Don’t book a rental car before reading this!
Rental Car Insurance:
Do You Really Need It?
When you rent a car, either online or at the rental desk, the rental company asks if you want insurance. Many times it’s not so much offered as demanded, and many people agree without thinking. The truth is, you may already be covered. Knowing what protection you have before you rent can save you a lot of money.
What Rental Car Insurance Really Is
Rental car insurance is extra coverage sold at the counter. You rent a car in Orlando for a week, and the desk agent asks if you want the insurance. Insurance costs $25 a day. Doesn’t sound like that’s too much, but over seven days that becomes $175 total added to your final bill that was probably not in your budget. That’s a nice dinner for a family of four.
Rental companies usually offer:
Collision Damage Waiver (CDW): pays for damage to the rental car.
Liability Coverage: pays for harm to others if you cause an accident.
Personal Accident Insurance: covers medical bills if you get hurt.
Personal Effects Coverage: covers your belongings in the car.
The rental companies often try to make you believe that you have to buy it from them to be covered. However, there are two other places you can look for coverage.
Auto Insurance and Rentals
If you own a car, your auto insurance may extend to rentals. Confirm you have both liability and collision coverage and the coverage limits. Your deductible will still apply, and your policy may not cover every situation. International rentals are likely not to be covered.
Credit Card Rental Car Coverage
Many major credit cards include rental insurance coverage for collisions. This means if the car is damaged, the card’s insurance provider pays for repairs.
There’s a catch with credit card rental coverage though. It’s not enough to have the card in your wallet. The rental car booking must be paid for by that card, and you must decline the rental company’s insurance.
Coverage depends on the card. Some cards exclude luxury cars, large trucks, or certain countries. Some offer primary coverage, meaning the credit card’s provider will pay first. Others offer secondary coverage that only pays after your auto insurance.
Hack: Call the number on the back of your card before your trip. Ask:
Does my card cover rental cars?
Is coverage primary or secondary?
Are there limits on car type or location?
Any other requirements for coverage to apply?
When You Should Buy Rental Car Insurance
There are times when agreeing to buy the insurance is the smart move.
When you don’t own a car. Without auto insurance, you have no safety net if something goes wrong. Buying coverage at the counter is their best option.
You don’t have coverage through your credit card or employer (if on a work trip)
You are traveling overseas. U.S. insurance often does not apply in other countries. If you are driving in Europe or Asia, the coverage you buy at the desk may be the only one that protects you.
And finally, if you are renting luxury cars. Credit cards and insurers sometimes exclude high-end or exotic rental vehicles from coverage. If you are renting something outside the normal range, the rental company insurance makes sense.
In all of these situations, paying for the rental company’s insurance can give you peace of mind and save you from a large bill later.
Bottom Line
Check before you travel. Call your card company and auto insurer.
Bring proof. Carry a copy of your benefits.
Avoid double coverage. Do not pay twice for the same protection.
Compare options. Sometimes travel insurance plans include rental coverage.
Conclusion
Rental car insurance does not have to be confusing. For many people, existing coverage from credit cards or auto insurance is enough. The key is to prepare.
Check your credit card benefits.
Confirm your auto insurance.
Buy only what you need.
With the right plan, you can skip the upsell, save money, and enjoy your trip with peace of mind.