When you a renting a car, you are probably standing in line with several impatient people behind you, waiting for you to get your keys and get out of the way. This is a very bad time to decide what type of insurance coverage you need! Most people will do one of two things: buy everything available or buy nothing at all. Unfortunately, the former choice means you may be duplicating coverage while the latter means you may not be covered in the event of an accident or theft.
How do you know what type of insurance you need? Here is a basic primer on buying rental car insurance. If you already know what you want when you get to the counter, you will find that you make better decisions about your coverage.
If You Have No Insurance . . .
If you do not own a vehicle, you do not have existing car insurance. However, the credit card you use to rent the car may cover you for damages. Before you rent, contact your credit card company to confirm the amount and type of coverage they offer when you rent a car.
If your credit card offers limited or no coverage, it is important to purchase the policy offered by the rental car company. It is not a wise financial decision to duplicate insurance coverage, but it is far preferable to being involved in a crash with no coverage at all.
One other word of caution is important: check your credit card coverage every time you rent. Credit card companies change their policies frequently, and most people simply do not read all the fine print. Ask before renting just to be sure you are covered.
If You Have Insurance . . .
If you already have a vehicle and it is covered with insurance, it is likely that you already have coverage for your rental car as well. However, you must be sure that your coverage is complete, and that requires a call to your insurance company before you rent.
One thing to keep in mind is that an insurance company may cover you for only the level of coverage you carry on your current vehicle. This means if you have declined collision coverage, you may not have collision coverage on the rental vehicle even if you have liability coverage.
In a few cases, your car insurance may not cover a rental vehicle. Be sure to check with your insurance company to clarify the type and level of coverage you have when you rent a car.
Some Other Things To Remember . . .
Car rental agreements offers several types of coverage. Here is a breakdown of each type and what it means:
- Collision damage waiver. This may be called optional vehicle protection or a loss damage waiver. It is not actually insurance; instead, it is an agreement on the part of the rental company to assume liability for collision damage. These products are often voided if the car is used in an illegal act or even driven on unpaved roads, so be sure to read the contract carefully.
- Liability insurance. Liability can provide protection for up to $1 million but can also be purchased in smaller amounts. You may already have liability coverage under your own insurance policy.
- Personal accident insurance. This coverage pays for medical costs for driver and passenger, but if you have health insurance or PIP on your auto policy you are probably already covered. Be sure to check both policies to be sure before you buy.
- Personal effects coverage. If the rental car is broken into and your laptop, golf clubs, jewelry or other valuable items are stolen, this coverage pays for them. This is a feature not offered on every car insurance policy, but you may be covered under your homeowners if you have what is known as a “floating” policy for your personal effects.
If you rent a car frequently but do not have one of your own, you may want to look into a non-owner policy for liability, as well.
Whatever you decide to do, the important thing is to be sure you have coverage if you are in an accident with a rental car. If you are injured in a car crash, whether in a rental car or a personal vehicle, be sure to talk to a personal injury attorney about your case.