Car Rental Insurance – Am I covered?

We’ve all been there – you’re standing at the car rental counter and face with the question of whether or not you should purchase the insurance that the rental provider offers, or lean on you personal insurance. The answer is yes…and no.

We’ve all probably been told by friends, family, magazines, etc, that you should never buy the insurance that a car rental company offers. While in many circumstances this may be true, it is not always the case. For instance, if you are renting a vehicle that is built on a “truck” chassis, meaning that it is title as a “truck” (as many vans and even some crossovers are) are not covered by most credit cards’ collision damage waiver policy and are typically not covered (at least for liability and/or collision) under regular insurance policies. The exception to the rule would be commercial insurance policies which generally are blanket policies and cover up to set amounts for limits of liability or property damage. The short of it is to check with your insurance company AND the company that you are renting from to ensure that you have adequate coverage. If you have already done this and your coverage is not sufficient, it’s time to examine exactly what your options are.

Auto rental companies will usually offer an a la carte selection of collision damage waiver (also referred to as loss damage waiver or sometimes just damage waiver), renter’s liability protection (primary liability – usually state minimums), supplemental liability, as well as various other more specific coverages like glass and tire protection, deductible protection, personal accident coverage (covers persons in the vehicle in the event of accident), and personal effects coverage (covers personal items in the vehicle in the event of vehicle break-in, damages to items from any occurrences that may happen with the vehicle) and a myriad of other coverages specific to each individual company.

Some auto rental companies’ counter agents are paid commission to “push” these coverages whether you need them or not. Know this: Most states stipulate that no auto rental company can force renters to purchase insurance unless the renter is unable to prove the they have sufficient coverage through their own insurance. Ask your insurance representative what coverages you should purchase. The agents’ are simply doing their jobs by offering their companies’ insurances, so it is not fair to make them the “bad guys”. So again, if you are not 100% certain that you have the coverage for the specific vehicle that you are renting, check first!

Lastly, if you are still unsure whether or not to lean on your own car insurance for coverage, take a few minutes to weigh the long-term costs (as well as the hassles with claims) vs. the short term monetary outlay by purchasing insurance through your auto rental provider. For instance: You are renting a car and decide that you do not want to purchase the insurance (we will assume the collision damage waiver insurance is $10 per day and you are renting a week totaling $70) and you want to have your insurance company 100% liable. Let’s say you go out to dinner with your family and you come out and your rental vehicle has been hit by another vehicle. Even though technically not at fault, the responsibility for vehicle damage still lies with the renter. The damage is estimated at $700 to fix. By submitting this claim to your insurance company, it will most likely raise your premium. If your premium increases by only $10 per month, in seven months, you will already be on par with what you would have had to pay directly for the auto rental company’s insurance. In addition, you could have simply walked away and not had to deal with claims, etc. Depending on the cost of the auto rental company’s insurance, you may want to consider it!