Are you planning to go on a vacation and considering renting a vehicle? Maybe you are going to be taking a road trip, and you do not want to take your own car. Perhaps you are flying to a location and then plan to rent a vehicle when you arrive. For that matter, you might just need to have a rental car that can help you to get around town when your vehicle is in the shop.
Regardless of why you need the rental car, you are going to be faced with the age old question – do you really need to get rental car insurance? The answer to this question, as with so many things in life, is that it depends. Let’s get a better idea of what this insurance is, the benefits it offers, and then we will consider whether it is worth it or not.
What Is Rental Car Insurance?
Rental car insurance is just what it sounds like: It is insurance that is used to cover a vehicle that you rent from a company such as Hertz, for example. If you were to get into an accident, or if someone was to damage the vehicle, the rental car insurance would be used to pay for the damages, so the money would not have to come out of your pocket.
This is typically called a loss damage waiver or a collision damage waiver and it can be quite valuable, as it will cover any type of damage to the vehicle, even things that your insurance might not cover. It is important to keep in mind that this is not truly insurance, but rather a waiver that says the rental car company will not try to collect damages from you for anything that happens to the vehicle. This could also cover car theft and break-ins. Some only cover the rental vehicle up to the limits of your own insurance policy or the value of your vehicle, so make sure you ask plenty of questions before you rent a car and decide to forego insurance.
The car rental insurance can also offer you liability protection that pays for damage that you might do to another person’s vehicle or property while you are driving the rental car. The limits for the damage will vary, but it does not typically exceed $1 million. Those who do not have their own insurance will definitely want to buy this rental car insurance. However, if you have your own liability coverage for your own vehicle – which is required by law – you may find that your own insurance will transfer, but it's important to check with your insurance company to verify.
The car rental company will often offer personal accident insurance, which is used to cover medical costs for yourself and for those who are passengers in your vehicle if you happen to be in an accident. This can cover the medical care, as well as the cost of an ambulance, medical care, and even death benefits. Those who already have their own health coverage and life insurance are not likely going to need this coverage. However, those who do not have those types of coverage may want to consider it.
What if you were to have items stolen out of your vehicle? There is generally coverage through the rental agency for this. The personal effects coverage will take care of the cost of your belongings in case they are stolen from your rental car. If you have a homeowner’s insurance policy or renter’s insurance though, you may not need this type of coverage. These types of coverage can cover your possessions even if they are not at your house.
If you have your own various types of insurance, then there is a good chance that you will not necessarily need to have this coverage from the car rental agency. There may also be times when you want to have the added coverage, or when you want a damage loss waiver, just to be on the safe side.
What Are the Benefits?
When you choose rental car insurance, you will find that it will give you some additional peace of mind, even when you have your own coverage. If you have complete rental coverage, it means that you will be covered for any type of damage that occurs with the vehicle. This can include paying for everything no matter who might be at fault.
In addition, you will find that it is great for those people who need to rent a vehicle, but who do not have car insurance of their own. If you don’t own a vehicle, and you don’t drive often, there is certainly no reason to have your own car insurance. Having rental car coverage is a fast and simple way to get the coverage you need.
However, you will want to keep in mind that some of the credit card companies offer some type of rental car coverage, as long as you use that card when you rent the vehicle. Some of the cards that offer this include the Chase Sapphire Preferred Card, Chase Sapphire Reserve, United Explorer Card, and the United Mileage Plus Club Card. This may be something that you want to check into with your own credit cards before you buy rental car insurance. Just make sure that the coverage through the card is going to be enough to provide you with the safety that you need.
Are There Cons to Rental Car Insurance?
Of course, even though there might be some pros to rental car insurance, there are certainly going to be some cons associated with the coverage, as well. One of the biggest of those cons is the fact that the coverage from the rental company may not be required at all. For those who already have comprehensive and collision coverage on their auto insurance policy, there is a good chance that the policy you have is going to provide enough coverage for the rental cars that you choose.
One of the other potential problems with this type of coverage is that it might not be quite as helpful as you imagine, especially when it comes to injuries. The rental car insurance might not give you enough coverage to pay for all of the medical expenses of those who were injured in an accident. This is especially true if you do not have other coverage through your regular car insurance.
Hidden exclusions could also be a problem in some cases. The coverage might have a condition that is in the fine print that voids out the contract in the event of an accident. While this might not be the case with all coverage options from all rental companies, it is something that you will have to consider. If you are going to get rental car insurance, you need to make sure that you read and understand the policy first.
You might also find that some of the policies and waivers from the rental company are going to be geared more toward protecting the company that issues the policy rather than you, the renter.
Is Rental Car Insurance Worth It?
You may want to consider purchasing insurance from the rental car company if you do not feel that you have adequate (or any) coverage through your own insurance policies. If you would like to have some additional coverage, though, then you might want to talk with your usual insurance company first to see if they might have any type of additional or supplemental coverage that you could get when you are out on a trip and renting a vehicle.
Resources:
https://www.nytimes.com/2016/03/06/travel/rental-car-insurance.html
http://www.autos.com/auto-insurance/pros-cons-of-rental-car-insurance
https://www.nerdwallet.com/blog/credit-card-benefits/rental-car-insurance/
https://www.superpages.com/em/pros-cons-car-rental-insurance/
https://www.superpages.com/em/pros-cons-car-rental-insurance/
