Do You Need Rental Car Insurance?

What Does Rental Car Insurance Cost?

You may pay $10 to $30 a day for a loss damage waiver alone. If you opt for supplemental liability, add another $10 or so. Personal accident insurance and personal effects coverage could add another $5 each to your tab.

Add everything together, and you could easily pay $40 a day to be fully covered by rental car insurance.

Are You Already Covered?

Before you buy another type of policy, think twice. Rental car insurance is often, though not always, redundant if you have other common safeguards in place. Following the steps below can help you determine whether rental car insurance is actually a waste of money for you.

Step 1: Check your regular car insurance policy.

If you don’t own a car and aren’t already an insured driver, you can skip to the next step. But if you’re like most people, you may already be covered under the policy that keeps you legally on the road in your day-to-day life. Here’s what you need to find out:

Do you have adequate liability insurance?

Just about everyone will have liability coverage, which is usually required by state law and helps pay for others’ medical costs and property damage when you’re at fault in a crash. This liability insurance typically carries over when you’re driving a rental car, so as long as you’re comfortable with the level of coverage you have, you can usually pass on supplemental liability.

Do you have comprehensive and collision coverage?

Fewer people (especially those with older cars) have comprehensive and collision coverage. Comprehensive coverage insures your car against non-driving-related calamities such as theft, fire, or vandalism. Collision coverage helps pay for damage to your car from a crash, whatever the cause may be. Many people drop these pricey coverages once it no longer makes sense to make major repairs to an aging, high-mileage vehicle.

If you have comprehensive and collision, you may consider declining the rental company’s loss damage waiver. However, note that there is some gray area here. One of the potential pitfalls is that the rental car company may still charge you for loss of use if you damage one of their vehicles. These fees recover money the company could have made by renting out the vehicle during the repair process. Unfortunately, this is something that’s less commonly covered by insurance and something that is worth asking about if your policy is unclear.

Step 2: Check your health insurance policy.

If you’ve got adequate health insurance, the rental company’s personal accident insurance is probably overkill. This is especially true if you also have medical payments and/or personal injury protection through your regular car insurance.

Step 3: Check your homeowners insurance or renters insurance policy.

It’s always worth double-checking, but your homeowners insurance or renters insurance policy should cover your belongings wherever you take them, even if they’re stolen from a rental car. That means it’s usually safe to decline the rental company’s personal effects coverage.

Step 4: Check your travel insurance.

If you’ve purchased travel insurance for your trip, see whether car rental collision coverage is included. This kind of coverage is typically similar to what the rental company’s loss damage waiver would take care of, sometimes at a lower cost.

You’ll want to check whether the coverage is primary or secondary, however. Primary means you won’t have to involve your own car insurance company in the event of a problem. Secondary means that your own insurance company is on the hook first before the travel insurance coverage kicks in.

Step 5: Check your credit card benefits.

Some level of rental car insurance is a fringe benefit offered by many credit card companies as long as you pay for the rental with your card. If you lost the guide to card benefits that your company sent along with the card, call the company or go online to verify these benefits.

Specific benefits will vary by company and card.  Check with your credit card for more information!


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