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Is Car Rental Insurance Really Necessary?

  • 3 min read

“Do you want to get automobile insurance?” That’s the question I’m asked every time I rent a vehicle. If you’re particularly careful, you might be tempted to say yes, despite the fact that comprehensive additional coverage is prohibitively expensive and actually doubles the cost of rentals. Fortunately, there’s a good chance you don’t need it.

Your Common Auto Insurance May Already Provide Coverage for Your Rental

In some situations, your regular vehicle’s liability coverage will apply to damage done to other cars or property as a result of using a rental car. If you have collision insurance as part of your standard policy, it may also cover accident-related damages caused to the rental car. Vandalism or theft of your rented automobile might be covered by comprehensive coverage on your typical automobile.

The coverage that is covered varies on your policy, so you should call your auto insurance provider before renting a car. You should also keep in mind that even full coverage under your primary automobile insurance might not cover everything, including loss of use and administrative costs, which the rental company will charge if there is an accident.

Rental Car Insurance May Have Been Covered by Your Credit Card Already

Supplemental benefits are available on certain credit cards, such as rental car insurance. To use this benefit, you must reserve and pay for your rental using the specified card. Terms and conditions differ widely, ranging from primary coverage—which won’t require you to make a claim under your normal insurance policy—to secondary coverage—which will assist with the deductible and other fees. In most situations, in order to receive a credit card company’s insurance coverage, you must decline any additional automobile insurance provided by the car rental firm.

Keep in mind that any insurance you receive through your credit card provider will have limits. You may not be able to rent certain kinds of cars, for example. Or the coverage may not cover losses incurred as a result of certain circumstances (such as on a dirt road) or particular parts of the vehicle (such as the wheels). Card providers are also known to limit rental periods. Make sure you understand what your credit card company offers before renting a car.

Sometimes, There May Be Other Rental Insurance Coverage That Is Beneficial

If you don’t have comprehensive or collision coverage on your personal insurance policy, it might make sense to buy liability coverage from the rental company. You may arrive at the same decision if your current car insurance policy has a high deductible. Furthermore, if you’re renting a vehicle for business purposes or intend to drive it into another country (other than Canada), you’ll almost certainly need additional insurance. Before going any further, give me a call to talk about your motor vehicle insurance declarations and restrictions.