If you will be going on a business trip, road trip or vacation that requires you to rent a car, chances are the car rental agent will ask you if you would like to sign up for rental insurance. If you already carry auto insurance, you probably don't think you need any additional insurance, but before you accept or decline, take the time to properly assess whether your auto insurance covers a rental car.
Check Your Current Policy
Most auto insurers provide coverage to you no matter what car you are driving if you have purchased comprehensive and collision coverage. Most insurance policies spell out what will be covered in the case of an accident. Read the terms of your insurance policy before attempting to rent a car, and call your auto insurance agent for clarification if you have any questions. Some insurance policies only provide coverage for your personal vehicle, and some may not provide coverage if you rent an alternative vehicle such as a moving truck, van or RV.
Rental Car Insurance
If you are currently without auto insurance, or if you want the added protection of insurance offered through the car rental agency, you may sign up for coverage. Most rental agencies offer a loss damage waiver or collision damage waiver that starts at around $20 per day. A loss damage waiver or collision damage waiver shifts liability of damage or vehicle loss to the rental agency. In many cases, an accident or vehicle damage won't even be reported to your insurance company when you purchase a waiver.
Some credit card companies provide rental car insurance to cardholders. The insurance protection may be included free of charge providing you pay for the rental car reservation with the credit card in question. If your credit card company does offer rental insurance, check the policy provisions carefully to determine if coverage is comprehensive. Some policies only provide a limited amount of coverage.
If you are taking a trip with a rental car, do not allow anyone you don't know to drive the car. Even if you are traveling with a family member, spouse or close business colleague, it may not be a good idea to let them do the driving. You can legally add another driver to the rental car contract, but your insurance company may not cover someone besides you. Contact your insurance company to add another driver to the policy, or ask if your insurance coverage will automatically extend to another driver in a rental car situation.
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