Do You Need Car Rental Insurance on Your Vacation?

Off the plane with your luggage, so close to starting your vacation, but now you’re standing at the car rental desk listening to an agent try to persuade you into purchasing additional insurance coverage. Do you take it? Before you initial the decline waiver in 6 different places, here are a few things to consider. 

Does an Existing Auto Policy Provide Coverage?

First and foremost, the person behind the rental counter is usually not a licensed insurance professional. They may not understand the entirety of insurance laws and won’t know if your personal auto policy covers you when you rent a vehicle. Make sure to contact a specialist and find out if your auto policy includes coverage for you when you rent a car.

Collision and Comprehensive Coverages

If you have insurance for your own cars, including collision coverage and comprehensive coverages, you won’t need the rental insurance for these coverages (this is for non-business purposes).  Important to note, both of these coverages have deductibles that will be applied to the damage of rental cars as well. However, they will not cover any charges that the rental car company incurs for “loss of use” while the rental car is being repaired.

If You Don’t Have Coverage

Now, if you don’t have both of the above coverages, your personal auto policy will not cover damages to the rental car if it’s vandalized, stolen, or damaged. You can risk it and not buy the company’s collision or loss damage waivers and hope there won’t be an accident. You’ll save money, but it might not do much for your peace of mind.

Do Credit Cards Offer Coverage?

It’s common that most credit cards offer car rental insurance, although most people aren’t aware that it’s classified as secondary insurance. That is, once your personal auto policy has been exhausted it will then pay out. Read the fine print thoroughly as some credit cards will cover you for a minimum amount of days and won’t cover certain types of vehicles such as SUVs, vans or luxury cars.  Some credit cards will only cover certain countries and exclude others. If credit cards offer auto rental coverage, you’ll want to look for the companies that offer primary coverage. Make sure to contact your credit card company.

What About Damage to Another Vehicle?

What if you damage someone’s vehicle or property, or seriously injure someone? Most rental companies are required by law to provide state-mandated minimums for liability coverage, but the amounts are low. If you’re in a major accident, you may be sued for more than you’re covered for, which will leave you in a financial crisis. Hospital bills and property damage can add up quickly to tens or hundreds of thousands of dollars, and someone has to pay those bills.

Be smart and well informed before you rent a car and know that not all coverage is created equally.  If you want peace of mind and minimum hassle, it might be in your best interest to take the insurance offered by the rental company, but know it will come at a hefty price. Otherwise, contact your auto insurance agent or a specialist at H&K Insurance about whether you need to buy the car rental insurance coverage.