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To Buy or Not to Buy: Rental Car Insurance

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Who needs it?

With summer here and gas prices as low as they are, you may find yourself needing to rent a car while on vacation. A common question people often have is whether or not they should buy insurance offered from the rental car company.

More likely than not, your personal auto insurance policy will cover damage to a rental vehicle. To be covered in a rental car, your personal insurance needs to have the proper collision, comprehensive, and liability coverage. Collision coverage protects you from damage to your vehicle when involved in an accident and comprehensive coverage protects from damage to your car from things like fire, theft, and vandalism. Liability coverage insures you for any damage you cause to another vehicle, person, or property while driving. Uninsured or underinsured coverage, as the name suggests, covers you when the accident is someone else’s fault, but that driver has no insurance or not enough insurance. Before renting a car, it’s a good idea to look through your personal car insurance plan; or call your provider on the phone and ask them about your insurance plan.

It is also possible that your credit card may provide insurance for your rental car. Many credit cards have benefits which can be used when you make a purchase with the card. If you have a credit card, go online or call to see if your card has rental insurance, and if so be sure to pay for the rental car with that card. Make sure to read the fine print though because it is common for card companies to exclude certain vehicles, such as very expensive luxury cars or full-size vans, as well as costs incurred in certain countries that are higher-risk for drivers.

If you don’t have car insurance, or you want the peace of mind of extra coverage, or if you are worried a rental car incident could affect your personal car insurance rates, then you should strongly consider purchasing the rental company insurance.

You may also consider that 15% of all drivers have no insurance at all and many more carry only the minimum. Prudent drivers should be sure to have coverage of their own to make up for what the other driver may not have.  Insurance contracts are usually interpreted based on the law of the state in which they are written so a Virginia UIM policy will still protect a driver in a rental car who has an accident with an uninsured or underinsured driver in another state. Attorney Peter Burnett recommends a minimum $300,000 single limit coverage.

Remember that if you are involved in a rental car accident with injuries be sure to keep good records of the accident scene, people involved, and any medical care received. This information is very important in pursuing a personal injury case should things get more complicated then your rental insurance will cover.