Car Rental Insurance: Yes or No?

If you don’t need to, you likely do not want to purchase insurance offered by a car rental company. Daily rates for collision and theft insurance run anywhere from $10.00 to $35.00 per day depending on the vehicle, and additional liability coverage can cost another $10.00 to $15.00 per day. Therefore, renters should check whether their personal auto insurance policy and a credit card used for the rental provide sufficient coverage.

Most insurers will cover a vehicle you rent, including coverages for collision, theft and liability as long as you already have those coverages on the vehicles you own.  In addition, many credit cards include some collision and theft protection at no cost, usually secondary to personal motor vehicle insurance and will cover expenses not covered by your primary insurance such as deductibles, towing charges and other fees. If you don’t have personal auto insurance, then it may reimburse you for the entire cost of the damage.  All Visa, American Express, Discover and Diner’s Club cards marketed today have the coverage.

In order to take advantage of the coverage you already have you may want to check the following:

  • Before renting, confirm with your insurance agent that your personal auto insurance covers a rental car, and ask specifically about any foreign travel. Keep in mind that any accidents that your primary insurance covers can be used to determine future premiums.
  • Ask or research your credit card companies to determine what coverage each provides. A comprehensive comparative chart of credit card rental car insurance policies can be found at (search: rental car chart). Some credit card companies may not cover administrative or loss-of-use fees that rental companies tack onto their claim.
  • Follow the conditions of your credit card, which may include using the card for the entire transaction, declining the rental company’s collision waiver, and being the primary renter of the car and listing other people you expect to drive the car. If you have an accident, you will also need to follow the procedure for making a claim, which may include providing timely notice of your claim.

The advantage of buying a rental car company’s insurance coverage is that it is primary, therefore, your rates will not go up as a result of any mishap, you will be covered for the entire loss and need only make one claim. However, such insurance is still expensive and can easily double the cost of a car rental. Either way, the next time you’re standing at the rental car counter and the agent is urging you to buy the company’s insurance coverage, you can decide whether to decline or accept is the best option for you if you’ve done your homework.

Contact Attorney Bob Allison if you were injured in a car accident with a rental vehicle.  You may call him at 978-740-9433 or fill out an online contact form.  We will set up a free consultation with you to discuss your case.