Many of us know the uneasy feeling when getting off a flight and going to the rental car counter where the representative asks, “Do you want to add the insurance?”
Several thoughts may go through your head, including, “Am I covered by my own auto insurance?” Or, “Does the credit card I’m using protect me?” Then, just to be safe, you end up getting the “extra” coverage.
You are probably already covered
Depending upon the company and coverages you select, rental car insurance can add an extra $30 to $60 a day to your rental car bill. Before you leave, take an inventory of your current policies, which may already provide accident and medical protection, such as:
- Personal auto insurance: Most auto insurance policies cover rental cars. However, you get the same coverage, meaning if you don’t have collision coverage, you don’t get it for the rental.
- Personal health insurance: Most health care plans cover any medical care you need within the U.S. Check the policy’s terms for travel outside the U.S.
You’ll still have to pay deductibles and copays under these plans. Other types of insurance may also add protection, such as homeowner’s, renter’s, travel or non-owner car insurance.
What about credit cards?
Paying for a rental car with a credit card generally protects against theft and damage to the car. But there are limits:
- Collision protection is secondary to other forms of insurance, meaning it only kicks in after other coverages are maxed out.
- Coverage only applies to short-term rentals with a limit as short as 15 days.
- While coverage is offered for travel outside the U.S., some countries are excluded.
- Some larger vehicles, such as trucks and vans, are often not covered.
- Some, but not all, credit cards will cover “loss of use” fees – which is compensation rental companies expect from you for fees they could have charged while the vehicle is being repaired.
When should I get rental car insurance?
With all the protections other insurance products provide, here are some situations when it may make sense:
- You have no insurance
- You pay with a debit card or cash
- You want to avoid your auto policy’s high deductible
- You aren’t already covered for extra costs, such as towing or “loss of use” fees
- You are traveling internationally
- You’re traveling for business, and your personal coverage may not apply
- You need a long-term rental and are depending upon your credit card to supply collision coverage
Check before you travel
Before you reserve a vehicle, check your policies or call your insurance agent(s) to make sure your personal policies protect you when renting a car. If you don’t want to scour the fine print for your credit card or health insurance terms, call customer service and ask what is and isn’t covered.