Millions of us take to the roads every year in a rental vehicle. We reluctantly find ourselves paying the extra cost for insurance coverage the rental company provides without really knowing if it's necessary. Whether the reason is peace of mind or pressure from the rental company, in many cases, it's simply a waste of money.
Most likely you're already receiving coverage for the three most common types - collision, comprehensive and third-party liability. Collision insurance covers damage to your vehicle if your vehicle collides with another car or object. Comprehensive insurance covers damage to your vehicle for such impairments as vandalism, hail or flood damage, theft and glass breakage by a rock. Third-party liability pays for injuries to another person as a result of the accident.
Your current auto coverage, your credit card, or your company's policy (if you're traveling on business)are three ways you may already be covered. Purchasing the extra insurance your rental company offers is likely duplicative.
If you carry auto insurance on your personal automobile, the same coverage will transfer over to your rental vehicle. If you use a credit card to pay for the car rental, your card may cover the loss. If you're traveling on business and rent a vehicle, most likely, your company has purchased a policy insuring you and your vehicle.
When You Should Consider the Extra Coverage
Even though your personal auto policy coverage transfers to your rental vehicle, you might carry only sparse coverage because you drive an older vehicle and selected a smaller policy. If this is the case, you potentially should consider purchasing additional coverage at the rental company in case you are missing one of the essential three types.
In other cases, your bank or credit card company that issued the card you use to rent your vehicle may cover you for rental car mishaps. However, it's best to call your credit card company ahead of time to make sure before you rely on the card as a safety net. Many credit card companies have changed their policies in recent years.
You might also desire to buy rental coverage through the rental car company if you want to avoid paying the deductible your own policy requires or avoid a potential increase in premiums if you get into an accident.
Further, if you're traveling out of the country you may need to purchase additional coverage. In Arizona, private insurance policies will cover rental vehicles rented in Canada but not Mexico.
Steps to Take if You're in an Accident
If you're involved in a car accident with your rental vehicle, immediately call your rental company and tell them you've been in an accident; they will tell you how to proceed. Make sure to exchange information with the other driver and file an accident report, if required, with your local police.
Each individual's circumstances differ. Verifying your own state's rules and private insurance policy before making any decisions is important.
