Should You Purchase Extra Insurance on Rental Cars?
When arriving at the car rental counter after picking up luggage, doesn’t it always seem like the same question is waiting: do you need extra insurance for the rental car? There’s a reason that the salesman tries so hard to close the deal: insurance is a major profit center for car rental companies.
Most of us don’t want to spend the extra money, but we have that nagging litany of “what if’s” playing inside our heads. What if something happens that my regular insurance doesn’t cover? What if I misunderstood the customer service person who said my insurance does cover it? What if I don’t want my personal insurance to be responsible for any possibility of an accident on a business trip?
It’s important to be armed with the facts; including that most car insurance does cover rental cars, so the extra expense may not be necessary. Still, to be safe, you should always ask your provider. In addition, following are some tips to help you decide whether to purchase the extra rental insurance.
First, is the car for business or personal use? Are you on vacation or on a business trip? On vacation? Then likely, your insurance is responsible. On a business trip, it is a legitimate, deductible part of doing business that your company may want to shoulder. Therefore, you would want the added insurance. Also that way, if something happens, your personal insurance rates are less likely to change.
While you’re checking with your insurance company, take a hard look at your policy. If your policy covers personal injury and liability, but not damage to your vehicle, then the costs of repairing the rental in an accident wouldn’t be covered. You’d want to purchase additional insurance at the rental agency for just such a possibility.
And did you know that collision coverage doesn’t cover you against lowering the value of the vehicle involved? It’s called “diminution of value” and can include the loss of use (by the company) while the car is being repaired.
You should also check with your credit card carrier. Some “concierge card” companies include insurance in any travel services purchases. This is particularly common if the card guarantees the booking or the website automatically charges you the full price at the time the car is contracted. The insurance is usually secondary to your personal car’s insurance, but it is there. (Also check the rules on using that insurance, which can be unusual, such as limited time for notification, etc.) The bottom-line is, if you’re paying an extra fee for booking by either the credit card or the website, check the fine print to see what’s included in that fee.
If you are considering the extra coverage, read the fine print in your rental contract. Some companies will sell you pricy coverage, but have very strict rules about how they operate and deal with your insurance company in the event of an accident. In the long run, it may be cheaper to purchase the extra insurance from the car agency. Find information online about the various rental companies’ insurance policies, how they work and what services they offer, before you are faced with the purchase contract at the terminal counter.
If you are traveling overseas, you may want to get additional coverage in that country. Different countries have different laws, but you don’t want your credit card to be “held financially responsible” for damages when buying the insurance could have saved you a lot of time and trouble abroad.
Again before renting a car, it’s always best to check the details of your policy and the policies of the rental car company you choose. And for more information about auto insurance products visit our website to request a quote.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages 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.