Is additional rental car insurance necessary?

If you’ve got auto insurance, health insurance, homeowner’s insurance, and a major credit card, you may already have the kinds of protection the rental car company is offering. But you won’t know this until you reacquaint yourself with the details of your various insurance coverages and the fine print on your credit card agreement. It’s never a good idea to assume you have certain coverage.

If you can’t figure it out, call your insurance and credit card representatives and ask for help. While you’re at it, find out how much coverage you have. That way you’ll know if you need coverage, need to supplement existing coverage, or whether it’s safe to decline the rental company’s insurance options.

Here’s a brief description of the insurance options car rental companies typically offer:

  • Collision Damage Waive:  With this option, liability for any vehicle damage shifts from the renter (you) to the rental car company. As long as the vehicle was operated legally at the time the damage occurred, your rental company will cover repair damage if you signed this waiver.
  • Liability:  Like your standard auto insurance, this liability protects you if you are found at fault in an accident involving a rental car. Check your auto insurance to see if it already covers rental cars. Coverage costs range from $1 to $5 per day and usually offers protection up to $1 million.
  • Personal Accident Insurance:  This coverage pays medical expenses, including ambulance service, for you and other passengers in the rental car. It costs between $1 and $5/day, but you might already have this type of coverage under your health insurance policy. So check there first.
  • Personal Effects Coverage:  This coverage protects your personal effects if they’re stolen from your rental car. If you take valuable items like laptops, camera equipment, and golf clubs with you while you travel, this might be worth having. It’s not usually included in standard auto insurance and costs between $1 and $5/day. If you have a scheduled endorsement, your homeowner’s insurance may cover certain items. But again, it’s important to know the insurance policy details, especially coverage limits and exclusions.