If you've ever rented a car, you've probably been confronted
by energetic salespeople, warning you of the consequences if you
don't buy their company's rental car insurance. Put on the spot,
you may not be confident in exactly what your insurance covers --
and that's what rental companies are counting on.
You could cough up as much as $50 a day for coverage that you may
or may not need. Want to be prepared next time you're renting?
Here's what car rental insurance you need -- and what you
What does rental car insurance cover?
When you're at the rental car counter, you'll typically be
offered the following four types of coverage:
This policy covers damage to the rental vehicle, as well as
towing costs and related expenses. Rental companies usually
push this coverage the hardest, and it's often the most
expensive, between $10 and 20 per day.
This policy covers damage to any property -- including other
cars -- you may cause while behind the wheel of your rental, as
well as medical expenses for passengers in the other vehicle.
It's usually a little less expensive, between $5 and $15 per
Personal accident insurance.
This policy covers medical costs for you and your passengers if
you're involved in an accident. At most, it costs around $5 per
This covers items you keep in the vehicle, should the vehicle
be stolen or broken into. This is the least expensive coverage
and usually costs less than $5 per day.
If you don't have insurance coverage, or have very little, any
or all of these options may come in handy. However, if you are
covered by some form of auto insurance, health insurance, and/or
homeowner's or renter's insurance, rental car companies probably
duplicate coverage you already have.
Do I need rental car insurance?
Whether you need rental car insurance depends, both on the kind
of coverage you already have, and how much risk you're willing to
assume. You might want to purchase at least some coverage at the
You don't have collision or
If you have an older model car, you may have decided these
policies were no longer worth the expense -- or maybe you never
carried them in the first place. However, considering the
consequences for damage to a rental car, it might be worth
opting for the loss-damage waiver if you're without
You don't own a car.
Almost all states require a minimum level of liability coverage
for all drivers, but if you don't own a car, you may not have a
non-owner insurance policy. You may also want to purchase
additional coverage if you have only the minimum.
You have a very high deductible.
Now that health coverage is mandated, buying additional medical
insurance is most likely not a necessity. But if you have an
extremely high deductible -- on either your health or auto
insurance policy -- rental car companies may have a lower one,
or none at all.
You don't have homeowners or renters
Homeowners or renters policies cover your property, whether
it's in your home or in your car. If you don't have one,
though, you might consider personal effects coverage,
especially if you're traveling with expensive electronics or
You're traveling abroad.
Most policies don't cover you outside the United States (and
sometimes Canada), so if you're in this situation, opt for at
least some coverage.
If you do have any of these policies, you probably don't need
to buy additional coverage -- especially not for the premiums
you'll be charged by a rental company -- but it's always best to
check with your insurance company first. And remember that if
you're traveling for business, you'll have to ask about your
company policy, rather than your personal one.
Are there other types of rental coverage?
You can also buy rental reimbursement coverage as an optional
feature of many insurance plans. Rental reimbursement will
actually pay -- or pay you back -- for a rental car if yours is
in the shop, because of a covered accident.
Geico's car rental insurance partners with Enterprise, so if
you choose it for your rental needs, Geico will pay Enterprise
directly. If you use another provider, Geico will reimburse
you, up to coverage limits.
Rental reimbursement is available for Esurance customers
holding collision or comprehensive policies. In some states,
customers are also eligible for its CarMatch service, which
covers a rental car comparable to the owner's original vehicle,
up to 45 days or $3,000.
's rental reimbursement operates similarly to other major
rental policies. It helps defray the cost of renting a car if
you suffered a covered loss. You won't be covered if your car
is in the shop for routine maintenance or mechanical repairs.
State Farm's rental policy covers rental reimbursement, as well
as some travel expenses. If you're away from home when your car
needs to be repaired, State Farm may reimburse you for lodging,
and other expenses you encounter, while it's in the shop.
Keep in mind that all rental reimbursement plans have limits
and don't cover gas or excess mileage fees, to name a few. If
you're not prepared to pay for extra days or costs, time your
rental so that you can minimize them.
Even if you have the minimum level of auto coverage, you may
still not need to shell out for insurance at the rental counter.
Many credit card companies provide secondary insurance for rental
cars, albeit with a number of conditions. As with your auto
policy, consult a customer service representative at your card
issuer if you're hoping to rely on credit card rental car
In short, if you rent cars regularly, or know you'll need to
rent for an extended period of time, plan ahead so you're not
caught off guard at the rental counter. If you need supplementary
coverage, it might be cheaper to buy it elsewhere.
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