Is Buying Insurance When You Rent a Car Necessary?
You're standing at the rental car counter, anxious to get started on your vacation or business trip, and the rental representative presents you with a dilemma -- an array of insurance options that, while expensive, could prevent you from paying an even bigger bill if something happens to the rental car. You may not need to pay for all that coverage though, since you might already be paying for rental car insurance through your auto policy or credit card.
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Auto Insurance Coverage
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According to the National Association of Insurance Commissioners (NAIC), many personal auto insurance policies cover rental cars. Before renting a car, call your insurance agent or company and ask about your policy's rental car coverage. Ask about limits on the policy, since some policies only cover rental cars that you have for a certain number of days, and if you have the car for a week or longer, the coverage might be decreased or voided. In that case, purchasing coverage from the rental car company may be a good idea.
Adding Rental Coverage
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If your car insurance does not include rental car coverage, you may be able to add the coverage before your trip for a small premium increase. It is important to call your company or agent well before your trip if you take this route, as there may be a waiting period before the coverage kicks in. In other words, don't call the company the morning of your trip to add the rental coverage, as it can take 24 hours or longer to take effect.
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Credit Card Coverage
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Some credit card companies also offer rental car insurance coverage if you use that card to pay for the rental. In most cases, though, the coverage offered by a credit card company is secondary to the other insurance policies you have. If something happens to the rental vehicle, the credit card company will only pay the damages after the coverage your car insurance company, and any rental insurance you purchased, has been used. If you use a debit card to rent the car, which not all car rental companies will allow, you won't have any coverage through the card issuer.
When to Purchase Coverage
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The NAIC recommends that anyone who does not own a car should purchase the liability and collision coverage on rental cars. It may also be possible to purchase a less expensive non-owner auto insurance policy before your trip. If you are traveling on business, check with your employer before your trip, as rental cars may be covered under the company policy or you may be required to purchase the rental insurance. In most cases, your personal auto policy will not cover damage to rental cars used for business.
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References
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