Do I Need to Buy Extra Insurance When Renting a Car?

Written by on 12/8/2016 7:00 AM . It has 3 Comments.

rental car insurance


It happens to all of us when we rent a car. We’re signing on the dotted line and the person behind the counter offers extra insurance coverage - and then details all the ways we could be out thousands of dollars if we don’t accept it.

Some of us say no and spend the rest of the trip hoping nothing bad happens. Others take all the coverage offered, sometimes doubling the cost to rent a car. Which is the right answer?

When renting a car, should you opt for the extra coverage by the rental agency or can you rely on your personal auto coverage? The answer is that it depends, but with the right information you can make a better decision the next time you rent a car.

Understand Your Own Coverage

First of all, know that if you’re renting a car for business, your personal auto insurance may not cover you. But if your rental is for a personal trip, you need to understand what your own auto insurance covers and what it doesn’t.

  • Liability: Everyone is legally required to carry some level of this coverage. It pays for the other driver’s medical costs and property damage if you’re at fault in the accident.
  • Collision: This is the coverage that pays for damage if you collide with another vehicle or an object like a tree, light pole, or animal.
  • Comprehensive: You’re protected if your vehicle is damaged by a covered peril: theft, wind, fire, and other natural disasters.

Before you rent a car, make sure you know your own insurance coverage and what your deductibles are. You may also have a secondary insurance offer on rental vehicles through your credit card. If that’s an option for you, contact the credit card company to find out exactly what is covered. Often, it only kicks in after your primary insurance and only for costs above and beyond your insurance limits.

Understand What the Rental Agency is Offering

In order to know if you should take the rental insurance or not, you also need to know what it is they’re offering you - before you start signing on the dotted line.

  • Liability: This covers property damage for the other vehicle if you’re at fault. You likely already have this coverage.
  • Collision/Loss Waver: This isn’t insurance. It’s a waiver to cover the cost of certain types of damage. Make sure you check their exclusions. It might duplicate your collision and comprehensive insurance, but it might also cover “loss of use” on the rental while it’s being repaired - something your insurance doesn’t cover.
  • Personal Effects: Your personal property in the car will be covered if there’s loss or damage. Your homeowners or renters insurance often covers this - but check with your insurance agent before you rent.
  • Personal Accident: This coverage pays the medical costs for you and the other driver if you’re in an accident. Your liability and health insurance will do this for you without buying it from the rental agency.

So should you pay for the rental coverage? If you’re lacking any coverage, like comprehensive or collision, it may make sense to purchase some of the insurance or waivers they provide. But you can save yourself worry and money by understanding exactly what kind of insurance you already have first.

Want to check on your Charlotte auto insurance policy coverage before you rent your next vehicle? Contact us today. We’re happy to help!


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