When to Purchase Rental Car Insurance

If you are planning to hit the road this summer, you might be thinking of doing so with a rental car. Before you begin your trip, you need to consider whether to buy car rental insurance. This many be a tricky decision to make, especially if you are already covered by your current auto insurance or credit card.

There are many reasons why you should get car rental insurance. One of these is that the insurance will protect you from expenses that may occur as a result of damage or loss to vehicle. When you buy rental insurance from the car rental company, you will be protected from the many out-of-pocket expenses that are associated with damage or loss occurring to the vehicle such as theft. Many people think that their car insurance policy (plus the coverage from their credit card) is enough. But before you make this conclusion, you need to read the rental document, or else you may end up learning the hard way; most of the cards only provide secondary coverage, which only serves to bulk up your car insurance policy. For instance, a Visa card may be a great asset, but the coverage may be rendered invalid if you do not follow their rules precisely. It is important to examine every card’s contract documentation. You should also realize that credit cards only offer coverage for theft, collision and damage. This is why it is important to read the documents.

The cost of car rental insurance is usually between $20 and $40 depending on your plan of choice. There is also a collision damage waiver which is referred to as a “loss damage waiver” or optional vehicle damage, and this can cost around $19 per day. This shifts the liability associated with collision damage from the renter of the car to the car rental company.

On the other hand, “liability insurance” is supposed to provide cover for up to $1 million. This cost between $7 and $14 per day. However, it is important to note that your personal auto insurance may already include liability insurance. You can pay an additional premium of between $1 and $5 to benefit from medical, ambulance and personal accident coverage for both the driver and passenger when an accident occurs.

Rental companies are supposed to have a statutory minimum liability coverage. This coverage offers protection to individuals who are involved in an accident when driving the rental car. This is the same minimum that would have applied to the personal coverage.

Even as you buy car rental insurance, it is important to avoid buying unnecessary insurance that only wastes your money. As a renter, you should check whether your personal car insurance policy or the credit card that is used for the rental offers sufficient coverage without the need for buying additional insurance. Many credit cards have theft and collision protection even though the benefits are secondary to the personal car insurance or coverage sold by the car rental company. The personal auto policies that have renter coverage may come with conditions. For instance, the policies may fail to cover rentals for business trips or may limit the coverage for the long-term rentals. These policies may also not cover rentals for people in foreign countries.