Do I Need to Get Insurance on an Auto Rental?
In most parts of the United States, it is illegal to operate a car, including one that is rented, without some form of auto insurance. There are several types of insurance coverages available that protects drivers from paying for damages caused to the rental vehicles or third parties' properties. Drivers also have different sources where they can obtain insurance to cover their rental cars, which can save them money.
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Purpose of Auto Insurance
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The main purpose of auto insurance is to protect drivers financially from paying for damages or injuries caused in accidents or other incidents. Every state, except New Hampshire, requires vehicles to be covered by minimum amounts of auto insurance. Rental car companies, however, typically require their vehicles to be covered with insurance.
Coverage Types Available
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When you rent a car, you have several types of auto insurance coverages available that will broaden your protections. There are six main types of coverages: collision, comprehensive, bodily injury, medical payments, liability and property damage. Only liability insurance, which pays for damages caused to vehicles and properties owned by third parties, is required by law on cars in all but one state.
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Purchasing Coverage from Rental Car Companies
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One option you have to cover a rental car is to buy coverage from the rental company. However, these companies do not "sell" insurance; instead, you buy a waiver that works in the same fashion. Some of the common waivers are a loss damage waiver and collision damage waiver. These two waivers work similarly to collision and comprehensive insurance coverages, according to the Insure website. Other types of coverages sold by rental car companies include liability, personal effects (protection for personal items stolen from cars) and accidental death. These coverages are purchased on day-to-day basis and can get expensive. You can end up paying close to $40 per day on coverage, which in some areas can more than double your rental costs.
Other Sources
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You can bypass the rental car company for coverage and use two other options: your credit card company and your own auto insurance. Some credit card companies offer free rental car coverage to select card members. This coverage is in effect if the rental purchase is charged on the card. However, these insurance coverages may be limited. For example, rental coverage may only cover damages to the rental car, leaving you to pay for damage to other vehicles or properties. You can also save money by using your personal auto plan to cover a rental car. Before using this option, make sure you auto coverage is adequate to cover the rental car. If not, you will be responsible for all amounts out of pocket that exceeds your plan's coverage limits.
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References
- Photo Credit Red cars image by Catabu from Fotolia.com
