highlight of the year. Not only will you be spending time on some of the most beautiful beaches in the world, but you will tour Hollywood and hopefully run into a celebrity. You have your flight booked and need to reserve your rental car for the time you’re there.

When you call to make the reservation, the agent asks if you want to purchase rental insurance that will cover any damages that may happen while you are renting the car. You wonder if buying the rental company’s insurance is necessary. Does your regular auto insurance cover rentals? Is there any other way to get coverage?

The following is a breakdown of what you need to know in order to be properly protected and that you don’t waste money buying more insurance if you don’t need it.

What is Rental Car Insurance?

What the rental car companies offers is not so much insurance as it is a damage waiver. The cost of the waiver is $15 to $25 per day, according to Nerdwallet. These waivers protect you from paying any damages if your rental is involved in an accident or is otherwise damaged. But is a damage waiver really necessary? In some cases, there are better alternatives.

Car insurance California

It’s good to know your insurance options before reserving a rental car.

Alternative #1: Your Existing Auto Insurance

If you own a car, your auto insurance may cover damage to a rental under your name. Keep in mind that if any damage does occur, you will have to pay the deductible under your insurance, whereas damage waivers cover the entire cost. Also, if the damages exceed the limit of your auto policy, you will be liable for those costs. Additionally, things like loss of use while the vehicle is being repaired may not be covered by your policy. Finally, some carriers only cover rental vehicles as a substitute for your primary vehicle while it is out of service, not pleasure rentals.

Alternative #2: Rental Coverage Using Your Credit Card 

The major credit card networks offer rental car insurance at no additional cost that provides some coverage of damage-related costs through the card used to rent the car. The amounts covered vary by issuer, and this coverage is usually secondary, meaning it steps in to cover the amounts not covered by your primary auto insurance, if you have it. If you decide to rely on rental car coverage through your credit card, you should clarify the coverage amounts offered to make sure they are sufficient for your needs.

Alternative #3: A Rental Insurance Policy

If you don’t want to risk having to file a claim under your regular insurance (not to mention paying the deductible), you can get a standalone car rental insurance policy, usually at a lower cost than buying a damage waiver from the rental car company (starting at under $8 per day in most cases). A standalone policy can make sense if you don’t have other car insurance, such as someone who doesn’t own a car. Be sure that you understand the coverage you are getting and the terms before purchasing.

You can also get a quote on car insurance that includes rental coverage from AIS now. AIS Instant Quotes® compare the rates of many companies, and offers different coverage levels so you can find the best policy for you.

The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

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